Each year the LV= Board considers whether to declare a mutual bonus and, if so, the level and form of the bonus and which policies should receive it. This takes into account:
- the performance of LV=’s trading business (its life insurance business and its holding in a general insurance business);
- LV=’s capital position;
- smoothing profits and losses; and
- the contribution to LV= made by various groups of policies (for example, the risks taken by them in supporting the establishment and growth of LV=’s trading business).
Currently only members with LV= with-profits policies are eligible to receive a mutual bonus but this may not always be the case. RNPFN Fund and Teachers Assurance Fund with-profits policies are not eligible. Most eligible members will receive the mutual bonus when their LV= with-profits policy ends. The LV= mutual bonus is not a guaranteed benefit and is at the sole discretion of the LV= Board. Previously declared mutual bonus can be taken away in exceptional circumstances (for example, if it were required to protect our financial strength), though it may be subsequently reinstated if the Board considers it appropriate.