A Treasury commissioned review has called for the creation of an Actuarial Standards Board to monitor the ethics and operation of the industry.

Sir Derek Morris has published the final part of his wide-ranging review into the profession.

He recommends that the sector be subject to independent oversight by the Financial Reporting Council - which should establish the new standards board.

The new body should also monitor the actuarial professional bodies, with a new focus on setting ethical standards.

The review urges ministers to address the conflicts surrounding the role of the Scheme Actuary and calls on the profession to broaden its provision of education through closer links with universities and employers.

It also calls on the government to ensure that there are clear whistle-blowing duties and compliance with professional standards so that the wider public interest is protected.

The report also suggests that the government should consider converting the Government Actuary's Department into a trading fund.

"The review has no reason to doubt that the overwhelming majority of actuaries in the UK are dedicated, skilled professionals providing important and useful advice, with commitment, integrity and a strong sense of duty," said Sir Derek.

"However, the review has also identified a number of quite serious problems faced by the profession in the UK and sets out a challenging agenda for reform for the profession."

He added that the review makes a number of recommendations to ensure that there is an "effective market for actuarial services" and recommends that the regulation of the actuarial profession should be subject to independent oversight by the Financial Reporting Council.

"I believe that there is widespread support for these proposed changes. In particular, the actuarial profession has responded in a very constructive way, pursuing reforms that it has itself seen as necessary in the light of the Penrose Report," he said.