Q:1 Core reading said that if Supervisory reserves are taken as prudent then do not consider Lapses. If supervisory reserves are realistic (market consistent) then do consider lapses explicitly in reserving basis. How removal of lapses will make my reserves prudent? Q.2 What does it mean when we say that reserves used in determination of Net assets should be consistent with those used in determination of PVFP (in case of Embedded values)... ?? I mean reserves under PVFP will based on purpose of calculation. So what does consistent mean over here?
Hi Kamal Please could you give me page references for these quotes. The answers will depend on the setting and I will need to look that up. Best wishes Mark
