<%@LANGUAGE="VBSCRIPT"%>
<%
option explicit
%>
<%
dim rsArticles, sSQL, gStr
set rsArticles = server.createobject("adodb.recordset")
rsArticles.cursorlocation = 3
sSQL = sSQL & "SELECT TOP 10 Articles.Article_ID, Articles.Article_Title, Articles.Article_Excerpt, "
sSQL = sSQL & "Articles.Article_Content, Articles.Article_Posted, Articles.Article_Comments, "
sSQL = sSQL & "Articles.Article_Images, Categories.Category_ID, Categories.Category_Title, Users.User_ID, "
sSQL = sSQL & "Users.User_Name FROM FB_Users AS Users INNER JOIN (FB_Categories AS Categories "
sSQL = sSQL & "INNER JOIN FB_Articles AS Articles ON Categories.Category_ID = Articles.Article_Category_ID) "
sSQL = sSQL & "ON Users.User_ID = Articles.Article_User_ID WHERE Article_Status = 1 AND Article_Level = 0 "
sSQL = sSQL & "ORDER BY Article_Posted DESC;"
rsArticles.open sSQL, adoConn
Do While Not rsArticles.EOF
gStr = gStr & "
" & vbCrLf
rsArticles.MoveNext
Loop
%>
<%=gStr%>
Original terms insurance
Under this basis a proportion of the original business is accepted on the same terms and conditions as the original life policy, including the premium. Most life business done on this basis is term life insurance.
The reinsurer is tied to the same terms as the original policy for the period of the original term insurance and receives his due share of claims and premium over that period. Under a with profits policy the reinsurer would be expected to follow any bonus levels as declared by the original life office. The trend now if for ‘with profits business’ not to be insured on the original terms basis.
Risk premium reinsurance
Under this basis the life office reinsures the death strain and not the original sum insured. The death strain being the difference between the accumulation of the fund and the sum insured due to be paid out.
The premium charge will vary each year as will the risk as the life fund for that year increases and the death strain reduces. When a claim (death) occurs under the original policy the Reinsurers exposure is the difference between the accumulated reserve for that policy and the nominal sum reinsured. The reinsurer has no liability for surrenders or maturity claims.
Risk premium reinsurance is one of the most common methods of reinsurance used today.
The premium for risk premium reinsurance is based on mortality tables with a small loading to cover the expenses of the reinsurer and fluctuations in mortality experience. The risk premium reinsurance rate therefore increases each year. An example of this in practice is shown below for a male aged 45 next birthday with a twenty year non-profit endowment.
Policy year |
Age next birthday |
Actuarial reserve |
Amount at risk |
Rate of risk premium per mille |
Reinsurance Premium |
1 |
45 |
- |
1,000 |
5.55 |
5.55 |
2 |
46 |
42 |
958 |
5.99 |
5.74 |
3 |
47 |
84 |
916 |
6.50 |
5.95 |
4 |
48 |
128 |
872 |
7.07 |
6.17 |
5 |
49 |
172 |
828 |
7.70 |
6.38 |
6 |
50 |
218 |
782 |
8.38 |
6.55 |
7 |
51 |
264 |
736 |
9.14 |
6.73 |
8 |
52 |
312 |
688 |
9.97 |
6.86 |
9 |
53 |
360 |
640 |
10.89 |
6.97 |
10 |
54 |
410 |
590 |
11.88 |
7.01 |
11 |
55 |
461 |
539 |
12.97 |
6.99 |
12 |
56 |
514 |
486 |
14.16 |
6.88 |
13 |
57 |
567 |
433 |
15.47 |
6.70 |
14 |
58 |
623 |
377 |
16.90 |
6.37 |
15 |
59 |
680 |
230 |
18.47 |
5.91 |
16 |
60 |
739 |
261 |
20.18 |
5.27 |
17 |
61 |
800 |
200 |
22.07 |
4.41 |
18 |
62 |
864 |
136 |
24.14 |
3.28 |
19 |
63 |
930 |
70 |
26.42 |
1.85 |
20 |
64 |
1000 |
- |
- |
- |
In the above example it has been assumed that the whole of the premium is consumed by acquisition costs in the first year.
The risk premium is particularly attractive to a new life office because the initial risk premiums are low and allow a faster development of the life fund. If the life office can obtain a good rate of growth on its investments then its life fund and reserves will grow quicker and reduce the death strain risk to be reinsured.