Enterprise Risk Management (ERM) Subgroup
Framework Call (CRO)
October 8, 2003
2 :00 p.m. Central Time
(Leader), Randy Edwards, Dave Ingram, Barry Franklin, Toni Maloney, Claus
Sudha Shenoy, John Stark, Ted Steven, Randy Tillis, Julie Young (SOA)
- We should take the higher road. We should not get caught up in the minutiae.
- Preemption issue: we can’t
be intimidated, but on the other hand there is a middle ground somewhere.
- If actuary appeared once that was about it in the PWC paper.
- There are many actuaries who are functioning as CRO’s in their companies.
- In the PWC paper we should deal not only with the insurance company
issue but that industrial
firms have a significant risk. Procedurally, we can’t be all things to all
people in terms of managing risk so we have to choose our battles.
- The actuary’s role is not necessarily to be the champion.
We are the people who are responsible
for quantifying the risks.
- Are you saying that the PWC paper doesn’t focus on this at all?
- We have to address both form and substance.
- We should focus on the substance. How do we most efficiently do that? Separate between insurance companies and non-insurance
companies. The actuarial/underwriting
would be a good place to start. Balance sheet, risk adjusted return on capital,
that should be in place.
- John Stark, Jim Reiskytl and Valentina Isakina just drafted a seven-page
letter to send to COSO. The
president of the academy will sign the letter. It will be sent out to the presidents of the
different organizations for their feedback.
Our response is trying to take the higher ground. As
soon as the presidents have signed off and the SOA and Academy look
at it one more time the response will be sent out.
The deadline is October 15.
- This group’s purpose is to advocate for actuaries to be considered
first and foremost for CRO.
- We have an opportunity to move faster, to have a more focused message.
We feel that the best person to quantify is an actuary.
We want more CRO’s and we want more CRO’s to have to be actuaries. It’s the perfect environment to be calling
for that because there is still a lot of dirty
laundry that companies can’t seem to shake out.
- What happened to ethics? What happened to playing by the rules of your own company?
- The Academy is dealing with COSO. John Stark is on that and will be the effective
now we can move on with our primary purpose.
- Where do we start? We were
hamstrung a little bit by the strategic plans of the SOA that this
group be involved by the dialog. We’ve
done a lot of the work. Maybe
we can put together
one page of “here is what we want to do” and get people to sign off
- If we submit a paper it should be submitted in early December.
It could be a “mini” paper but
it would entail a strong public relations campaign to be behind it. There would have to be spokespeople from the
CRO team, we’d have to do some media training, and then we would
have to have some PR people from the SOA.
- We’d have to have a final draft of the paper by a month from now.
You have to get the ear of someone at the top.
If they say yes, then bring in the PR people of the Society.
Then come up
with the substance and get on Larry King. Whoever writes the paper and goes on Larry
needs to have checklists that show measurement.
ACTION ITEM: Julie will get in touch with Valentina regarding
a call with Ted, Randy, Claus, Toni, John, Juan and Valentina.
Valentina, What do we need to do to get the authority to proceed here?
We want to get the CRO message to the public via Larry King. The message
is: We want more CRO’s and we want more CRO’s to have to
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