Market value adjuster (MVA) explained

When markets are low and withdrawals from the fund are at a high rate, a reduction called a market value adjuster may need to be applied. If an MVA is applied, this means that Clerical Medical will pay out less than the value of your policy.

When we have to apply an MVA, the aim is to ensure we continue to pay out a fair share of the investment performance to each investor, even in exceptional investment conditions. If we didn’t apply a deduction in these investment conditions, the amounts paid out would be too high, and would unfairly reduce the amount available to other investors who remain in the fund and withdraw at a later date.

To ensure that all investors share in the fortunes of Clerical Medical’s Guaranteed Growth Funds, and to provide mutual support to ensure that guarantees can be met, we are currently applying a deduction to provide this support.

Currently, we are applying an MVA to some withdrawals from our Guaranteed Growth Funds because of the falls in stock markets between 2000 and 2002. The level of MVA depends on the currency and date of investment. Please read the ‘Clerical Medical Guaranteed Growth Funds and the market value adjuster explained’ leaflet (reference HE 568) for more information.

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Market value adjuster explained	HE568 (English)	HC568 (Cantonese)

*CMI Insurance Company Limited guarantees that the price of units in the Guaranteed Growth Funds can never fall, although a market value adjuster (MVA) may apply if you withdraw from the funds before the end of the plan term. The level of MVA depends on the currency and date of investment. Please read the ‘Clerical Medical Guaranteed Growth Funds and the market value adjuster explained’ leaflet (HE568) for more information.