Hi, I would like to know what is the impact of with profit business closure (closure to new business) to the pillar 1 peak 2 realistic balance sheet. Will the WPBR reduced as a result? Thanks in advance
We'll still hold the asset share for the WPBR after closure, so this doesn't change at first. Over time as the book of business runs off the WPBR will gradually run down. However, once the fund is closed we'll start to distribute the estate so that it is used up by the current generation of policyholders (and any shareholders). So we will increase the Future Policy Related Liabilities until the surplus is zero. This is briefly described in Chapter 13 Section 2.2. See also the recent thread on Zero Working Capital. Best wishes Mark
