Mr. Tony CHENG Experience
Mr. Nigel KE Asia Regional Support
Mr. Sim NG Membership & Publications,
Secretary & Treasurer
Mr. Jack MAK Retirement Schemes
Ms. Ka-Man WONG Investment & Risk Management
PRESIDENT’S REPORT 2009 Members, it is my pleasure to present this President’s report nearing the end of another busy year for the Actuarial Society of Hong Kong (ASHK) and an extremely challenging year for Hong Kong and the global community.
The Year in Review 2009 has been an extraordinary year for the world. The global economic and financial crisis has posed serious challenges for nations, conglomerates and businesses and reshaped the financial landscape as we knew it. There were times when bankruptcies, layoffs and corporate losses made daily headlines. It has never been a more important and opportune time for the actuarial profession to rise up to the challenge and respond with resilience and proactive leadership in helping the Hong Kong insurance and financial services industry navigate through the economic storms and uncertainties.
One notable achievement is the outcome for determining the reinvestment yield valuation assumption. ASHK has been developing guidance for life insurance appointed actuaries practicing in Hong Kong. Against the background of unprecedented volatility in global financial markets and a very low interest rate environment, ASHK initiated a dialogue with the Hong Kong Insurance Authority on the interpretation of section 8 of the Insurance Companies (Determination of Long Term Liabilities) Regulation and developed an approach for determining the reinvestment yield reserving assumption after extensive consultation with relevant stakeholders. The approach is counter-cyclical in that it moderates extreme highs and lows in interest rate cycles. ASHK is proud of our members who worked together producing such a pragmatic solution contributing towards the stability of the Hong Kong financial system.
Although the worst part of the crisis seems to have gone away, as actuaries, we should remind ourselves to remain cautious and vigilant in discharging our professional duties and in managing the challenges posed by an uncertain economic environment. The recent debt standstill announced by Dubai World and related developments serve as a reminder that the global financial crisis is not over.
It’s my pleasure to share with you aspects of ASHK’s activities and the Council’s work in 2009. With your support, the Council has been able to formulate a number of strategies to lead ASHK over the next few years. We have focused our energy on a range of initiatives - carrying on with the statutory body project, working with regulators and the industry in reviewing various AGNs, initiating courses to develop the soft skills of actuaries and delivering a full slate of CPD events in different practice areas to help members meet their CPD requirements. In addition, ASHK, with the help of our senior members like Mr. Peter Luk and Mr. Dominic Lee who could recall our history, contributed some materials towards the publication of an interesting book – Insurance History of Hong Kong 1841-2008 by Nyaw and Feng.
We have made significant progress in our journey to gain statutory recognition. Work on revising the existing Memorandum & Articles of Association and on improving the current disciplinary scheme is underway. An update on key proposed changes was presented at the Appointed Actuaries Symposium in November. Members will be consulted on the proposed draft amendments to the M&A when the review by the Committee and Council is completed. This vital initiative concerns the strategic future of ASHK. I urge members to actively provide your feedback when we seek your views on the amendments. The on-going project led by Mr. Peter Luk is expected to last for another year or two.
Mr. Peter Duran who leads the Professional Matters Committee, has worked hand in hand with Mr. Peter Luk to prepare ASHK for the level of professionalism expected from a statutory body. The Committee is busy reviewing the admission requirements and proposing revisions, developing an expedited due process with sunset provisions for emergency situations and working on a proposal for CPD requirements. A presentation on the expedited due process and proposed CPD requirements was delivered at the Appointed Actuaries Symposium and comments from attendees were collected via survey questionnaire forms.
You have seen the establishment of working groups for AGN3, AGN5, AGN7, and AGN8 under the Life Insurance Committee which proactively engaged in open dialogues with regulators and the industry in developing guidance to our members. The recent Appointed Actuaries Symposium organized by the Committee dealt not only with the technical issues of the day, but also the communications and influencing skills of actuaries. Judging by the turnout and feedback, the Symposium was a great success.
