Hi
The check that's being done at any point in time is that:
total reserve > surrender value
ie (unit fund + non-unit reserve) > (unit fund - surrender penalty)
At times when the non-unit reserve is positive (such as time 3 and time 2), this will automatically be true, so we don't have to mention checking the surrender penalty.
We only need to check that the surrender penalty is bigger than any negative non-unit reserve.
Hope this helps
Lynn
Last edited: Jul 12, 2009