B
bensondros
Member
This question concerns the calculation of the CRR, given the surplus on Peak 1,2 LTICR, RCR and RCM.
The question states that the firm has WP liabilities of £650m, so it's a realistic-basis firm.
According to the core reading, there is no need for a realistic-basis life firm to hold and RCR, so why does the calculation involve the RCR? Is it because it has without profits liabilities?
Secondly, say if the firm is a proprietary rather than a mutual, and writes without-profits business in one fund, and WP in another (with >£500m liabilities). Will it calculate the CRR for each fund separately and then sum them up?
Lastly, how is the realistic asset value for Peak 2 calculated? In the non-core reading notes, it says admissible assets + excess admissible assets + PVFP on any without-profits business written in the WP fund - any assets backing without-profits business written in the WP fund.
For this last term (any assets backing without-profits business written in the WP fund), does this include the capital requirements for the without-profits business? This will probably explain the first question too..
The question states that the firm has WP liabilities of £650m, so it's a realistic-basis firm.
According to the core reading, there is no need for a realistic-basis life firm to hold and RCR, so why does the calculation involve the RCR? Is it because it has without profits liabilities?
Secondly, say if the firm is a proprietary rather than a mutual, and writes without-profits business in one fund, and WP in another (with >£500m liabilities). Will it calculate the CRR for each fund separately and then sum them up?
Lastly, how is the realistic asset value for Peak 2 calculated? In the non-core reading notes, it says admissible assets + excess admissible assets + PVFP on any without-profits business written in the WP fund - any assets backing without-profits business written in the WP fund.
For this last term (any assets backing without-profits business written in the WP fund), does this include the capital requirements for the without-profits business? This will probably explain the first question too..