Faculty of Actuaries Institute of Actuaries
EXAMINATIONS
April 1998
Subject F — Life Insurance
Paper Two
Time allowed: Three hours
INSTRUCTIONS TO THE CANDIDATE
1. You have 15 minutes at the start of the examination in which to read the
questions. You are strongly encouraged to use this time for reading only but
notes may be made. You then have three hours to complete the paper.
2. You must not start writing your answers in the booklet until instructed to
do so by the supervisor.
3. Write your surname in full, the initials of your other names and your
Candidate’s Number on the front of the answer booklet.
4. Mark allocations are shown in brackets.
5. Attempt all 4 questions, beginning your answer to each question on a
separate sheet.
AT THE END OF THE EXAMINATION
Hand in BOTH your answer booklet and this question paper.
In addition to this paper you should have available
Actuarial Tables and an electronic calculator.
ã Faculty of Actuaries
F2—A98 ã Institute of Actuaries
F2(A)—2
1 A proprietary life office is planning to re-launch its regular premium unitlinked
endowment assurance.
(i) Describe the steps that would be followed in designing and pricing the
product. [14]
(ii) Suggest, with reasons, suitable profit criteria for the product. [3]
(iii) List the items of cashflow that will appear in the profit tests used to
price the product (bases and formulae are not required). [4]
(iv) Outline the principal methods that could be used to take charges from
this product to cover initial expenses, and comment on their suitability.
[7]
[Total 28]
2 A proprietary life office transacts with and without-profits business. The
shareholders’ entitlement to profits from the long term business fund is
specified as 10% of the surplus distributed from that fund.
(i) State with reasons why an embedded value may be calculated for the
office. [3]
(ii) Describe how the realistic embedded value of the office would be
calculated. (Bases are not required.) [9]
(iii) The Customer Services Director is aware of several other life offices
who have published an embedded value profit in their accounts. He
therefore suggested at the last board meeting that the office should
publish a realistic embedded value profit.
Draft a reply to the director setting out the advantages and
disadvantages of his suggestion, describing the factors to

本文April 1998 Subject F—Life Insurance part two全部内容均由用户上传或网络收集,作品版权归所属媒体与作者所有!!巴巴客网已要求用户上传的内容不得具有侵权或违法行为。本站刊载此文不代表同意其说法或描述，仅为提供更多信息。如果您发现该内容具有其他违法行为或您认为我们侵犯了您的版权，请联系我们，我们将立即删除修改。