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Female – Age 65

Frequency of Claims Percentile 1% 5% 10% 25% 50% 75% 90% 95% 99% Max Average Claim Standard Deviation

Deterministic Mortality 26.60% Total Claims 4,570 10,062 17,342 32,036 59,198 82,809 101,148 110,739 124,129 126,750 58,292 31,062

Stochastic Mortality 23.78% Total Claims 1,549 9,037 16,872 39,707 76,609 116,383 150,715 171,050 213,312 556,754 81,372 51,658

The following table summarizes the increase in claim size for both males and females when stochastic mortality is introduced.

Increase in Claim Size with Stochastic Mortality

th

95 Percentile 99th Percentile Max Average Claim Standard Deviation

Male age 65 86% 113% 439% 68% 100%

Female age 65 54% 72% 339% 40% 66%

Additional Sensitivity Testing Similar analysis was performed for joint life products. The models of joint life products showed a similar distribution of claims compared to the single life model described above. We also performed sensitivity analysis on the impact of higher, unscheduled contract holder withdrawals. Unscheduled withdrawals will affect the level of “in-the-moneyness.� In-the6

CAWG_final_comment_Letter_to_A_Committee_111028_0  
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