Guidance

The purpose of the default risk component is to require an Insurer to set aside capital to cover the risk that amounts receivable from counterparties will not be received. The basic calculation model for this component, as it applies to Insurers that are not Cell Companies, is set out in Rule A4.4. The provisions in this section apply the relevant provisions of Rule A4.4 to each Long-Term Insurance Fund that an Insurer maintains.