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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Rulebook Modules
Prudential — Insurance Business Module (PIN) [VER15/01-18]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Financial Markets Tribunal

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PIN A4.4 Guidance

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The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

The purpose of the default risk component is to require an InsurerG to set aside capital to cover the risk that amounts receivable from counterparties will not be received. The basic calculation model for this component, set out in PIN A4.4.1, is modified by additional provisions that permit an InsurerG to take account of the reduced default risk where an asset is covered by guarantees or collateral, and impose additional capital charges on assets that are encumbered. In addition, certain assets that are left out of account in calculating an Insurer'sG Adjusted Capital ResourcesG are exempt from the default risk component calculation. Excluding these assets from Adjusted Capital ResourcesG already effectively imposes a 100% capital requirement.

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