Investment Income on Technical Reserves

Discussion in 'SP7' started by VV1990, Sep 17, 2014.

  1. VV1990

    VV1990 Member

    Hi,

    In relation to calculating investment on technical reserves, should you allow for investment income on DAC?

    Thanks!
     
    VV1990, Sep 17, 2014
    #1
  2. Darren Michaels

    Darren Michaels ActEd Tutor Staff Member

    Hi there

    The main components of the technical reserves are usually the Outstanding Claims Reserve (OCR), the Unearned Premium Reserve (net of DAC) plus an AURR (if required).

    The reserve that is actually held on the balance sheet is the UPR net of DAC and it is this reserve that you should therefore calculate investment income on.
     
    Darren Michaels, Sep 18, 2014
    #2

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