Distribution

Every year, or every three years if the firm is a friendly society, a firm must assess whether the with-profits fund has an excess surplus.

Where an excess surplus has been identified it can be paid out to policyholders and shareholders according to their rights in the fund.

For policyholders a distribution may be paid by increasing the policy values or, in some circumstances, paid out in cash. It may be paid out at once or over a period of time.