Entire Section

  • PIN A6.2.2 PIN A6.2.2

    Subject to Rules PIN A6.2.4, PIN A6.2.5, and PIN A6.2.6, an Insurer must calculate its Minimum Segmental Capital Requirement according to the following applicable formula:

    (a) for an Insurer, other than a Captive Insurer: MCR = DRC + IVRC + OARC + OLRC + CRC + SFAC + URC + RRC + LIRC + AMRC;
    (b) for a Class 1 Captive Insurer: MCR = higher of URC and RRC; and
    (c) for a Class 2 and Class 3 Captive Insurer: MCR = DRC + IVRC + URC + RRC;

    where:

    Term Definition
    MSCR Insurer's Minimum Segmental Capital Requirement;
    DRC Insurer's default risk component in respect of that segment;
    IVRC Insurer's investment volatility risk component in respect of that segment;
    OARC Insurer's off-balance sheet asset risk component in respect of that segment;
    OLRC Insurer's off-balance sheet liability risk component in respect of that segment;
    CRC Insurer's concentration risk component in respect of that segment;
    SFAC Insurer's size factor adjustment component in respect of that segment;
    URC Insurer's underwriting risk component in respect of that segment;
    RRC Insurer's reserving risk component in respect of that segment;
    LIRC Insurer's Long-Term Insurance risk component in respect of that segment;
    AMRC Insurer's asset management risk component in respect of that segment.
    Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
    [Added] DFSA RMI296/2021 (Made 24th February 2021). [VER17/04-21]

    • PIN A6.2.2 Guidance

      Because of the provision in PIN chapter 1 that all Insurance Business of an Insurer that is a Protected Cell Company must be conducted through its Cells, the URC, RRC and LIRC components will apply only to Cells.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]