2. Definitions
2.1. Risk-Based Capital Requirement
(1) The Risk-Based Capital Requirement for an AIFC-Incorporated Insurer that, under PINS 5.3.1 (Approval by AFSA), has been approved to use its own internal model to calculate its Risk-Based Capital Requirement is the amount calculated using that model.
(2) The Risk-Based Capital Requirement for an AIFC-Incorporated Insurer that, under PINS 5.3.1 (Approval by AFSA), has been approved to use its own internal model to replace 1 or more components of its Investment, Insurance and Operational Risk Requirements is the amount calculated using those components as replaced and the other components of the AIFC-Incorporated Insurer’s Investment, Insurance and Operational Risk Requirements.
(3) The Risk-Based Capital Requirement for any other AIFC-Incorporated Insurer is the sum of the AIFC-Incorporated Insurer’s:
2.2. Investment Risk Requirement
An AIFC-Incorporated Insurer’s Investment Risk Requirement is the sum of its:
2.3. Insurance Risk Requirement
An AIFC-Incorporated Insurer’s Insurance Risk Requirement is the sum of its:
- (a) Premium Risk Component;
- (b) Outstanding Claims Risk Component;
- (c) Long-Term Insurance Risk Component; and
- (d) Insurance Concentration Risk Component.
2.4. Operational Risk Requirement
(1) The amount of an AIFC-Incorporated Insurer’s Operational Risk Requirement is 2% of whichever is the higher of:
- (a) the AIFC-Incorporated Insurer’s gross written premiums in the 12 months ending on the Solvency Reference Date; and
- (b) its technical provisions (without deduction for reinsurance) as at the Solvency Reference Date.
(2) However, if the amount calculated under subrule (1) is more than a ceiling, calculated as: then the AIFC-Incorporated Insurer’s Operational Risk Requirement is the amount of the ceiling.
then the AIFC-Incorporated Insurer’s Operational Risk Requirement is the amount of the ceiling.