-asymmetric risk exposure gain when the underlying asset that moves in one direction is significantly diff erent

from the loss when the underlying asset moves in the opposite direction; f or example, when gains and losses associated with purchasing a call option on a stock are significantly different. Under a call option, when a stock price goes down, the loss incurred is limited to the purchase price of the option. If the s tock price goes up, the purchaser of the call gains in proportion to the rise in the stock's value. -APE Annualised Premium Equivalent 100% OF ANNUALISED FIRST year premium on new contracts regarded as regular premi um business + 10% of the mutual fund sales and the single premiums received on n ew and existing contracts regarded as Single premium business -RSP Recurring Single Premium Neither the timing nor the amount is determined in advance. Pension policies are often structured in this manner so as to allow the p/h maximum flexibility in m aking contributions, e.g. by reference to the level of his/her income in any ye ar. -reinsurance benefits P protection against profit volatility and large claims P protection against multiple claims from a single catastrophic event (eg. Asian tsunami) P to obtain advice and support in an area where the reinsurer has specific technical expertise (eg, underwriting and claims management) P capital efficiency. (# reduce RBC, i.e. regCap) -preliminary term life insurance accounting method that does not require any terminal reserve for a policy at the end of the first year. First-year policy acquisition expenses, s uch as agent commission, medical examination , and premium tax , are often too l arge to leave enough of the end-of-the-year premium for addition to the premium reserve required under state full valuation reserve standards. In order to avoid taking the difference between the amount of the premium remaining and the requi red addition to reserves out of the insurance company's surplus account , the fu ll preliminary term reserve valuation method is sometimes used. This leaves more of the premium available to cover acquisition cost and first-year claims. - modified preliminary term reserve valuation method (commissioners' reserve val uation method) The commissioners' reserve valuation method limits first-year expenses and thus the amount of deferred funding of policy reserves. Policies whose premiums fall below a certain level can be accounted for under the full preliminary term metho d. For policies with premiums above that level, the full preliminary term method is modified by a limitation on the amount of expenses that can be used in figur ing the schedule of deferred reserve funding. -Capitalization factor PV expected premium for non-SP products divided by non-SP NBI