Hi all, In Q10, Oct 2011, we're asked to calculate the reserve at time 5 given that bonuses (super compounding) vest at the beginning of each year. Simple bonuses are 2.5%. There is a 5% bonus on previous bonuses, excluding on the simple bonus for that year. If we're instead told that bonuses vest at the end of each policy year, would it make a difference while calculating reserves for time 5? Thanks
No! Because Net Premium Reserve only concern guaranteed benefit(which is same after for 6th year onward for both situations). But, if it was Gross Premium Reserve answer would differ... because Premium and benefit amount would differ in 2 situations.
Great! Couldn't find any reason why they'd differ, but the ASETs insisted that I wonder what would be the difference Are you giving ct5 in this diet?
