Allocation Of Premiums in Profit Testing

Discussion in 'CT5' started by Kunjesh Parikh, Sep 2, 2017.

  1. Kunjesh Parikh

    Kunjesh Parikh Very Active Member

    When more than 100% of premium is allocated to the unit fund in a year, then should that extra addition to the unit account by the company be regarded as non unit cash outflow?
     
    Kunjesh Parikh, Sep 2, 2017
    #1
  2. Mark Mitchell

    Mark Mitchell Member

    Yes. The extra funds needed to increase the premium paid to the allocated premium would come from the non unit account.
     
    Mark Mitchell, Sep 4, 2017
    #2
  3. Kunjesh Parikh

    Kunjesh Parikh Very Active Member

    I have seen a exam question where this increase was not accounted for in Profit testing.
     
    Kunjesh Parikh, Sep 5, 2017
    #3
  4. Mark Mitchell

    Mark Mitchell Member

    I think you'll need to specify where that was.
     
    Mark Mitchell, Sep 5, 2017
    #4

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