Important Points for IC 99 - Asset Management Exam
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vii) consideration of requirements for variable linked business & Variable Non-Linked Business, viii) application of requirements for Provisions in determination of mathematical reserves, ix) preparation Statement of Liabilities, x) Preparation of Statement of Liabilities, xi) Determination of solvency margins-ASM, RSM & Solvency Margin.
The IRDA has proposed a move towards a risk-based solvency approach to discourage insurance companies from investing in riskier assets.
The solvency ratio of an insurance company is the size of its capital including its reserves and surplus with reference to all potential liabilities for risks it has taken. Solvency Ratio is an indicator of the insurers long-term survival.
In India, insurers are required to maintain a minimum solvency ratio of 1.50.
Insurance Amendment Act, 2015; Every insurer and re-insurer shall at all times maintain an excess of value of assets over the amount of liabilities of, not less than fifty per cent of the amount of minimum capital as stated under Section 6 and arrived at in the manner specified by the regulations.
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