Regulatory Alerts2021-01-14
Stress Test Requirement for Long Term Insurers
The Financial Services Commission of Mauritius issued these guidelines to require all long term insurers to calculate their minimum capital buffer, known as the Stress Test Requirement, by taking the higher of Termination and Ordinary Capital Adequacy Requirements. The framework provides detailed formulaic methods to quantify capital needs across ten specific risk categories, including lapse, investment, and foreign exchange risks. Insurers must apply prescribed valuation assumptions and margins while incorporating board-approved management actions to ensure sufficient assets cover future liabilities under adverse market conditions.
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