IIRC they were not "presented" as deferred annuities, from 1956 they WERE defered Annuities in Law. There was no Fund, just the promised Annuity in exchange for each premium paid and varying according to the table in the contract according to Age when taken. Bonuses were awarded as Bonus Annuity, not as cash fund amounts.( a fund value might have been considered irrelevant prior to the introduction of OMOs).Presumably there were some of these older contracts still around in 1988. How then did ELAS justify running them in a different manner, namely with explicit fund values, declared rates of return and guaranteed annuity rates to convert funds to annuities? Had they removed the older "worded as deferred annuity" contracts from the "does TB get GAR" question, they would at least have reduced their exposure.Going back to 1956, there was probably a junior actuary slaving over a mechanical calculator, projecting the premiums at the GIR and applying the GAR. This was done not per policy, but to build the table of values for conversion of premium to annuity. There were various short cuts which could be employed, so the explicit GIR/GAR approach may only have existed at the level of the underlying mathematics.None of this has anything to do with unit linked policies of course.
© Copyright 1998-2013, The Motley Fool Limited. All rights reserved. This material is for personal use only.The Motley Fool, Fool, and the "Fool" logo are registered trademarks of The Motley Fool, Inc.Place of Reg: England & Wales. Company Reg No: 3736872. VAT Reg No: 945 6990 68. Registered Office: 5th Floor, 60 Charlotte Street London W1T 2NU.
Page load time and server: