Reserve release, board pressure and a signing actuary

The core issue is a conflict between commercial pressure and an actuarial judgement that must be objective, evidence-based and transparent. Under the Actuaries’ Code, you must act with integrity, competence and due care, comply with applicable standards, and not allow pressure to compromise professional judgement. Relevant Technical Actuarial Standards require the work to be fit for purpose, documented and communicated with appropriate uncertainty. As signing actuary you may also hold a controlled function or Senior Managers and Certification Regime responsibility, giving you a personal duty to ensure regulatory notifications and technical provisions are not misleading.

The assumptions are not merely ‘within peer range’: peer range is not evidence. Your own mortality experience is 1.4% improvement, not 0.75%, and expense inflation is 4.2%, not 2.5%. Selecting unsupported assumptions to achieve a capital outcome is cherry-picking. The CEO’s reference to job losses is a threat, not an actuarial argument, and must not influence the reserve estimate. The request not to record dissent creates a misleading board record and could mislead the regulator and policyholders. The sudden departure of the previous actuary and your lack of audit committee contact increase the need for independent challenge and documentation.

Before the meeting I would gather the evidence: the CMI analysis, five-year expense experience, supplier contracts and the peer benchmarking sources cited by the CFO. I would quantify the sensitivity of technical provisions and SCR coverage to a range of assumptions, including the CFO’s proposal, your central estimate and an adverse but plausible case. I would ask for independent review, for example from an internal model validation team or an external actuarial adviser, and I would document all challenges and responses.

I would meet the audit committee chair and, if necessary, the board chair before the meeting. My board paper would state clearly that the proposed £45m release is not supported by the evidence, show the range of outcomes, and explain the implications for policyholders, capital and the dividend. I would separate the actuarial assessment from the commercial decision: the board may choose to accept a lower dividend or raise capital, but it cannot instruct an unsupported reserve assumption. I would ask for more time and propose a phased review if the data are genuinely ambiguous. I would also clarify the process for recording dissent in board minutes and ensure the audit committee receives my paper.

I would not sign an actuarial opinion or technical provisions that I believed were unsupported, because that would breach the Actuaries’ Code and could mislead the PRA, policyholders and the board. If the board overrules me, I would record my dissent clearly in the board minutes and in a written note to the audit committee and board chair. I would set out the basis for my view and the range of more reasonable assumptions. I would consider whether I have a duty to notify the regulator, and I would seek advice from my professional body and legal counsel before doing so. I would also check whether any internal whistleblowing policy applies and use it if appropriate.

Resignation is a last resort, not a first response: staying and documenting the disagreement may better protect policyholders and allow a proper challenge. However, if I am asked to sign something misleading, or if the board removes me to avoid challenge, I would consider resignation and a protected disclosure. Throughout, I would keep a contemporaneous record, avoid making personal attacks, and focus on the actuarial evidence and the duty to policyholders and the regulator.