Through the China Committee, ASHK has kept close communications with the China Association of Actuaries (CAA) and participated in several meetings of the CAA including the Risk and Solvency Management Seminar in Beijing and the CAA Annual Meeting in Kunming. ASHK continued its efforts in supporting the CAA’s preparation to join the International Actuarial Association and become a member of the global actuarial community.
ASHK together with the Society of Actuaries, the Casualty Actuarial Society, the Faculty and Institute of Actuaries, and the Institute of Actuaries of Australia participated in the Education and Career Expo to promote actuarial education and profession to the public. A note of thanks goes to the many volunteers and students who devoted their time and energy in supporting the event. The Chinese actuarial exam centre in Hong Kong was maintained with the Education Committee’s support. The Committee also kept up with its inter-profession relationships by organizing a joint evening talk with the Academy of Law.
A significant amount of work has gone into continuing the industry experience study for mortality and critical illness benefits initiated in 2008. We are grateful to the 23 contributing companies for their support in providing data for the study. The Experience Committee validated and analyzed the data using SOA’s upgraded experience study tool. A report for the participating companies is in the pipeline with the industry report expected to be drafted in the next year.
The General Insurance Committee held a Motor Insurance Pricing Seminar jointly with HKFI drawing a great turnout. The Committee conducted interviews on the impact of the financial crisis with several companies. It plans to present the findings in an article in the I-Lens magazine next year. The Healthcare Working Party met with the Food and Health Bureau earlier in the year on healthcare reform and financing issues.
The Investment and Risk Management Committee conducted a survey on the risk management practices of companies in June. 30 responses were received. The results were analyzed and presented at an evening talk well attended by members. Following the success of the first ASHK Risk Management Regional Conference held in 2008, ASHK with the support of the Society of Actuaries is organizing another risk conference to address the theme of “Post Financial Crisis: A New World?” at the exciting City of Dreams, Macau, in January 2010. I have been very encouraged by the overwhelming and generous corporate and member support for the event to-date. Only a limited number of seats are left. Please register now if you do not want to miss the opportunity to chalk up your CPD points early next year.
The Membership and Publications Committee produced 2 newsletters earlier in the year on the global financial crisis and an ‘out-of the-box’ theme on Ability to Influence. The third newsletter is in the works concerning the theme of Hong Kong’s role and contributions as an international financial services centre in China and Asia. Studies have shown that in technical lines of work, 15% of one’s financial success in life is due to one’s technical knowledge and 85% to human engineering. Hence the Committee, with the help of BPP in association with the Learning Institute, has planned a series of soft skills training courses for members to sharpen their powers of persuasion and communication to enable actuaries to become more effective in their work.
The Retirement Schemes Committee had several meetings to discuss Hong Kong’s old age financial security system and, for the purpose of determining the need for developing a guidance note on setting assumptions, collected information about the different practices of setting discount rate and asset return assumptions under HKAS 19.
With the government considering issuing new government bonds and the changing economic environment, the Interest Rate Committee was reactivated recently to investigate how the program to calculate the Hong Kong Dollar Yield Curve should be modified and to raise the awareness of the model.
ASHK has adopted the suggestions of the Climate Change Working Party to become more environmentally friendly and refrained from printing handouts for the Joint Regional Seminar and Risk Management Conference. Registration brochures of the Risk Management Conference are produced from recycled paper.
Throughout 2009, there have been many opportunities for members to network and meet CPD requirements locally and regionally - luncheon meetings, evening talks, cocktail reception, EAAC, Annual Dinner, Joint Regional Seminar in Asia, soft skills courses, etc. ASHK was represented at the IAA Meetings in Tallinn and Hyderabad. All these could not be achieved without the tireless support and dedication of Council and volunteers who devoted their time, resources, and ideas to ASHK.
ASHK is in good fiscal standing. We contributed US$2,500 to the IAA Fund in aid of the development of the global actuarial profession. A further HK$450,000 has been earmarked as the remaining legal fees pertaining to the statutory body project. For your information, the schedule of completed and expected future payments is as follows:
1st Payment: HK$50,000 was paid upon signing the contract with the legal firm last year;
2nd Payment: HK$170,000 expected to be paid upon the initial presentation of the Bill to Legco;
3rd Payment: HK$170,000 expected to be paid upon the conclusion of the Bill Committee stage; and
Final Payment: HK$110,000 expected to be paid within one month of passing of the Bill at Legco.
