Bonus Information

The Flex Plan bonus is declared in December each year and credited to your Policy in the following January (e.g. declared in December 2023 and credited in January 2024). Premiums credited to the account part way through the year receive a proportion of the full annual rate of bonus.

1 JANUARY 2024 BONUS

The discretionary annual bonus rates for 2023, applying to Account Values from 1 January 2024 are as follows:

Information on the 2021 declaration, average annualised bonus % and annual bonus history for this product is accessible at the following link: Flex Plan Bonus History

FURTHER INFORMATION ON BONUSES

The bonus regulations applying to this product have been issued to Policyholders by regular mail. In addition, an Amendment to the Bonus Regulations is available at the following link: please click here. If you have any questions, please contact us (https://nordben.com/contact/).

In order to determine bonuses, a financial review is carried out by the insurer's Appointed Actuary each year. The financial review compares the insurer's assets (the total value of our investments) with its liabilities (the total value of money we owe to our policyholders in respect of our insurance contracts) and considers the insurer's financial position. The basis used for calculating the liabilities is available by contacting us directly. 

In order to manage the risks associated with a declining number of policies, the insurer has entered into a reinsurance arrangement with its shareholder, Monument Re Limited.

One of the principal effects of the reinsurance arrangement is that profits arising in the relevant Funds will become more certain and so future annual bonus declarations on and after 1 January 2021 are expected to follow a set approach which is linked to short term “risk free” interest rates as set out below:

1. The bonus rate in a given year is expected to be based on the following rate which is the rate of return the reinsurer has agreed to provide each year for the sub-funds:

Short term “risk free” interest rate applicable to the currency fund

PLUS the Fixed Enhancement

LESS Fund Management Charges (“FMC”)

The FMC are the Shareholder Charge published in the announcement of 22 October 2018 (available by clicking here) plus an investment management charge of 0.085%.

• The bonus rate in a given year for all Flex Plan policies is subject to a guaranteed minimum bonus rate of zero, and this will continue to be applied by the insurer, i.e. if the bonus rate is zero your Account Value will remain unchanged from one year to the next.
  
  
• Where the calculation in (1) above results in a rate less than zero for a particular fund the reinsurer has agreed to make up the shortfall relative to the minimum bonus rate of zero. In future years for that particular fund, bonuses will be set to zero until such time that the reinsurer has recouped any previous years’ shortfalls. This is consistent with the insurer's practice in recent years with respect to certain funds which have made insufficient investment returns to cover the annual fund management charges, i.e. if interest rates increase then it is possible that bonuses will be paid in the future but only after losses have been recovered.
  
  

2. The short term interest rate used in the calculation in (1) above will be the 1-year “risk free” interest rate (i.e. the theoretical rate of return of an investment with zero risk) as determined by the insurer's Appointed Actuary and agreed with the reinsurer.
   
   
3. The Fixed Enhancements used in the calculation in (1) above will be constant over the lifetime of the affected policies, having been set with the aim of exhausting the assets of the Funds as the last policy ends under certain assumptions. The Fixed Enhancement rates are shown in the table directly below: