From: "Tim" 
Newsgroups: uk.finance
Subject: Re: Equitable wins right to sue directors
Date: Fri, 24 Oct 2003 13:20:22 +0000 (UTC)

> >"Stephen Burke" wrote
> >>   the guaranteed
> >> annuity rates ... didn't get plugged in to the
> >> actuarial calculations until it was too late. That kind of thing isn't
> >> anyone's fault in particular
>
> Tim wrote:
> > I'd say rather the opposite - they *all* should have "noticed it",
> > hence *all* should be "culpable".
>
"Stephen Burke" wrote
> It would be a very hard case to make. To prove negligence you have to show
> that people failed to do something they could reasonably have been
expected to
> do.

OK, let's see.  Firstly, an Appointed Actuary needs to apply Guidance Note
1, and even needs to certify that GN1 has been complied with (see section
4.1 below) whenever an "annual valuation" is performed & reported on.

Secondly, GN1 states (section 4.2) that "The Appointed Actuary must have
regard to all aspects likely to affect the financial position", and goes on
to list a number of points which should be considered, including
"GUARANTEES"!!

So, I would say that allowing for the guarantees within the valuation *is*
"something they could reasonably have been expected to do."


"Stephen Burke" wrote
>  If essentially everyone in that position has failed to do it the starting
> point is going to be that it wasn't reasonable to expect it.

I do not agree - every Appointed Actuary *should* be complying with GN1, so
it is inherently "reasonable" to expect this.  The mere fact that other
actuaries have not, cannot be an excuse!


http://www.actuaries.org.uk/files/pdf/map/GN01V5-1.pdf