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On 1 January 2008, a life insurance company issued a number of without profit endowment policies maturing at age 60 to lives then aged 40 exact The sum assured is payable at the end of year of death or on survival to the end of the term and level premiums are payable annually in advance throughout the term of the contract. Premiums and reserves on each policy are both calculated on the following basis Mortality: AM92 Select Interest: 4% per annum Initial commission: 60% of the first premium Renewal commission: 6% of each annual premium excluding the first Calculate the annual office premium per E1,000 sum assured for each policy. (2) Jor Calculate the gross premium prospective reserve per 1,000 sum assured for each policy in force at 31 December 2012 (2) (1) Calculate the profit or loss to the company in 2013 in respect of these policies given the following information: The total sums assured in force on 1 January 2013 were E15,500,000 The company incurred expenses relating to these policies of 76.500 on 1 January 2013 (including renewal commission). The total sums assured paid on 31 December 2013 in respect of deaths during 2013 were 295.000. The total sums assured surrendered during 2013 were 625,000. The Surrender value on each policy (which was paid on 31 December 2013) was calculated as 85% of the gross premium prospective reserve applicable at the date of payment of the surrender value. The company eamed interest of 3.5% per annum on its assets during 2013. (10) [Total 14 0 0 0

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