Regulatory Alerts2020-10-23 | DOF 5603431Added
Modifying Circular 9/20 of the Single Circular on Insurance and Sureties
This circular modifies Annex 6.4.11 of the Single Circular on Insurance and Sureties by establishing the Basic Adjustment Factor for Credit Risk (FBA) and the Credit Risk Adjustment Factor (FA) for the second quarter of 2020. It specifies that the FBA for Government Bonds is 18.3333. For asset-backed securities, guaranteed values with collateral or maturities of seven years or less, and guaranteed values without collateral or with maturities exceeding seven years, the FA ranges from 18.3333 for AAA/Aaa ratings to 28.6278 for BBB/Baa2 ratings. These factors are to be applied by insurance institutions to determine the capital requirement factor for the insured issuance.