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On a system of Bonus Distribution considered in relation to the Office Premiums and modes of Valuation

Published online by Cambridge University Press:  18 August 2016

Howard J. Rothery
Affiliation:
Institute of Actuaries The British Empire Mutual Life Assurance Company

Extract

It has frequently been insisted upon that in the financial management of a life assurance company the scales of premiums, the method of valuation, and the mode of distribution of surplus should be considered together, and not independently of one another. Many instances could be given of unfairness in the treatment of the members of different classes and ages due to a want of recognition of this principle. It is, of course, impossible, in the practical management of a life office, that abstract justice should be administered as between the various policyholders; but as the system of charging uniform premiums for all ages at entry has given way to that of graduating the premiums according to the age of the life assured, so it may be possible and politic from time to time to find means of making the payments of the assured still more accurately conform to the exact value of the benefits they are to receive.

Type
Research Article
Copyright
Copyright © Institute and Faculty of Actuaries 1893

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References

page 139 note * The reserve values given in Table C do not include the value of existing reversionary bonuses or reductions of premium, it being assumed that these have been apportioned upon a non-profit basis.