Tuesday, August 30, 2005

A surname and a policy design makes a dirty word

Every line of work has its own distinct flavour and jargon. Here are some in the actuarial line (you might want to refer to Life Insurance I and Life Insurance II to refresh your memory on some of the terms I use here):

i) "Par" = participating
ii) "Non-par" = non-participating
iii) Conventional = participating and non-participating
iv) Non-linked (as opposed to unit-linked) = participating and non-participating
v) RP, LP, SP = regular, limited and single premium respectively
vi) DST = dynamic solvency testing (you don't want to know)
vii) FCR = financial condition report
viii) Free assets/free reserves = assets above that supporting the insurer's liabilities, sama a safety margin
ix) GPR = gross premium reserves (yes, there is also a net premium reserves) = a method for computing reserves
x) Study leave = leave we get for preparing for our actuarial exams (don't get too envious) on top of our annual leave

and so on...

Whilst writing Life Insurance II, I was reminded of a little story during my year and a half of working life. The actuarial department was in a meeting, planning for an impending project. We decided to split the work by product design, i.e. non-participating, participating and unit-linked products. So this encompassed splitting the department into three teams for each. We had three managers then so that made things easy.

One of the managers, Derrick Lum, was someone I really looked up to. He was rock solid, technically strong, calm when things got a little chaotic and possessed some wit and humour to boot. For this big project, he was chosen to lead the participating team. Upon hearing this announcement by the head of department, his eyes twinkled and a grin broke. He cleared his throat and declared in a deliberate manner,

"OK, so you guys (referring to his team members) are now part of the "Lum Par" team."

It is a big loss to the actuarial profession that he has since stopped taking the exams and moved on to other richer pastures. Oh, and I've forgotten if I was part of the "Lum Par" team.

Akan Datang: Life Insurance III

213 days to go.


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