PIN A4.2.1

Subject to PIN Rule A4.2.2, an Insurer must calculate its Minimum 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 the following definitions apply:

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