Guidance

1. 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. The provisions in this section apply the relevant provisions of Rule A4.12 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 a Long-Term Insurance risk component of zero in respect of its Minimum Non-Cellular Capital Requirement.