• PINS Part A3.9 PINS Part A3.9 Long-term insurance risk component

    Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

    • PINS A3.9 Guidance

      The purpose of the long-term insurance risk component is to require an insurer to set aside capital to address the risk that the net present value of future policy benefits will vary from the amounts recorded as long-term insurance liabilities in the insurer's balance sheet.

      Amended by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.9.1 Application of pt A3.9

      This Part applies to long-term insurance business.

      Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

    • PINS A3.9.2 Long-term insurance risk component

      An insurer's long-term insurance risk component is the sum of the following amounts, so far as they relate to the long-term insurance business of the insurer:

      (a) 1.25% of the amount of provisions in respect of long-term insurance business that is investment-linked insurance, where the contracts are subject to a capital guarantee;
      (b) 0.5% of the amount of provisions in respect of long-term insurance business that is investment-linked insurance, where the contracts are not subject to a capital guarantee;
      (c) 3% of the amount of provisions in respect of long-term insurance business other than business described in paragraphs (a) and (b);
      (d) the amount obtained by multiplying the amount of capital at risk under rule A3.9.3 by 0.1%;
      (e) if the insurer issues policies that are contingent on mortality — the amount of anticipated claims cost arising from a 0.5 per thousand increase in the rate of lives insured dying over the following year.
      Amended by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.9.3 Capital at risk

      (1) Capital at risk of an insurer means the total amount of sums assured on long-term insurance contracts issued by the insurer, less:
      (a) the total amount of mathematical reserves for those contracts; and
      (b) any expected reinsurance and non-reinsurance recoveries as at the solvency reference date.
      (2) For an annuity, the sum assured must be taken to be the present value of the annuity payments.
      (3) The contribution of each contract to capital at risk must be determined separately. If the capital at risk calculated for a contract is less than zero, the capital at risk for that contract is taken to be zero.
      Amended by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.9.4 [Deleted]

      Deleted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.9.5 [Deleted]

      Deleted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.9.6 [Deleted]

      Deleted by QFCRA RM/2013-1 (as from 1st January 2015).