PIN A8.2.1

Subject to Rule A8.2.3, an Insurer must calculate the Minimum Fund Capital Requirement in respect of each Long-Term Insurance Fund maintained by it, according to the formula:

MFCR = DRC + IVRC + OARC + OLRC + CRC + SFAC + LIRC + AMRC

where:

Term Definition
MFCR Minimum Fund Capital Requirement in respect of the fund;
DRC Default risk component in respect of that fund;
IVRC Investment volatility risk component in respect of the fund;
OARC Off-balance sheet asset risk component in respect of the fund;
OLRC Off-balance sheet liability risk component in respect of the fund;
CRC Concentration risk component in respect of the fund;
SFAC Size Factor Adjustment Component in respect of the fund;
LIRC Long-Term Insurance risk component in respect of the fund; and
AMRC Asset management risk component in respect of the fund.