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F202 (Life Fellowship) queries

Discussion in 'South Africa' started by Arsenal_forever, Jun 30, 2016.

  1. Arsenal_forever

    Arsenal_forever Member

    Hi,

    Have queries on the notes/exam-questions/readings which I'll post into this thread. If it gets too clustered, I'll start a new thread.

    Am studying from and referencing the F202 syllabus for 2016.

    (1) Core Reading: Unit 17, Section 2.3.1.6 Withdrawals.
    Query: Please explain why the notes mention that, to determine for withdrawals when doing the AOS, we subtract EDS(w) i.e. the contribution to expected-death-strain from withdrawals.

    The total surplus is calculated as: Opening year reserve (1+i) + (Premium net of expenses - Withdrawal benefit) * (1 + 0.5i) - EDS(w)

    With the exception of the EDS(w), the withdrawal surplus calc makes sense.
    I don't see how withdrawals contribute to EDS? The mortality surplus is reduced when withdrawals are allowed for. This therefore implies (in my opinion) that the contribution to EDS for withdrawals is removed.
     
    Arsenal_forever, Jun 30, 2016
    #1

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