The session on the future of the Actuarial Function Holder (AFH) under Solvency II was a reminder we still have some work to do in mapping from existing roles to the new titles under Solvency II.
General opinion is that the AFH role will still be required under Solvency II. But issues remain around what the AFH will do in the new environment and where does the AFH sit under Solvency II. Is it the first, second or third line of defence? It was the view of the speaker that the AFH sits somewhere between the first and second lines of defence (no puns about actuaries on the fence please!)
There are also subtle differences between ‘function’ and the ‘people’ actually fulfilling them. Some parts of the role could be in different lines of defence. For example, actuarial function could calculate the solvency capital requirement, this doesn’t need to be the risk management function.
But questions remain as to whether the AFH can continue to do current work – e.g. setting reinsurance strategy or investment strategy – or does the new head of the actuarial function under Solvency II need to be capable of being independent.
There is a possible (probable?) overlap with the Risk Management function so there needs to be an awareness of any overlaps with the need for documentation of any overlaps, possible conflicts of interest, and how these are dealt with. There is a danger that things fall between the cracks.