On Tue, 23 Jun 2009 16:09:43 +0100, "Tim" wrote:

"Mark" wrote
IMHO any such "inherited estates" should
be used to pay current policy holders. ...

"Tim" wrote:
Would you be saying that if it had turned out that the inherited
estate wasn't needed, in order to pay the current policyholders
their guaranteed benefits and a reasonable return -- would you be
happy in that case to have paid *all* the IE to the shareholders?

"Mark" wrote
No. I meant what I said. All money from the IE should go to
policy holders, none, 0%, nothing should go to shareholders.

Why do you think that?

Because it was paid for by the policyholders and intended for them.

"Mark" wrote
There is a case, if anyone in the past was underpaid,
for them to be traced and given a share...

Ahem - the IE exists *because* higher bonuses were not declared
in the past on old policies. But if higher bonuses *had* been declared,
then the shareholders would have got their cut at the time - the classic
"90/10 gate" (90% goes to WP policyholders' bonuses, 10% to shareholders).

How so?

So - if it had been paid to the old policyholders previously,
the shareholders would have got their share then. Why
do you think they *shouldn't* get their share now, if past
policyholders were traced and got their share now?

Do shareholders automatically get 10% of every payout?

"Mark" wrote
... One of the reasons we are in this mess is they didn't
smooth properly and paid out too much in the past.

"Tim" wrote:
Eh? If they *had* paid out too much in the past,
then there wouldn't *be* any inherited estates!!

"Mark" wrote
Looking at it from the other side: why are there many policies with
shortfalls when they have a big pot of money for this very purpose?

What 'purpose' do you think the "big pot of money" (IE) is for?

It is a reserve of money to pay out to policy holders when times are
lean. Like now.

It wasn't created deliberately; it has arisen because no-one knew
exactly what level of bonuses should have been declared in the past...

And it has a use now.

Going back to the original topic shareholders often get a lot more
than 10%.

--
(\__/) M.
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