Important Points for IC 99 - Asset Management Exam
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All non-life insurers shall submit the data with respect to the assets and liabilities in the format, Table-ALM-Quarterly as per Annexure-1, on a quarterly basis.
Table-ALM data should be furnished separately for Fire, Marine Hll, Marine Cargo, Health, Motor-Thind party, Motor-Own damage, WC / Employers, Liability, Public / Product Liability; Personal Accident, Engineering, and Miscellaneous classes of businesses.
Stress tests enable insurers to study the quantitative impact of different scenarios and its effect on the solvency of an insurer. The stresses may be financial, operational, legal, liquidity based or be related to any other risk that might have an adverse economic impact on the insurer.
Insurers Board shall ensure timely review of the issues emanating from Table-ALM data and Format-ST-NL and take such corrective action as may be necessary under intimation to the Authority.
To maintain adequate solvency, profitability and liquidity, like banks, insurance companies make the proper mix of investments. That is the ultimate objective of ALM. Real estate may give stable and regular income building. So insurer may have reasonable exposure to real estate, but not too much. Equities can give dividend, sometimes provide the opportunity for large gains, sometimes, but too much exposure to equity is very risky in respect of safety though it provides better liquidity. So insurers exposure to equity investment should follow the prudential and exposure norms as specified by the Regulator in the investment Regulations.
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