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Financial advisory
RES5Financial Advisory Services✓A valuation error of 0.7% of an ILP sub-fund's NAV per unit occurs. Two policyholders are affected: policyholder P is owed $18 of compensation and policyholder Q is owed $50; the sub-fund itself also suffered a loss. What must the insurer do?
At 0.5% or more, policyholders and the sub-fund must be compensated, but the duty to compensate a single policyholder does not apply where the amount due does not exceed $20. P is owed only $18 (de-minimis), so P need not be paid; Q ($50) must be compensated, and the sub-fund must be compensated in all such cases.
The $20 relief covers only P's individual compensation; the sub-fund is still made whole regardless, and Q is above the de-minimis.
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