J
Jeff
Member
Hello and thank you for this forum!
If a company has >500m with-profits liabilities it is classified as realistic-basis only. So it has to perform a twin-peaks assessment for it's with-profits business. More precisely for each of its with-profits funds.
1. If the company writes without-profits business also, but outside the with-profits fund(s), how is that without-profits business valued?
As if it is a regulatory-basis firm? So only Peak 1 for regulatory-basis firm.
OR
If valued as a realistic-basis only, would one be valuing the business only under Peak 1 for realistic-basis only firms. If that is the case, there would be no RCR - that would be a problem!
In either case the WPICC is only determined for the with-profits funds.
2. If the without-profits business is written within a with-profits fund(s), how is that without-profits business valued? I understand that the without-profits business being in the with-profits fund has an influence on the with-profits valuation under Peak 2 - both assets and liabilities because profits are being allocated from the without profits business. However, I don't have clarity on how the without profits business is valued.
Could you help me get clarity on this?
Thank you!
If a company has >500m with-profits liabilities it is classified as realistic-basis only. So it has to perform a twin-peaks assessment for it's with-profits business. More precisely for each of its with-profits funds.
1. If the company writes without-profits business also, but outside the with-profits fund(s), how is that without-profits business valued?
As if it is a regulatory-basis firm? So only Peak 1 for regulatory-basis firm.
OR
If valued as a realistic-basis only, would one be valuing the business only under Peak 1 for realistic-basis only firms. If that is the case, there would be no RCR - that would be a problem!
In either case the WPICC is only determined for the with-profits funds.
2. If the without-profits business is written within a with-profits fund(s), how is that without-profits business valued? I understand that the without-profits business being in the with-profits fund has an influence on the with-profits valuation under Peak 2 - both assets and liabilities because profits are being allocated from the without profits business. However, I don't have clarity on how the without profits business is valued.
Could you help me get clarity on this?
Thank you!