CMFAS BCP The Regulatory Landscape & Industry Frameworks question: relation to a participating (with-profits) fund

CMFAS BCPThe Regulatory Landscape & Industry Frameworks

In relation to a participating (with-profits) fund, the Appointed Actuary typically:

A Guarantees a fixed annual bonus to all participating policy owners
B Recommends bonus or dividend levels consistent with the fund's financial condition
C Sells the participating policies to the public through agents
D Sets the level of dividends that the insurer pays out to its shareholders each financial year

Show the answer and explanation

Answer: B. Recommends bonus or dividend levels consistent with the fund's financial condition

The Appointed Actuary advises on and recommends bonus/surplus distribution for participating funds, ensuring distributions are consistent with the fund's financial position and fair to policy owners. Bonuses are not guaranteed.

Common mistake

Par-fund bonuses are recommended based on fund performance, not fixed or guaranteed.

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CMFAS BCP The Regulatory Landscape & Industry Frameworks question: relation to a participating (with-profits) fund

Answer: B. Recommends bonus or dividend levels consistent with the fund's financial condition

Common mistake

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CMFAS BCP The Regulatory Landscape & Industry Frameworks question: relation to a participating (with-profits) fund

Answer: B. Recommends bonus or dividend levels consistent with the fund's financial condition

Common mistake

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