Glossary

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Term Definition Legal instruments

future policy-related liabilities

01/01/2016

means, in relation to a with-profits fund, the aggregate of the following amounts (to the extent each constitutes a liability) less the aggregate of such amounts (to the extent each constitutes an asset):

(1) planned deductions for the costs of guarantees, options, smoothing and provision of life cover and other benefits from the amount calculated in accordance with Surplus Funds 3.3 or, where a firm is required under Surplus Funds 3.2 to use the calculation method in Surplus Funds 3.4, in accordance with Surplus Funds 3.4;

(2) planned deductions for other costs deemed chargeable to the amount calculated in accordance with Surplus Funds 3.3 or, where a firm is required under Surplus Funds 3.2 to use the calculation method in Surplus Funds 3.4, in accordance with Surplus Funds 3.4;

(3) future costs of contractual guarantees (other than financial options);

(4) future costs of financial options, including guaranteed annuity and cash options;

(5) future costs or proceeds of smoothing;

(6) future liabilities to repay financing costs of a with-profits fund where the firm expects to have to meet such liabilities; and

(7) other future costs related to the provision of the benefits referred to in Surplus Funds 3.4(4) (regardless of whether the firm is required to effect the calculation in Surplus Funds 3.4),

but only to the extent that they are not already included in the amount calculated in accordance with Surplus Funds 3.3 or, if applicable, Surplus Funds 3.4.