PIN A6.9 PIN A6.9 Size factor component
PIN A6.9 Guidance
The effect of the size factor component is to provide a relatively higher capital requirement in respect of segments with smaller portfolios of
Invested Assets. The provisions in this section apply the relevant provisions of PIN section A4.9 to the segments of a Protected Cell Company.
The base figure for the size factor component is determined by aggregating the following components, for the segment:(a) the aggregate of the default components determined in accordance with PIN section A6.4, in respect of
Invested Assets;(b) the investment volatility risk component determined in accordance with PIN section A6.5; and(c) the concentration risk component determined in accordance with PIN section A6.8.
Insurermust calculate the size factor component in respect of a segment by multiplying the base figure for that segment as determined in accordance with PIN Rule A6.9.1 by the factor derived by applying the following formula, where x represents the total Invested Assetsof the segment, expressed in millions of dollars:(a) if x ≤ 100, the factor is 1.5;(b) if 100 < x ≤ 200, the factor is (150 + 0.5(x-100))/x;(c) if 200 < x ≤ 1,200, the factor is (200 - 0.2(x-200))/x; and(d) if x > 1,200, the factor is zero.