Flex Plan Bonus: Bonus Regulations

The bonus for the Flex Plan is computed and distributed annually in accordance with regulations determined by Nordben. A financial investigation is carried out each year by Nordben’s Actuary. The investigation compares Nordben’s assets with its liabilities and considers other technical aspects with regard to Nordben’s activities.  One part of the investigation is to determine the surplus of each Flex Plan currency. The surplus arises from three main sources.  The prime source is investment returns but mortality and disability profits (if any) contribute to surplus as do profits arising from surrenders, lapses and paid up policies.

The Board of Directors having regard to the advice of the Actuary will determine how the surplus is to be distributed.

Bonus to Policyholders

The Flex Plan bonus is added to each policyholder’s account at the end of the year. A proportion of the full annual rate of bonus is credited in relation to each part of the account which has been held for a period other than a full year.

Transfer to Policyholder's Reserve Fund

The bonus declared in any one year does not necessarily fully reflect the investment performance in that year as Nordben operates a policyholders’ reserve fund for each Plan and currency. Transfers are made to and from these reserve funds depending on the surplus disclosed.  Policyholders’ reserve funds were established in order to smooth out the effects of fluctuations in the capital markets in which the policyholders’ funds are invested.

Charge on Policyholders’ Funds

Nordben has the right to make a charge on policyholders’ funds.  The Board has determined that, at present, the charge will not exceed a half of one per cent per annum.  Nordben reserves the right to increase the level of this charge.