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April 2011, Q2

E

echo20

Member
How come the question says the total liabilities for the company are £250m, but the sum of reserves comes to £424.5m ?
 
How come the question says the total liabilities for the company are £250m, but the sum of reserves comes to £424.5m ?

You don't take the unit reserves into account here because on a unit linked policy, the unit fund (ie the unit reserve) belongs to the policyholder as they take on all of the investment risk.

I am thinking the total liabilities should be the sum of the Annuity and Term assurance reserves + positive value of the non-unit reserves.
 
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