Corporate governance - regulation and reform: the actuarial governance of UK life insurers

The paper investigates the Financial Services Authority's (FSA) reforms of the unique corporate governance arrangements of UK life insurers. In particular, the paper explores the need for special arrangements for the governance of with-profits funds, the role of actuaries in corporate governance and the proposals for reform which resulted from the FSA's With Profits Review and Lord Penrose's Report into the problems experienced at the Equitable Life Assurance Company. The paper concludes that post-Cadbury trends in corporate governance, in combination with the FSA's reforms, have placed boards at the centre stage of actuarial governance with directors no longer able to abrogate responsibility for actuarial decisions. There is also much to be learnt from studying changes to the actuarial and corporate governance of life insurers as it reveals the complex nature of corporate reality, and demonstrates the inadequacy of theoretical approaches that dichotomise corporate governance between Anglo-Saxon shareholder and continental European stakeholder models.