Thoughts on the new Standards of Practice regarding marriage breakdown, the ASB and the profession

By Micheline Dionne, FCIA

It was with more than a little interest that I followed the recent e-mail exchanges dealing with the new Standards of Practice for Capitalized Value of Pension Plan Benefits for a Marriage Breakdown. These exchanges are a continuation of numerous and sometimes heated discussions over the years. The CIA Board of Directors has also been following this matter closely, inquiring about the steps that have been taken and expressing the hope that all parties do everything they can to uphold the interests of the public.

But what has really happened? Logic dictates that actuaries with differing viewpoints calmly exchange ideas on the fundamental questions, substantiate their positions and reach an understanding on the best approach to take in the public interest. Unfortunately, this is not always how it works. And we must now acknowledge that the latest Standards of Practice have not been unanimously embraced. Some have said that there weren’t enough discussions between the Actuarial Standards Board (ASB) and practitioners. And yet the file has been studied by the ASB for nearly five years—this after being studied by the Practice Standards Council for a number of years before the founding of the ASB.

One would be hard-pressed, then, to conclude that there haven’t been enough discussions. On the contrary: there may have been too many discussions, if such a thing is possible. Ultimately, it seems evident that it’s not in anybody’s interest to take so long to develop a Standard of Practice. At the heart of the matter lies the quality of the discussions. How do we get a healthy exchange of opinions? With the help of a strengthened due process? Perhaps (and I applaud the ASB’s plan to review its due process), but I highly doubt that this takes the place of good will on the sides engaged in such a debate. At the extreme, when both sides are open-minded, the wording of the due process takes on lesser, if not incidental, importance.

Some say that a Standard of Practice cannot be adopted without the approval of the majority of practitioners working in the area concerned. In the past, however, there have been Standards of Practice that failed to garner such approval. One such example was the adoption of liabilities discounting in property and casualty insurance. At first, P&C insurance actuaries would hear nothing of it, whereas life insurance and pension plan actuaries agreed it made no sense to turn a deaf ear to it. Even today there are many P&C insurance actuaries outside Canada who fail to see the usefulness in discounting their liabilities. But in Canada, once the culture shock had passed, this Standard of Practice was accepted, and there has been no talk of reversing course. In other words, this Standard of Practice has stood the test of time.

More and more, actuaries have to explain their techniques and assumptions, not just to their colleagues but to Canadians in general. If actuaries are unable to explain themselves to their colleagues and to find a middle ground in related practice areas, then what chance will they have to respond to the public’s expectations? This strikes me, then, as a healthy exercise and a crucial dialogue, and only time will tell if the new Standards of Practice fit the bill, once all the dust has settled.

So it’s too early to condemn the ASB, but not too early to stress the necessity to engage in a dialogue based on good will. In this regard, I am especially encouraged by the creation of a designated group bringing together actuarial evidence practitioners and the ASB to review the other Standards of Practice affecting this area. The fact that both groups are showing a willingness to work together is cause for hope. We mustn’t forget: our profession stands out through our ability to get to the bottom of things and replace impressions with facts.

If you have any questions or comments that you would like to share, please contact me at

Micheline Dionne, FCIA, is President of the Canadian Institute of Actuaries.