Objective and key requirements of this Prudential Standard

This Prudential Standard aims to ensure that the Board and senior management of a general insurer are provided with impartial advice in relation to its operations, financial condition and insurance liabilities. This advice is designed to assist the Board and senior management in carrying out their responsibility for the sound and prudent management of the general insurer.

Accordingly, this Prudential Standard outlines the roles and responsibilities of a general insurer’s Approved Auditor and, where the general insurer is required to have one, its Approved Actuary; it also outlines the obligations of a general insurer to make arrangements to enable its Approved Auditor and Approved Actuary to fulfil their responsibilities. In addition, the Prudential Standard establishes a set of principles and practices for the consistent measurement and reporting of insurance liabilities for all general insurers.

The key requirements of the Insurance Act 1973 and this Prudential Standard in relation to audit and actuarial reporting and valuation are:

• an insurer must make arrangements to enable its Approved Auditor and Approved Actuary to undertake their roles and responsibilities;
• an insurer will be exempt from the requirement to have an Approved Actuary in certain circumstances;
• the Approved Auditor must audit the yearly statutory accounts of the general insurer and must review other aspects of the general insurer’s operations on an annual basis. The Approved Auditor must prepare a certificate and a report on these matters and provide them to the Board of the general insurer. An Approved Auditor may also be required to undertake other functions, such as a special purpose review;