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Old 03-17-2019, 01:34 AM
ActuarialDepartment ActuarialDepartment is offline
Join Date: Feb 2018
Posts: 33
Default VM-20 Impact on Term and ULSG

Hi All,

I am reading the TIA material on VM -20 inpact on Term and ULSG and comparing with video of respective section. However I am a little but confused about the conclusion between materials and video.

1. In Materials, page 62, it is saying that:
"For financed term and ULSG, the lower IRR resulted from the loss of tax benefits
• Higher reserves = higher tax deduction
• VM-20 reserves are much lower than the high stat XXX reserves pre-PBR(Model 830 reserves)

My questions here are
• When saying "Higher Reserves", the reserves mentioned here is Tax or Stat reserves? I ask this question because I did not see any change in tax deduction between two scenarios in the video "Example of Tax Benefits Generated by Reserve Financing"
• What is the "Tax Benefit" defined in this context? I compare with the summary table in the video "Example of Tax Benefits Generated by Reserve Financing", I dont see any item that represents for "Tax Benefit".

2. In the video of "20-year level term results", it is saying that:
• 2017 CSO helps non-financed but hurt financed [reduces tax benefit]
My question here is: How the 2017 CSO works to help non-financed but hurt financed?

Could anyone help me on such questions? Thanks a lot!

Best Regards,

Last edited by ActuarialDepartment; 03-17-2019 at 05:20 AM..
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