Entire Section

  • PIN A8.9 PIN A8.9 Size factor component

    • PIN A8.9 Guidance

      The effect of the size factor component is to provide a relatively higher capital requirement in respect of Long-Term Insurance Funds with smaller portfolios of Invested Assets. The provisions in this section apply the relevant provisions of PIN section A4.9 to each Long-Term Insurance Fund that an Insurer maintains.


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

    • PIN A8.9.1

      The base figure for the size factor component is determined by aggregating the following components, for the Long-Term Insurance Fund:

      (a) the aggregate of the default components determined in accordance with PIN section A8.4, in respect of Invested Assets;
      (b) the investment volatility risk component determined in accordance with PIN section A8.5; and
      (c) the concentration risk component determined in accordance with PIN section A8.8.

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

    • PIN A8.9.2

      An Insurer must calculate the size factor component in respect of Long-Term Insurance Fund by multiplying the base figure for that fund as determined in accordance with PIN Rule A8.9.1 by the factor derived by applying the following formula, where x represents the total Invested Assets attributable to that fund, 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.

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