For recovery structures created before a modeling policy change, how are they affected?

When a modeling policy changes, existing recovery structures created prior to that change typically retain the gross up percentage they had assigned at the time of their creation. This means that these structures do not automatically conform to the new policies or changes in percentage that may be implemented afterward.

Maintaining the previously established gross up percentage ensures that historical data and projections remain consistent and valid, which is essential for accurate reporting and analysis. This approach prevents disruption of historical frameworks and allows for comparative evaluations over time, reflecting how the structures performed under their original parameters.

In contrast, new recovery structures created after the policy change would adopt the updated gross up percentage, but existing ones are preserved in their original state, highlighting the importance of maintaining historical accuracy in financial modeling.