The enjoyment of bringing “what can be a dry set of rules and regulations to life for people” has been a feature of Melanie McLaren’s career, who believes all her roles to date led to her current position as executive director of codes and standards at the Financial Reporting Council.
As a chartered accountant by profession – having come to the then-Coopers & Lybrand (eventually PricewaterhouseCoopers), with a degree in Arabic Studies and German – Ms McLaren cut her teeth in audit as an insurance partner at PwC before going on to be chief risk officer at Friends Life. She said she had seen a lot of insurance-related risk.
She added: “Some people say I am poacher-turned-gamekeeper, but all of the roles have been leading to this one, and have all involved doing the right thing.”
As part of her current role, Ms McLaren has overall responsibility for the FRC’s actuarial team, and is working closely with a range of organisations as part of the Joint Forum for Actuarial Regulation (JFAR) in a project that can best be described as a risk assessment of the risk calculators.
The FRC’s mission in relation to actuarial policy is to promote high-quality actuarial practice and the integrity, competence and transparency of the actuarial profession, which will benefit everyone who relies on actuarial advice. To this end, JFAR – which consists of the Institute and Faculty of Actuaries, the Financial Conduct Authority, the Prudential Regulation Authority and the Pensions Regulator – has published its Risk Perspective Document which is designed to stimulate discussion about how actuarial decisions affect all sectors of society.
IFAs are being encouraged to get involved in the discussion and to outline where they feel actuarial decision-making is working well, and where it could be improved.
Ms McLaren said: “Like many professions, when you look at the respect and trust in business and professionals, [financial services] has taken a bit of a hit in the financial crisis, and in the UK context the actuarial profession took a hit before that because of the Equitable Life scenario. There have been a lot of shocks to the system.
“But after Equitable Life in the UK, there were several reviews, and the main review looked at the role of the actuarial profession. People want insight, transparency, and they want to know what judgments have been made.
“What the FRC tries to do in all of the markets is build justifiable confidence, whether they are accountants, auditors, actuaries or company directors.”
The Equitable Life scandal put the often hidden actuarial profession centre stage, and it was after the publication of the Morris Review of the Actuarial Profession in 2005 that the FRC took on responsibility for the independent oversight of actuaries and the setting of technical actuarial standards.
Ms McLaren said: “If you are a member of the IFoA, even if you are not qualified, you are bound by those standards. You still have to follow and practice those ethical standards. One of the things we have been trying to look at is that you do sometimes find actuaries carrying out work that may not seem very actuarial, and you do find non-actuaries carrying out work you would find actuaries doing.