A reserve created by life insurers for the payment of future bonuses to with profits policyholders.
Tag: RAW
Bonus reserve valuation
A type of gross premium valuation that allows explicitly for future bonuses under with profits contracts. The terms bonus reserve valuation and gross premium valuation are regarded as alternative phrases. For some purposes (certain solvency investigations) a gross premium technique will be used with no allowance for future bonuses.
Bonus sacrifice
The sacrifice by an employee of all or part of his bonus payment. His employer pays an equivalent amount into an executive pension plan for the employee.
Bonus-malus system
A motor insurance system that gives discounts for claimsfree driving and makes surcharges for claims. See NO CLAIMS BONUS.
Bonus/Malus clause
For the claim-free period there is a discount allowed, called ‘bonus’ applied on the renewal premium. Whenever the insured lodges a claim in his Policy, the renewal premium for his Policy is to be loaded by a fixed percentage which loading is called ‘malus.’