Surrender Charge

  • Because of the multitude of problems in any application of a prospective method, a retrospective requirement was adopted.
  • It was felt that the most important relationship to the policyholder would be that between the account value and the cash value.
  • This amount, the surrender charge, is the quantity regulated by the Model
    • [Bonk: NAIC Universal Life Model Regulation]

1984 - SOA - NAIC UPDATE, Society of Actuaries - 24p 

  • At an 1897 Society meeting, Lewis contributed the following views on nonforfeiture values:
    • “Inasmuch as the very suggestion of a surrender charge involves a reference to a reserve, as if the owner of the policy had some peculiar claim upon that reserve, socalled, as a separate and independent fund, I protest against the use of the term ‘surrender charge’.”
  • That view seems in tune with much later efforts - which may resume to sever the traditional link between statutory nonforfeiture values and reserves.

1981 - SOA - My Great-Grandfather the Actuary, by Daniel F. Case, The Actuary, Society of Actuaries - 3p