DE statement ----> Source of Profits statement

[RDH]

Anyone have a good source for the best way to decompose a Stat DE statement into various components parts and then recombine into a Source of Profits statement; particularly with first reference to UL or Deferred Annuity. Many pricing systems provide the analysis and I'd like to try to replicate it with real accounting information. I'm assuming the most difficult part is breaking out the change in reserve to several different components.

DH

[nbd]

Our ledger already has details of change in reserve

change in reserve - net premium

change in reserve - reserve released due to death

change in reserve - reserve released due to lapse

change in reserve - interest credited

You should be able to break the front end loads and other loads.

If it is fund based loads, you use interest credited mechanism.

Surrender charge will be tricky, but it is not impossible.

CARVM allowance or CRVM allowance can be also tricky. But you can match that with initial expenses.

You can look at the output of different system, i.e. Triton, Polysystem,
TAS or PTS should have their sample output. You can study from there too.

[elleminopee]

I think TAS uses the accumulation value as an estimation of reserve in this type of analysis. If you ledger system will capture the different components for the fund rollforward (for example, int cred, COI charges, loads, etc) it should be pretty easy. If it doesn't capture these explicitly, it will be a lot harder. You would probably have to do a lot of rough estimates (maybe using average COI, average spread etc). The last column in TAS is for the Stat Reserve Adjustment. This is basically what is not accounted for by consider the change in accum value (because change in stat reserve is different).