RE: RE: Don't rush inIvestors are worried over the $500M writeoff in Q4
However its just a lump sum of the hedge costs they incur every Quarter.
So going forward after Q4 the quarterly earnings will increase.
From SLF reports.
The Company currently expenses hedging costs for variable annuities and segregated funds in the period in which they are incurred. In the fourth quarter of 2011, the Company plans to make a method and assumption change related to the valuation of its variable annuity and segregated fund liabilities whereby it will provide for the estimated future lifetime hedging costs of these contracts in its liabilities.
This change is expected to result in a higher level of future earnings from in-force contracts than would be the case using the current methodology."