Good day, I just wanted to verify if my reasoning is correct regarding the impact of the error. The ER states that premiums would have purchased too many units but I didn't see any mention of people transferring or retiring with policy values that are too low because of the error in the unit price. Is one point less important than the other or am I missing something? Thanks much!
The main content of the solution is all about how the company is going to deal with the customers who have been paid too little on claim, as these will be the ones who have been most disadvantaged (eg the points about identifying who has been impacted, not just amongst the ones the still in-force, calculating the correct historic prices for those who have claimed in the past, working out the rectification due to them etc). There is also explicit mention (briefly) in the solution about also needing to think about those who have paid premiums and purchased too many units due to the error - as this isn't perhaps so obvious. Such policyholders will have gained from the error, so the company needs to think carefully about how it is going to deal with this (if at all), particularly for those who have already left.
