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Instructions
Determination of Winner
The winner of the game will be the company with the largest VALUE at the end of 3 years (rounds), plus the sum of stockholder dividends paid during the 3 years.
VALUE equals:
- Total Company Free Surplus (i.e., surplus not allocated to risk based capital), plus...
- Present Value of Future Net Additions to Free Surplus (at 12%) from Business Inforce, plus...
- Present Value of Future Net Additions to Free Surplus from Business Not Yet Sold (but expected to be produced in the next four years from the existing distribution system at its current level of productivity).
Because you have a stockholder-owned company, your shareholders require the payment of an annual shareholder dividend. This dividend amount, equal to 6% of the previous year's total GAAP equity, is automatically paid out every year from available surplus.
To win the game, your company must be able to project the ability to continue paying dividends through at least the second year beyond the last year the simulation is run.
In addition, you must avoid an investigation by the insurance regulator into your operation, so watch your surplus position. You must maintain surplus equal to at least the "company attention level" of Risk Based Capital (RBC). If you fail to maintain adequate surplus, a partial sale of inforce business will be held to raise surplus.
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