Insurance Expense Risk Capital Component


This Chapter does not apply to:

  1. (1) a pure reinsurer; or
  2. (2) a mixed insurer;

in respect of life protection reinsurance business or permanent health reinsurance business.


The insurance expense risk capital component is:

  1. (1) in respect of long-term insurance business classes III, VII and VIII, an amount equivalent to 25% of the net administrative expenses in the financial year in question relevant to the business of each of those classes, in so far as the firm bears no investment risk and the allocation to cover management expenses in the contract of insurance does not have a fixed upper limit which is effective as a limit for a period exceeding five years from the commencement of the contract;
  2. (2) in respect of any tontine (long-term insurance business class V), 1% of the assets of the tontine;
  3. (3) in the case of any other long-term insurance business, 1% of the adjusted mathematical reserves.