"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.

"Tim" wrote:
Why do you think that?

"Mark" wrote
Because it was paid for by the policyholders...

.... just as *any* company's profits are effectively paid for by its
customers...
[What's the difference here?]

"Mark" wrote
... and intended for them.

I don't agree - where did you get that from?

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

"Tim" wrote:
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).

"Mark" wrote
How so?

Eh? Are you asking how the 90/10 gate works? Basically, whenever
With Profit policyholders get bonuses, the shareholders get one-nineth of
that value. So if p/h's get £900 in bonuses, then shareholders get £100.

"Tim" wrote:
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?

"Mark" wrote
Do shareholders automatically get 10% of every payout?

Yep, under the 90/10 gate (see above).

"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?

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

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

Not really. (Most of) it is a reserve of money that
**should have** been paid out to *past* policyholders.

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

"Mark" wrote
And it has a use now.

Fair enough. That's one of the reasons why they are
doing the attribution process now - so that the IE can
be used without going through the formal 90/10 gate.

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

Howso?
Think about it: if they could get at more than 10%
normally, then they wouldn't need to be going through
the process of attributing part to shareholders now!!