... insurer with statutory business General business insurer without statutory business 20 10 20 10 (I) Assume ‘X’ represents the greater of the Relevant Premium Income and the Relevant Claims Outstanding. (a) If ‘X’  HK$200 million, the Relevant Amount is :- 20% of ‘X’ (b) If ‘X’  HK$200 million, the...

... insurer with statutory business General business insurer without statutory business 20 10 20 10 (I) Assume ‘X’ represents the greater of the Relevant Premium Income and the Relevant Claims Outstanding. (a) If ‘X’  HK$200 million, the Relevant Amount is :- 20% of ‘X’ (b) If ‘X’  HK$200 million, the...

... practices and decisions. 1.3 The risk-based capital regime (“RBC regime”) for Hong Kong’s insurance industry comprises three key components, commonly known as the “Three Pillars”. Pillar 1 covers the regulatory capital rules and requirements; Pillar 2 covers corporate governance and ERM; and Pillar 3 covers...

... practices and decisions. 1.3 The risk-based capital regime (“RBC regime”) for Hong Kong’s insurance industry comprises three key components, commonly known as the “Three Pillars”. Pillar 1 covers the regulatory capital rules and requirements; Pillar 2 covers corporate governance and ERM; and Pillar 3 covers...

... Volatility = standard deviation = √Σpi (ri – r ) 2 2/7 Example: Find out the expected return and volatility of Fund A and Fund B given the following return scenarios: Probabilities Return of Fund A Return of Fund B 0.2 20% 20% 0.7 25% 40% 0.1 5% -10% Expected return of Fund A: (0.2 x 20%) + (0.7 x 25...

... Fund B given the following return scenarios: Probabilities Return of Fund A Return of Fund B 0.2 20% 20% 0.7 25% 40% 0.1 5% -10% Expected return of Fund A: (0.2 x 20%) + (0.7 x 25%) + (0.1 x 5%) = 22% Expected return of Fund B: (0.2 x 20%) + (0.7 x 40%) + [0.1 x (-10%)] = 31% The volatilities of both...

... Investment-linked Policies x. Risks of Investing in Investment-linked Policies xi. Comparison of Investment-linked Long Term Insurance Policies with Guaranteed and With-Profits Policies A. Guaranteed Policies/Without-Profits/Non-Participating Policies B. With-Profits/Participating Policies C. Comparison Criteria...

... Investment-linked Policies x. Risks of Investing in Investment-linked Policies xi. Comparison of Investment-linked Long Term Insurance Policies with Guaranteed and With-Profits Policies A. Guaranteed Policies/Without-Profits/Non-Participating Policies B. With-Profits/Participating Policies C. Comparison Criteria...

... income assets, the insurer should assume the shock applied as the average of rating band 4 and 5. 4 For example, for a BBB bond with maturity of 6 years, the increase of credit spread would be 220bps as at valuation date, 220bps x 50% at projection year 1, 220bps x 25% at projection year 2 and 0bps at...

... income assets, the insurer should assume the shock applied as the average of rating band 4 and 5. 4 For example, for a BBB bond with maturity of 6 years, the increase of credit spread would be 220bps as at valuation date, 220bps x 50% at projection year 1, 220bps x 25% at projection year 2 and 0bps at...