Regulatory Alerts2019-05-06
Added · Updated
Technical Specifications for RBC 2 Parallel Run for Year Ended 31 December 2018
Insurers, excluding captives, Lloyd’s insurers, and marine mutuals, must conduct a parallel run of the RBC 2 framework for the year ended 31 December 2018 to assess capital impacts prior to implementation on 1 January 2020. The document mandates the calculation of the Prescribed Capital Requirement (PCR) at a 99.5% Value-at-Risk confidence level and the Minimum Capital Requirement (MCR) at 50% of the PCR, with supervisory interventions triggered if the Capital Adequacy Ratio or Fund Solvency Ratio falls below 100% or 50%, respectively. Valuation rules require discounting life liabilities using a three-segment risk-free yield curve with a 3.8% Ultimate Forward Rate for SGD and USD, while defining specific contract boundaries for long-term medical policies and prohibiting negative liability valuations except for specific penalty recoveries.