Participating Business Committee | The Pacific Life Assurance Co., Ltd.

The Pacific Life Assurance Company, Limited (“the Company”) has established a Participating Business Committee (“PBC”) in accordance with the Guideline on Governance and Management of Fund(s) of Participating Business (GL34) issued by the Insurance Authority of Hong Kong (“the IA”).

The PBC operates independently and reports directly to the Company’s Board of Directors (“the Board”). Its primary role is to provide independent and objective advice to the Board on the management of the Company’s applicable participating funds, including but not limited to advice on recommendations made by the Appointed Actuary on the allocation of distributable surplus/profits and declaration of dividends and dividend accumulation rate. This supports informed decision making by the Board which takes into account the principle of fair treatment of customers and equitable balance between shareholders and policyholders. Key duties of the PBC include:

(1)	Assessing, reporting on, and providing advice to the Board on the Company’s management of its applicable participating funds, particularly the exercise of discretion by the Company.
(2)	Providing advice on recommendations from the Appointed Actuary regarding the allocation of distributable surplus/profits and the declaration of dividends and dividend accumulation rate.
(3)	Evaluating whether participating policyholders are treated fairly, having regard to the rights and interests of different groups, classes, or cohorts of policyholders, and ensuring consistency with the Company’s corporate policy on governance of the Participating Business.
(4)	Considering, at a minimum, the following areas when advising the Board:
	(a)	whether the level of future discretionary benefits provided in the benefit illustration is clear, fair, and reasonably achievable;
	(b)	the policy and mechanism for allocating distributable surplus/profits and dividends and dividend accumulation rate declaration (including any smoothing mechanisms), taking into account reasonable expectations of policyholders (including but not limited to their expectations relating to reasonable achievement of discretionary benefits), fairness and equity, as well as sustainability;
	(c)	the fairness, equity, and reasonableness in allocation of expenses and charges to and within applicable participating funds;
	(d)	the risk and investment profile of applicable participating funds, including the appropriateness of the risk appetite and risk level taken, the management and reasonable balance of risk and return, etc.;
	(e)	the impact of any management actions planned or implemented;
	(f)	the use, purpose, and terms of any shareholder capital support to an applicable participating fund;
	(g)	the Company’s communications with existing policyholders relating to applicable participating funds, including fairness and transparency of disclosed information which may affect policyholders’ decisions; and
	(h)	any other issues which the Company or the PBC considers appropriate in relation to the Company’s management of its applicable participating fund.
(5)	Meeting at least annually (and more frequently as needed) to discuss and advise on the above matters.
(6)	Reporting directly to the Board at least once per year on its advice on the management of applicable participating funds and communication of relevant information to existing policyholders.
(7)	Responding directly to any inquiries from the IA concerning the performance of the PBC’s functions.
(8)	Informing the Board accordingly and notifying the IA about the matter and how the interest of policy holders is affected as soon as practicable if the Board decides to deviate from the advice given by the PBC in a way that may adversely affect the interests or decisions of policyholders.
(9)	Preparing an annual statement for publishing on the Company’s website.