Each product needs to sustain itself (risk+actuarial adjustment), pay for itself (admin and distribution costs) and give a return to the owners. You can’t use the actuarial adjustment as return of capital or the company is going to fail eventually.
The owners of the capital want the pool to sustain itself and a return of capital forever. You cant use the same money for both.
Each product needs to sustain itself (risk+actuarial adjustment), pay for itself (admin and distribution costs) and give a return to the owners. You can’t use the actuarial adjustment as return of capital or the company is going to fail eventually.
The owners of the capital want the pool to sustain itself and a return of capital forever. You cant use the same money for both.