Chapter 9 & 10 - With Profit Surplus Distribution

Question 1

7 points a company needs to consider when determining profits to be distributed:

Answer 1

E xpectations of ph
C ompetition
S moothing of bonuses amd payouts
E xperience (investetment, mortality, expense experience will have impact)
D iscretion (regarding level of bonus it can give)
E quity (fairness to different groups of ph)
D eferral

Question 2

Name the 3 components that will increase with r% under the revalorisation method:

Answer 2

1. Reserve
2. Premium
3. Benefit

Question 3

3 experience items that are included in the surplus formula used to calculate the dividend payment under contribution method profit distribution

Answer 3

• mortality
• investments
• expense