C
curiousactuary
Member
I've read in a past paper solution that the embedded value equals the "present value of shareholder transfers. e.g. as generated by bonus declarations".
When it comes to shareholder transfers under a 90:10 fund - are there two components to it as follows:
1. 1/9th of the present value of the future cost of the bonuses that are paid to policyholders.
2. The shareholder's share of net assets. (e.g. 10% of the estate under a 90:10 fund).
I'm interested to know whether shareholder transfers includes or excludes the point in bold above. I am studying for SA2 but want to understand this which comes from SP2.
Thanks in advance.
When it comes to shareholder transfers under a 90:10 fund - are there two components to it as follows:
1. 1/9th of the present value of the future cost of the bonuses that are paid to policyholders.
2. The shareholder's share of net assets. (e.g. 10% of the estate under a 90:10 fund).
I'm interested to know whether shareholder transfers includes or excludes the point in bold above. I am studying for SA2 but want to understand this which comes from SP2.
Thanks in advance.