Hi, I am slightly confused in example given in page-17 chapter-25. "Increased in DAC" is not taken into consideration for calculation of "Shareholder's fund". I think definitely "Increased in DAC" should be taken and "Shareholder's fund" should be 276 instead of 273. Please suggest. Regards, Ashok
I think you are confusing gross of reinsurance with gross of DAC. In the balance sheets given to you on Page 17, when it says gross unearned premium reserve it means gross of reinsurance, albeit still net of DAC.