SURVEY OF POLICY CONTRACT GUARANTEES 

Insurer Name:

Date:

Contact Person:

	Name:

	Title:

	Telephone Number:

PLEASE PROVIDE DETAILED RESPONSES BY NOVEMBER 10, 1999

A.	Interest Rate Guarantees:

1) 	Contract Guarantees (includes guarantees on future premiums, amounts on deposit, settlement options, etc.):

Describe any interest rate guarantees contained in policy contracts, broken down by:

i)  Country
ii)  Line of business
iii)  Type of policy (universal life, adjustable life, deferred annuities, or other (describe))
iv)  Those provided in contracts in force and those in currently issued contracts.

For each breakdown of contracts in force, provide an estimate of the policy liabilities on those contracts as a percentage of total policy liabilities as at the date of the last annual return.

Information on blocks of business deemed immaterial should not be provided (If the blocks excluded due to immateriality, when totalled, represent a material amount, discuss the guarantees in general terms.).  Describe the standard of materiality used in this survey.

2)	Impact of Guarantees:

a)	What has been the financial impact of these guarantees in each of the last three years?  (Identify the impact in terms of current costs and increases in policy liabilities.)

b)	If the current yield curve were to drop by 1 per cent and remain there indefinitely, for which of the products listed in question 1 would there be a material financial impact due to the guarantees?  Discuss the impact and reasons for it.

3)	Action:

a)	Has action been taken to mitigate the financial impact of the guarantees on contracts in force?  If yes, discuss.

b)	What action has been taken or is planned regarding the guarantees offered in currently issued contracts?

4)	Other Concerns:

 a)	Are there any actions that you would like to take to mitigate the impact of the guarantees but are not doing so because of concerns such as policyholders’ reasonable expectations or competitive issues?  If yes, discuss.

b)	Are there any implied guarantees that you are concerned about?  If yes, discuss.

5)	Pricing:

a)	Is testing performed in the pricing of products to assess the financial impact of guarantees? If yes, discuss.

b)	Is there a pricing policy in effect for guarantees?  If yes, describe.

6)	Policy Liabilities:

a)	How are the guarantees being recognized in determining policy liabilities?

b)	What changes would be made in the methodology and assumptions for determining  policy liabilities if the current yield curve were to drop by 1 per cent and remain there indefinitely?

7)	Dynamic Capital Adequacy Testing (DCAT):

a)	How are the guarantees being reflected in DCAT investigations?

b)	Have the DCAT investigations shown that guarantees may have a material financial impact?  If yes, discuss.

B.	Other Policy Contract Guarantees (exclude guarantees on segregated funds):

a)	Describe any other type of guarantee in policy contracts for which there has been a material financial impact in the last three years or for which there is a concern that guarantees will become operative in the future and have a material impact.  Discuss the impact or concern.

b)	What has been the financial impact of these other guarantees in each of the last three years? (Identify the impact in terms of current costs and increases in policy liabilities.)

C.	Additional Comments: