I couldn't have put it any better than this brilliant article on the spectacularly blurred lines between actuarial and risk functions under Solvency II.
The letter referenced sounds like it was directly inspired by an FSA closed-door presentation (which I cannot find a copy of) on the subject of the risk function's future. The theme of that presentation must have been very certain in order to have generated such a swift and piqued response.
Being of a non-mathematical persuasion I would not say that I felt uncomfortable by the Level 2 & 3 covert (and in some places, overt) direction that the best person to run a risk function/be the CRO under Solvency II would be an actuary who knows a bit about risk - indeed, with the advent of the CERA, I suspect there ought to be a conveyor belt of suitably qualified people.
However, it would be incredibly disconcerting to find at UK national regulator level that a professional who followed the strategy/soft skills path to risk management may not be considered able to gain enough understanding of actuarial concept in order to discharge their obligations with regard to ORSA, Model Design and Validation etc in the same way that a pure Capital Allocation actuary could do it the other way.
The work on gaining that knowledge must start now though if it hasn't already - start with the kernel, and work your way out risk-guys!
In the meantime, I'll look out for that presentation, as this dismissive approach to risk professionals in the Solvency II context was not one I had come across previously.
An online repository for Solvency II, ERM and Corporate Governance material and comment from the Principal of Governance Matters, an independent Risk Consultancy firm based on the Isle of Man.
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