Important Points for IC 99 - Asset Management Exam
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In case of non-life business, liabilities (accident claims) of a much shorter duration, assets with shorter duration and liquidity-ensured assets are required to be selected as a policy and practice of ALM.
In Indian perspective, the Appointed Actuary has the major role and responsibility to ensure the asset liability management in insurance business as per regulatory requirement.
Asset and liabilities of business must be considered together, since almost all non-life insurance policies and plans are yearly contracts unlike life insurance policies.
Solvency margin in Non-life insurance business is calculated as the excess of ASM (Available Solvency Margin) over the RSM (Required Solvency Margin).
For estimation of liquidity and the capacity to meet its liability to policyholders and then shareholders in time in future, it is necessary to convert the future value of cash flows from assets and operative incomes, into present value figures.
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