| At present in the SNA there is an inconsistency between the treatment of property income accruing to pension beneficiaries under a defined benefit scheme and other forms of life insurance. For the pension beneficiaries, the amount of property income ascribed to them matches the increase in their claims with no reduction of property income made according to whether the source of funding is from holding gains or not. For life insurance policies, insurance companies retain part of the holding gains made on reserves belonging to the policyholders but this retention is not treated as part of the fee charged by insurance companies. Thus there may be an understatement of the output of insurance companies. This question needs addressing and also the appropriate treatment when holding losses occur. |
