It was agreed that this meeting would be partially held under Chatham House rules in order that there could be open discussion. Accordingly this is a summary of the meeting and, any speaker who did not wish his or her name to appear, has had those wishes respected.

The panel consisted of four speakers each with a particular point of view. The session was opened with comments about the use of models, regulation and what we might learn from the current crisis. In particular the comments highlighted the gap that appears to have existed and may still exist between those doing the modelling and those overseeing the various financial institutions.

The management of a fund requires a number of decisions as to the fair treatment of policyholders. This paper first considers the difference between the regulatory requirement to treat customers fairly and the longstanding concept within the profession of policyholders' reasonable expectations. The paper then goes on to consider the bearing of risks within the fund, and thus the interactions between the inherited estate and the asset share so often used to guide payouts to customers. Management actions are discussed in normal, and abnormal, times. Lastly, the considerations of distribution of the inherited estate are considered.

Mr A. A. S. Bryans, F.I.A. (introducing the book): On behalf of the authors, I am delighted to start this presentation of our book ‘100 Years of State Pension’. The book has taken us over two years to produce, with it finally arriving from the printers on 15 January 2009. This meeting is the launch of the book.

The agenda for the meeting is for me to give you a presentation about the book. Mr Salter will look at some of the themes of the book, and Mr Redman will conclude by setting the scene for the discussion based on our findings. It is then over to you. We look forward to a lively and interesting discussion. At the end, Mr Hewitt, on behalf of the authors, will answer any points raised in the discussion and Mr Ridsdale will close the discussion.

Several important classes of liability are sensitive to the direction of future mortality trends, and this paper presents some recent developments in fitting smooth models to historical mortality-experience data. We demonstrate the impact these models have on mortality projections, and the resulting impact which these projections have on financial products. We base our work round the Lee-Carter family of models. We find that each model fit, while using the same data and staying within the Lee-Carter family, can change the direction of the mortality projections. The main focus of the paper is to demonstrate the impact of these projections on various financial calculations, and we provide a number of ways of quantifying, both graphically and numerically, the model risk in such calculations. We conclude that the impact of our modelling assumptions is financially material. In short, there is a need for awareness of model risk when assessing longevity-related liabilities, especially for annuities and pensions.

The draft paper sets out the authors' views of what good practice for the actuarial aspects of internal models will look like in 2012, the year Solvency II is expected to be implemented. Actuaries working on internal models can expect to have to follow such practices if their internal models are to be approved for use in calculating regulatory capital. The paper is therefore relevant for actuaries who plan to work on internal model implementation for Solvency II.

Moreover, the risk quantification techniques discussed in the paper can also be used in the Own Risk Solvency Assessment (ORSA) process also required by Solvency II. The paper is therefore relevant to actuaries working in companies that are not planning to apply to use an internal model.

The paper covers both life and non-life insurance and reinsurance, and reviews current practice as well as setting out possible future practice. This leads to identification of areas for research by the Profession to prepare for 2012 and an indication of the directions this work might take.

The paper is effectively a work in progress, and readers should ask themselves what they should do in response to the ideas discussed.