Hello, Why do we even have situations of NP business written in the WPF where there is another NPF that exists? This is in reference to September 2017, Q2. Why couldn't they just write WP in WPF and NP in NPF. I understand that the question here is based on a project to actually implement this but it is just strange how they would be in that situation in the first place. Regards
Hi: it's because these WP funds (at least in the UK) started out as mutuals, which have subsequently demutualised. In a mutual, the profit arising on all business belongs to the WP policyholders, so there is no need for a separate fund. Without-profits business has remained in those funds as the WP p/hs would have had expectations of sharing in the profits from this business and continuing to do so. Having said that, typically a demutualised WP company would consider writing new business into the separate shareholder-owned NPF going forwards, particularly if new products have been launched since demutualisation (eg unit-linked business), for which there would be no policyholder expectation of a share in those profits.
