Equity between with-profits policyholders and shareholders

Document description

This paper considers equity, or fairness, as being based on with-profits life insurers acting in accordance with their contracts. It uses the principles of with-profits business in conjunction with a legal approach to derive implied terms in with-profits contracts.  The author examines certain situations of conflict between with-profits policyholders and shareholders.  The paper does not regard all concerns put forward on behalf of policyholders' interests as justified in practice: actuaries and regulators have been alert to issues and in many cases have taken appropriate action.  However, it does identify a number of practices that may be unfair.  The paper also suggests that the current process for the reattribution of an inherited estate may favour shareholder interests over policyholder interests.