Insurance: The Risk Factor
fe Bureau: Feb 08 2013, 23:52 IST
like claims, surrender benefits and maturity benefits and based on future projections of these payouts, an insurer will arrive at its liability. The Irda has suggested that risk charge should be applied for all mandated and non-mandated assets of the insurer. For life insurers, assets pertaining to the non-linked business should only be considered as the risk pertaining to the linked business is being borne by the policyholders. For life insurance companies, the minimum solvency will be the policy reserve as disclosed by an actuarial valuation of the liabilities and for non-life insurance companies it will be based on the net premium or net claim.
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