The core reading says Paid up sum assureds should be supported by the earned asset share at the date of conversion on the basis of future experience. I thought that "earned asset share" referred to historical experience but this is suggesting that it should be supported by the prospective value. Which is it? Or is it both?
I think it's clumsy wording. Is this any better: (The value of) Paid up sum assureds on the basis of future experience, should be supported by the earned asset share at the date of conversion. ?
Yes I think that's better. But why are they mentioning future experience at all? In terms of equating policy values is it saying that for the SV side of the calculation, if using a prospective value, check it doesn't exceed the retrospective value and if it does, just use the retrospective value?
It's because they're trying to compare the value of the paid up sum assured with the asset share. The paid up sum assured is an amount payable in the future (on death or maturity). Need some assumptions in order to work out its present value. This present value can then be compared with the asset share. Hope this helps Lynn
