Guidance

1. The purpose of the underwriting risk component is to require an Insurer to set aside capital to address the risk that the cost of claims will vary from the cost implicit in the premiums being charged. The provisions in this section apply the relevant provisions of Rule A4.10 to the segments of a Cell Company.
2. As Insurance Business in Cell Companies may only be carried on through Cells, every Insurer will have an underwriting risk component of zero in respect of its Minimum Non-Cellular Capital Requirement.