I am referring to part (ii) , the solution says look at the analysis of valuation surplus: is the withdrawal surplus consistent with your experience results? Does valuation surplus here refers to one year's surplus or accumulated surplus? Also, how would looking at analysis of valuation surplus help? Also, how analysis of the change in Embedded value help? Please advise. In part (iii), why won't higher withdrawal rates always imply prudence? Please explain why higher withdrawal rates will be less prudent if the discontinuance terms are such that the company overall makes a profit on discontinuance. Is this because lots of premiums have been paid and expenses have been recouped and no benefit was paid due to a lapse and a profit was made? Please advise.
