Difference between Gross Premium Valuation vs Net Premium Valuation?

Discussion in 'SP2' started by Kamal Sardana, May 11, 2022.

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  1. Kamal Sardana

    Kamal Sardana Active Member

    What is the difference between Gross Premium Valuation vs Net Premium Valuation? Can you explain me along with example ??

    What is the meaning of estate ? How is it different from Free Surplus ?
     
    Last edited by a moderator: May 11, 2022
    Kamal Sardana, May 11, 2022
    #1
  2. Lynn Birchall

    Lynn Birchall ActEd Tutor Staff Member

    Hi Kamal

    Gross premium valuation and net premium valuations are defined in the Glossary (Chapter 32). They differ in the premiums they use in their calculations, the allowance for expenses and their senstivity to assumption changes. I'd recommend taking a look at the Question / Solution on pages 15 and 16 of Chapterr 20 if you want a reminder of this.

    'Free surplus' is also known as 'free assets'. 'Free assets' and 'estate' are defined in the Glossary too.

    Best wishes
    Lynn
     
    Lynn Birchall, May 13, 2022
    #2

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