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PIN A4.8.3

An Insurer must calculate its concentration risk component as the sum of the amounts obtained by applying to each investment exposure that exceeds 10% of the Insurer'sAdjusted Capital Resources the relevant formula set out in the following table, subject to PIN Rule A4.8.4.

Exposure expressed as a percentage of adjusted capital resources Formula to determine concentration risk component
(a) Over 10 up to 25 20% of the amount by which the investment exposure exceeds 10% of Adjusted Capital Resources, up to a limit equivalent to 3% of Adjusted Capital Resources.
(b) Over 25 up to 50 3% of the amount of Adjusted Capital Resources, plus 40% of the amount by which the investment exposure exceeds 25% of Adjusted Capital Resources, up to a limit in total equivalent to 13% of Adjusted Capital Resources.
(c) Over 50 up to 75 13% of the amount of Adjusted Capital Resources, plus 60% of the amount by which the investment exposure exceeds 50% of Adjusted Capital Resources, up to a limit in total equivalent to 28% of Adjusted Capital Resources.
(d) Over 75 up to 100 28% of the amount of Adjusted Capital Resources, plus 80% of the amount by which the investment exposure exceeds 75% of Adjusted Capital Resources, up to a limit in total equivalent to 48% of Adjusted Capital Resources.
(e) Over 100 48% of the amount of Adjusted Capital Resources, plus 100% of the amount by which the investment exposure exceeds 100% of Adjusted Capital Resources.

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