with profits

Hi ! Good day. Hope you guys are doing well. I have a few queries pertaining asset share & with profit products. Q1: The asset share is effectively the accumulated of premiums with investment returns less any deductions. One of the typical deductions mentioned is the Charges of smoothing. I...

Hi, I got bit confused while reading solution to Q3 in sept 2020 paper. Could you please help me to understand below excerpts and if we can tell the direction of change in BEL and own funds ? " The asset share will be impacted depending on the investment strategy of the conventional with...

Hi, could you please help me with this query in Que 3 (i) of sept 2020 exam paper: ***************** The answer on page 9 on examination report talk about the asset share movement as follows: * The asset share will be impacted depending on the investment strategy of the conventional with...

Hi, I'm struggling to follow the bold text in the following piece of core reading (page 7, Chapter 19 of CMP): "Some companies may allocate smoothed investment returns to asset shares. Bonuses derived from these asset shares would automatically allow for any smoothing policy. However, this...

If a with-profits fund becomes XSE in run-off, can it remain XSE and not pay BLAGAB tax for the rest of the fund's existence? I ask because for other situations where an insurer can take account of losses for tax relief, the company may need to carry out a profit projection to show that the...

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!

Suppose I had two endowment products one with profit and another without profit endowment. And the valuation is a "net premium valuation". And a discount rate of 2.5% pa for with profit and 4% pa for without profit. Zillmerisation is constant for both contracts. So for the "first year end" the...

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)?

Hi, Ref 1: CMP, Ch15, page 9 Ref 2: Flashcard Ch15, card 8 The core reading defines inherited estate as: "the existence of capital within the with-profits fund that has arisen from under-distribution to past generations of policyholders, often referred to as the “inherited estate”..." The...

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...

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...

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...

ASET April 2014 Q1(vii) The solution of this question talks about the asset shares for WP endowment assurance vs whole of life. I'm trying to visualise the difference between the two to further understand what the solution is trying to say - is the diagram below correct?