Our membership growth has been steady. We now have over 750 members, of whom more than 400 are Fellow members.
The detailed membership figures are shown as follows:
Others (including Government and investment firms) 60
765 Conclusion When I assumed the Presidential role at the beginning of the year, I encouraged members especially Fellow members of the Society to step forward and contribute towards our profession, by participating in various ASHK activities like meetings, seminars, surveys, social events, by volunteering our service to various committees and working groups, by working with ASHK in different ways playing an active role in our areas of expertise, and even by running for Council positions. I am heartened that many of us have responded to the call for volunteers and have chosen to give back to the profession in a very meaningful way. Like myself, I am sure you have been rewarded by the enriching experience gained through such service to the Society and by the satisfaction from the fact that we do make a difference.
I want to thank our members, our volunteers, our honorary legal advisor and honorary auditor, the Council and staff members of ASHK for the support and guidance I have received in my role as President.
The Council this year consists of:
Investment & Risk Management Committee Ms. Ka-Man Wong
Life Insurance Committee Mr. Trevor Kreel &
Mr. Simon Walpole
Membership & Publications Committee Ms. Sim Ng
Professional Matters Committee Mr. Peter Duran
Retirement Schemes Committee Mr. Billy Wong
Secretary & Treasurer Ms. Sim Ng
Vice President Mr. Simon Walpole
I would also like to especially thank Mr. Tony Cheng, Immediate Past President and Mr. Simon Walpole, Vice President for their wisdom and advice on a number of important issues during the year. I am sure ASHK will progress well under the leadership of Mr. Walpole, our President for 2010. I would like to close by thanking you again for the opportunity to serve you as President in 2009. May you have a blessed holiday seasons. I look forward to seeing you in our Macau conference.
THE COMPANIES ORDINANCE (Chapter 32) Company Limited by Guarantee
and not having a share capital
MEMORANDUM OF ASSOCIATION OF THE ACTUARIAL SOCIETY OF HONG KONG 香港精算學會
1. The name of the company is "THE ACTUARIAL SOCIETY OF HONG KONG" (hereinafter called "the Society").
2. The registered office of the Society will situate in Hong Kong.
3. The objects for which the Society is established are :
(a) To increase the value to the community of the actuarial profession.
(b) To encourage and assist the study of actuarial science statistics and any other subjects of interest to members of the actuarial profession.
(c) To promote the general efficiency of, to uphold standards of professional conduct among members.
(d) To regulate the practice by its members of the profession of actuary by issuing from time to time as when necessary Professional Standards, Guidance Notes and/or and other forms of guidelines or directions.
(e) To discuss and comment on the actuarial aspects of public, social and economic and financial questions which from time to time may be the subject of public interest.
To support, participate in, or sponsor activities of other bodies having objectives in whole or in part similar to these objectives and any other activity which promotes or enhances the image of the Society.
(g) To consider the actuarial aspects of legislation existing and proposed and to take such action as is considered desirable.
(h) To arrange for the compilation and publication of statistical data and of actuarial tables based thereon.
(i) For the purposes of carrying out or advancing the objects of the Society to accept subscriptions, donations and endowments and promoting social and cultural functions and other forms of entertainment.
(j) To support and subscribe to any charity or relief or public fund in Hong Kong or elsewhere and to make donations to such persons or institutions and in such cases as the Society shall think fit.
(k) To purchase, take on lease, to hire or otherwise acquire any real or personal property or any rights or interests therein which the Society may think necessary or convenient for effectuating any of its objects and to work, use, maintain, improve and to sell, let, surrender, mortgage, charge, dispose of or otherwise deal with the same or any other property of the Society for the purposes of the Society.
(l) To account for and receive subscriptions and other contributions towards the cost of the activities of the Society and generally to raise money for the purposes of the Society.
(m) To borrow any money required for the purposes of the Society upon such terms and on such securities as may be determined.
(n) Generally to do all such other lawful things as are incidental or conducive to the attainment of the above objects or any of them.