Dear all, I feel somehow cofused about realistic balance sheet. Explicitly:- 1. Core reading meantions that expenses or charges should be allowed for in the benefit reserve. Q1.1: does it mean that we can use charge based asset share as benefit reserve for a UWP? Q1.2: if yes to 1.1, does it mean that no explicit allowance for future expenses would need to be allowed for in RBS? So accordingly, while doing the calc for the cost of guarantee we should also only allow for future allocated premium (and not the full office premium) and ignore the future expenses (as these will be covered by future unallocated premium)? Q1.3: if yes to 1.1, how can profits from "charge less expenses" emerge? Q1.4: continuation of Q1.3: where should the "charge less expenses" (if this can emerge) be shown in FSA Form 19 both for a 0/100 fund as well as for a 90/10 fund? 2. Core reading mentions that PVIF for NP is to be included in the asset side, and that the assump for the PVIF calc is similarly to an embedded value one. Why not also including PVIF from WP? Under a gross premium valuation we would also be taking "charge less expenses" into account, albeit on a more prudent basis? Hope I am not confusing others here even more... Cheers newcomer
