PROFESSIONAL LIABILITY INSURANCE FOR CIA MEMBERS

1
PROFESSIONAL LIABILITY INSURANCE FOR CIA MEMBERS

• ANNUAL GENERAL MEETING
• Ottawa - June 29, 2006
• Presented by
• H. Wayne Woods

2
CIAs 1st GUIDING PRINCIPLE

• In carrying on its activities and programs,
  the Institute holds the duty of the profession to
  the public above the needs of the profession and
  its members.
• Does the Institute have a duty to make sure its
  Members have adequate Professional Liability
  Insurance?

3
BACKGROUND

• Most actuaries are covered by their Employer
  (Large insurance, consulting firms and
  government)
• Individual practitioners and small actuarial
  firms
• have difficulties obtaining insurance
• high premiums
• Limits are not adequate (i.e. 1 million)
• Pension and actuarial evidence practices most
  affected
• Emerging practice areas have no coverage - future

4
PROFESSIONAL LIABILITY INSURANCE

• Negligent acts
• Errors or omissions
• Defense legal costs
• Not! - Directors and Officers
• Insurance

5
PROFESSIONAL LIABILITY INSURANCE

• Covers actions in the Policy year only
• Needed when actuary leaves an employer
• Needed after actuary retires
• No universal coverage like in other professions
  (e.g. lawyers and accountants)

6
Task Force

• MSC formed Task Force to asses the need for a
  Professional Liability Program
• Initial TF recommended that the Institute
  commission a broker to provide insurance on a
  mandatory/voluntary bases
• MSC set up a second TF to send out an RFP and
  recommend a Broker Morris Mackenzie choosen
• MSC later set up the Professional Liability
  Insurance Advisory Committee (PLIAC) to work with
  Morris Mackenzie to implement the program
  -Voluntary
• Members include
• Joe Nunes (chairperson)
• Andre Racine
• Daniel Lapointe, Executive Director
• Wayne Woods

7
Process in Choosing a Broker

• Identify potential brokers 6 chosen
• Criteria
• Nation wide presence
• Bilingual
• Coverage of insurance company markets
• Short list of 3 chosen
• Interviews in Ottawa on February 07, 2006
• Clarification on some points with subsequent
  submissions
• Report submitted to MSC and appointment of Morris
  Mackenzie on March 21, 2006
• Meeting in Montreal with Morris Mackenzie on
  April 26, 2006 to work on Action Plan

8
OTHER ISSUES

• Should the Institute have mandatory or voluntary
  program? Voluntary to start.
• Coverage after retirement what happens?
• Responsibility to our Publics Should actuaries
  have Professional Liability Insurance?

9
PROCESS

• Information on CIA
• Standards
• Disciplinary process (CPC)
• Make up of membership (large/small firms)
• Practice areas
• Telephone survey of membership larger actuarial
  firms in progress
• Identifying Insurance Company(s)
• Solicitation
• Effective Date January 01, 2007?

10
NEXT STEPS

• Presentation to members at June meeting
• Feedback from Members and Firms
• Discussion with insurers during July August
• Preliminary plan design in September
• Approval of Program in Fall 2006
• Roll-out to Members in Q4 2006