I am aware that Zillmer adjustments are not in the syllabus. A question for my own interest. A Zillmer adjustment allows for the initial expenses. Wont this decrease the reserve and its imprudent? Please explain.
Yes, Zillmers are no longer on the syllabus. Yes, a Zillmer reduces the reserve for a net premium valuation, so it makes it less prudent. However, it could be argued that net premium reserves were already far too prudent.
