Chapter 14 - Surrender Values and Alternations of Non-Linked Contracts

Question 1

Principles for Determining Surrender Values (11)

Answer 1

• Consider RBE
• Consider regulation 5 on early termination values
• Consider accrued and future profits from surrendering policy
• Should be based on smoothed EAS
• Consider competitors’ SV’s
• Simple and within administrative capacity
• Allow for cost of effecting surrender
• Well documented and clearly explained to ph
• Not subject to frequent changes, unless necessitated by financial conditions
• Allow fair surrender charge deduction