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Understanding My Policy

Nordben’s Triple C Plan is a retirement savings product that was available in seven currencies until Nordben stopped issuing this product to new business in 2015.  It pays out at least the accumulated account (Policy) value on retirement (maturity) or on earlier death.

WHAT ARE THE POLICYHOLDERS' FUNDS?

The seven currency Policyholders’ Funds (the Funds) are held by Nordben to meet its liabilities under the Triple C Plan retirement savings product. 

HOW ARE THE FUNDS INVESTED?

The Funds invest in long-term government fixed interest bonds and either equity funds or corporate bonds. The Funds also hold a small level of cash for management and liquidity purposes.

The primary investment strategy for each Fund is to invest an appropriate percentage of its assets in fixed interest bonds in order to generate cash-flows that will meet the guaranteed liabilities. This effectively means that the bonds held have a range of maturity dates and some maturity dates are long into the future. The bonds held for these purposes are highly rated government bonds.

The remaining assets are then invested to seek the best return for policyholders within an acceptable level of risk.  Investment returns earned by the assets are retained within the Funds.

The Funds are invested as follows (as at 30 September 2018):

 

CHF

DKK

EUR*

GBP

NOK

SEK

USD

Government Bonds

0.0%

99.1%

98.6%

85.2%

22.3%

81.1%

80.6%

Corporate Bonds

0.0%

0.0%

0.0%

0.0%

59.1%

0.0%

0.0%

               

Indexed Equity Funds

0.0%

0.0%

0.0%

12.6%

18.2%

18.9%

18.2%

Cash

100.0%

0.9%

1.4%

2.2%

0.5%

0.0%

1.2%

               

Average modified duration of

fixed interest assets (years)**

0.0

0.9

12.3

16.0

10.9

11.6

13.5

               

*The EUR Fund is allowed to invest in German, French, Finnish and Dutch Government Bonds.

**The modified average duration is a measure of how the value of a fixed interest asset changes in relation to its yield.  The higher the duration, the more sensitive the asset is to changes in interest rates.

 



The performance of the Funds also depends on the expenses they have to meet, which are outlined below.

WHAT ARE THE EXPENSES OF THE POLICYHOLDERS’ FUNDS?

The Funds need to meet various expenses (costs).  These costs include the investment management charges, policyholder protection charges and an expected shareholder charge payable to Nordben. 

The expected shareholder charge is:

  • Part of Nordben’s revenue to meet the costs of administering the Triple C Plan Policies including making payments from the Policies, complying with anti-money laundering legislation, tax reporting and fulfilling compliance and data protection responsibilities.
  • Used to ensure that Nordben has sufficient capital to meet any guaranteed liabilities (in the event such liabilities cannot be met by the Funds themselves).

The above costs are itemised in the table below:

Charge

Charging Basis

Investment management charges

0.085% per annum of funds under management (per Fund) subject to a minimum amount of NOK 150,000

Charges in respect of the Guernsey Policyholder Protection regime

GBP 25,000 spread across all Funds

Expected shareholder charge*

0.60% per annum increasing by 0.05% per annum until 1%

*The expected shareholder charge is only taken in a given year after Nordben consults with the Appointed Actuary. This charge taken may be lower than that described above.  If the charge taken from a Fund in a given year is lower than the charge that Nordben wishes to take in that year, we will (if possible) in subsequent years recoup the monetary shortfall.

Nordben continues to reserve the right to increase the expected shareholder charge by more than the percentages described above.  Future announcements regarding any increase to the expected shareholder charge will be published on this website.

 
In addition, there may be direct charges which apply to your Policy (such as a paid up charge; a charge applied to premiums paid; or charges for optional death/disability benefits).  Please contact us to discuss any direct policy charges.

WHAT IS THE BONUS PAID TO MY POLICY?

The Triple C Plan retirement savings product features a bonus which is credited to the accumulated account (Policy) value each year.  The bonus is paid from the Funds to your Policy.

The bonus is declared in December each year and credited to your Policy in the following January (i.e. declared in December 2017 and credited in January 2018).

The bonus is split into two parts: a discretionary bonus and a guaranteed bonus.

The guaranteed bonus is as per the terms of your Policy.

If the discretionary bonus is lower than the guaranteed bonus, Nordben will credit your Policy with the guaranteed bonus. Conversely, if the discretionary bonus is higher than the guaranteed bonus, Nordben will credit your Policy with the discretionary bonus.

Please login to view the guaranteed bonus history which applies to your Policy.

The discretionary bonus for each Fund is declared annually and is available by clicking here.

ENHANCEMENT

The enhancement is currently set to ensure that policyholders receive a fair share of the Fund when they are paid their benefits. 

The enhancement is determined by Nordben’s Board at its discretion upon taking account of the advice of the appointed actuary.  The approach for setting the enhancement is not guaranteed and may be changed without notice.  The primary concern when setting the enhancement is to ensure that the Funds are able to meet their liabilities.

The enhancement depends on market conditions at the time and so it can be volatile.  In particular, the values of the assets are sensitive to changes in interest rates.

The enhancement for each Fund is declared monthly and is available by clicking here.

EXPLAINING THE BENEFITS I RECEIVE FROM MY POLICY ON PAYMENT?

  • On death or retirement, you will receive the accumulated account value plus an enhancement (if one applies).
  • Should you surrender your Policy before retirement, you will receive the surrender value plus an enhancement (if one applies). Please note that the surrender value could be less than the accumulated account value (if a surrender charge is applied).

A surrender charge may apply to a Fund if Nordben’s Board feel it is necessary after consulting with the appointed actuary.  The approach to determining surrender charges is not guaranteed and can be changed without notice.  The primary concern when setting surrender charges is to ensure that the Funds are able to meet their guaranteed liabilities.  Currently the approach to determining whether a surrender charge is appropriate is to compare the value of a Fund’s assets to the total account values of policies in that Fund.  If the value of the Fund’s assets are less than the total account values plus a margin then a surrender charge may apply.

No surrender charge is currently being applied to each Fund (but as described above, Nordben reserves the right for this to be changed).

BONUS REGULATIONS (HOW IS THE BONUS DETERMINED?)

In order to determine bonuses, a financial review is carried out by Nordben’s appointed actuary each year. The financial review compares Nordben’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 Nordben’s financial position.

One part of the financial review is to determine the surplus (excess of assets over liabilities) in each currency Fund.  The surplus mainly arises from investment returns, but may also come from profits and losses arising from payments (retirement, death or surrender) from the Fund.

Nordben’s Board determines how much of the surplus is to be distributed to policies as a bonus after due consideration of the advice from the appointed actuary and taking account of the Nordben’s bonus philosophy.  Nordben operates a bonus smoothing policy so that investment returns are smoothed out over time, that the surplus is fairly distributed overtime and that the cost of smoothing is broadly neutral over the longer term.

Bonuses are not necessarily expected to remain at constant levels, nor are they necessarily expected to reflect investment returns from year to year.

Once credited to your Policy, bonuses are guaranteed in full if held to retirement (so cannot be deducted from your Policy).