What of a life insurer's is determined by applying factors for risk components to specific on and off-balance sheet assets or liabilities and by adding the results?
Capital requirement, definitely. I wonder if the exam writers have a sense of humor and will throw in a question about the 'annual return of a llama' just to keep us on our toes.
I've been studying this topic extensively, and I'm confident that the capital requirement is determined by applying factors for risk components. Gotta love those regulatory details!
Ashley
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