with-profits

Hi, I am unable to understand the Examiner's report Solution for September 2017 Q2 (iii) which asks us to "determine the amount of assets paid by the NPF to the WPF in respect of future new business". As per my understanding, this asset amount should reflect the future profits of the immediate...

Question 20.3 [SA F102] in the notes: Why is the premium rate not crucial to competitiveness for UK-style With-profits? Part of the solution is: "However, there are two ways in which the premium rate (that is, the level of guaranteed sum assured relative to the premium) can have an effect on...

There is a point regarding profit distribution and investment strategies for Additions to benefit method used: The company would aim to achieve broad equity of profit distribution compared with other cohorts/tranches of with profit policyholder. Does it mean that company will try to smooth out...

Hi, I had a few questions regarding with-profits funds and Solvency II. A with-profits fund would have a Solvency II balance sheet as Assets = BEL guaranteed benefits (1) + BEL future discretionary benefits (2) + Undistributed Surplus (3) + Value of Shareholder transfers (4) From Ch 11...

I was hoping to get some help on this but thought I'd start a new thread. I'm struggling to grasp the way it's explained above given that PVIF = PV(shareholder cashflows) + PV(change in reserves) My understanding is: The projected assets would also include: (charges for cost of smoothing...

Hi In reference to COBS 20 (TCF), I’m wondering what’s meant by the rule “Circumstances under which bonus fdistrubutions can be made or surplus transferred.” Any assistance would be appreciated. Thanks!

Acquisition costs are expressed as a proportion of new business premiums. How is this charged to the AS though (particularly if the company calculates aggregate AS)?

I'm a bit confused about the EV for WP business: PVIF = (PV of projected cashflows) - (PV of change in reserve) = (a) - (b). I'm not sure how to calculate (a): Is this a projection of the asset share? How do we allow for shareholder transfers when these are usually deducted from the asset...

Hi, Ref: CMP, Ch20, p.17 The core reading says that the term aggregate asset share can be used to refer to AS "...for specified product lines or for the whole with-profits portfolio." It then says "This term may also be used to describe the sum of the individual assets shares." Are these two...

I have some questions on the definitions of these: Cost of guarantees = max(0 , guaranteed benefit - AS) Why is this sometimes calculated using smoothed AS? Cost of smoothing = payout - max(AS , guaranteed benefit) There would be a cost if the payout (on death or maturity) is based on...

If an MVR is applied on surrender such that the surrender benefit is the unsmoothed AS, does it mean the following: The guaranteed benefit at the point of surrender is reduced to equal the unsmoothed AS The cost of guarantee = 0 (due to the point above) The cost of smoothing = 0

I have a few questions on terminal bonus: Would a TB be payable on death? The reason I'm asking is because TBs are intended to bring the payout close to the asset share and, if the policyholder dies at a time where the AS is less than the guaranteed benefit, then a TB addition would widen this...

Hi When bonuses are declared, are shareholder transfers moved immediately out of the WP fund (and into the shareholder fund) or do these funds get allocated to the estate first (and then transferred out at a later stage)? Sorry for the silly question but I've seen a few questions that seem to...

Hi, Do we need to know this type of contracts in detail? Thank you. Ming Fei Chong

I'm struggling to understand how the technical provisions for with-profits policies are calculated. The BEL for a with-profits product allows for both guaranteed (ie. including bonuses declared to date) and discretionary benefits (ie. future reversionary and terminal bonuses), where the BEL is...