An actuarial standard of practice defines how actuarial work should be performed so that it is reliable, transparent and comparable: which assumptions to use, how to document, what to disclose and how to communicate results. In Mexico they are issued mainly by CONAC (Colegio Nacional de Actuarios), within the regulatory framework of the CNSF (National Insurance and Surety Commission); internationally, the IAA issues the ISAP standards. We present them separately here.
🇲🇽 National
Actuarial standards in Mexico
In Mexico, actuarial practice is governed by three complementary sources: CONAC's Standards of Actuarial Practice (EPA), the CNSF regulatory framework (the CUSF, Single Insurance and Surety Circular, and the LISF, Insurance and Surety Institutions Law), and the AMAC technical guides for employee benefit liabilities. Together they define the "sound actuarial practice" that every signed piece of work must follow.
CONAC Standards of Actuarial Practice
The Colegio Nacional de Actuarios issues the EPA, which the CNSF recognizes as part of sound professional practice. The main standards cover the valuation and adequacy of reserves in insurance and surety:
Gross Premium, Short-Term Insurance
Methodology for testing the adequacy of the gross premium in short-term insurance.
Unearned Premium Reserve, Short-Term Insurance
Setting up and valuing the unearned premium reserve (RRC) in short-term insurance.
Gross Premium, Long-Term Insurance
Adequacy of the gross premium in long-term insurance (life and similar).
Unearned Premium Reserve, Long-Term Insurance
Setting up and valuing the RRC in long-term insurance.
Gross Premium, Surety Bonds
Adequacy of the gross premium in the surety line.
Technical Reserves, Surety Bonds
Setting up and valuing technical reserves for surety bonds.
Audit of Technical Reserves
Criteria for reviewing and issuing an opinion on the condition and adequacy of technical reserves.
Regulatory framework: CNSF, CUSF and LISF
Through the CUSF and the LISF, the National Insurance and Surety Commission requires that technical reserves be set up and valued with actuarial methods in line with these standards, that technical notes include assumptions, methodology, rationale and an adequacy test, and that an independent actuary issue an opinion on their condition and adequacy. See also our Certification (CNSF and CONSAR) page.
Standards of Practice (documents) ↗ CONAC regulations ↗Employee benefit liabilities: AMAC and NIF D-3
For the valuation of employee benefit liabilities (seniority premium, pensions, employee benefits) under NIF D-3 and IAS 19, AMAC (Asociación Mexicana de Actuarios Consultores) publishes technical guides that standardize assumptions and methodology (projected unit credit). See CONSAR registration.
AMAC ↗🌐 International
International ISAP standards (IAA)
The International Standards of Actuarial Practice (ISAP) are issued by the International Actuarial Association (IAA). They are model standards: the IAA does not impose them, but encourages its member associations, CONAC among them, to adopt local standards that are substantially consistent with them. Their aim is to harmonize the profession worldwide.
General Actuarial Practice
The base standard: it applies to all actuarial work (process, assumptions, documentation, communication and quality). Since 2018 it includes model governance.
Model Governance
Issued in 2016 and later folded into ISAP 1 in its 2018 revision.
Financial Analysis of Social Security Programs
Valuation and projection of social security systems and public pensions.
Employee Benefits (IAS 19)
Actuarial valuation of employee benefits and employee benefit liabilities under IAS 19 (the international counterpart of NIF D-3).
Insurance Contracts (IFRS 17)
Actuarial work related to the measurement of insurance contracts under IFRS 17.
Valuation of Pension Liabilities
Actuarial valuation and review of pension plan obligations.
Enterprise Risk Management (ERM)
Standard for actuarial work on enterprise risk management programs.
Insurance Supervision
Actuarial work in the context of prudential supervision of the insurance sector.
Climate-related Disclosures (IFRS S2)
The most recent standard: actuarial work related to climate risk disclosure under IFRS S2.
How they relate to Mexico
Because CONAC is a full member of the IAA, Mexican standards aim to be consistent with the ISAPs. In practice, reports citing compliance with ISAP 1, 2 and 3 are very common in valuations of employee benefit and pension liabilities in Mexico. The list and current versions of the ISAPs are published on the IAA's official website.
Official ISAPs (IAA) ↗ The Actuarial Profession Around the WorldRelated: CNSF/CONSAR Certification · CONAC · The Actuarial Profession Around the World · Publications