A Review of the Statutory Valuation of Long-Term Insurance Business in the United Kingdom

P.W. Wright, S.J. Burgess, R.G. Chadburn, A.J.M. Chamberlain, R. Frankland, J.E. Gill, D.J. Lechmere and S.F. Margutti

British Actuarial Journal, 1998, vol. 4, issue 4, 803-864

Abstract: This paper considers the approaches currently used by life offices for statutory valuations, and proposes a number of changes to current practice. It builds on the earlier work of Philip Scott's Working Party and a working party which reported on all aspects of unitised with-profits business to the 1996 CILA conference. Recommendations are made for each of the major categories of long-term business, in particular for the introduction of a bonus reserve standard for accumulating with-profits business, whilst retaining the net premium standard for conventional with-profits business. It is proposed that the current net premium approach for non-profit business should be replaced by a gross premium method. The paper also develops a greater codification of the calculation of non-unit reserves on linked business. Considerable emphasis is placed on the requirement for statutory reserves to have regard to PRE. It is assumed throughout that the E.C. Third Life Directive remains in its current form. A number of examples are provided which illustrate the proposed method for accumulating with-profits business. Appendices to the paper include a draft of suggested consequential changes to the Insurance Companies Regulations 1994, and a revised supporting version of the whole of GN8.

Date: 1998
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:bracjl:v:4:y:1998:i:04:p:803-864_00

Access Statistics for this article

More articles in British Actuarial Journal from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().