P
PersistencyRate
Member
Hi folks
I'm having trouble understanding exactly what is meant in the Core Reading in their descriptions of capital tiers.
Free from incentives to redeem
Tier 3: Only redeemable at the option of the insurer or reinsurance undertaking; limited incentives to redeem are permissible.
What is meant exactly by the italicised phrase? How does Tier 3 differ from Tier 1 where the phrase is not present? Can anyone think of an example?
Sufficient duration
... Contractually locked in or replaced at least equivalently on breach of SCR.
What does "Contractually locked in" mean?
I'm working on the basis that these phrases are not superfluous, i.e. the meaning will be different if we were to remove them. And am struggling to figure out what they mean that is not already explained in the respective core reading paragraphs.
Many thanks in advance to anyone who can share comments!
cheers.
I'm having trouble understanding exactly what is meant in the Core Reading in their descriptions of capital tiers.
Free from incentives to redeem
Tier 3: Only redeemable at the option of the insurer or reinsurance undertaking; limited incentives to redeem are permissible.
What is meant exactly by the italicised phrase? How does Tier 3 differ from Tier 1 where the phrase is not present? Can anyone think of an example?
Sufficient duration
... Contractually locked in or replaced at least equivalently on breach of SCR.
What does "Contractually locked in" mean?
I'm working on the basis that these phrases are not superfluous, i.e. the meaning will be different if we were to remove them. And am struggling to figure out what they mean that is not already explained in the respective core reading paragraphs.
Many thanks in advance to anyone who can share comments!
cheers.