What about following issues : 1 iv) all actions seemed to decrease the ICA requirement - was there something that I have missed ? 1 v) what was the impact on Pillar 1 of product C ? In my opinion at the beginning it will be a strain due to the prudence in calculation of liabilities and PV of future income from property sale. 2 ii) how the Pilar 1 available capital will be affected by the securitisation ? In my opinion it depends an increase is possible but also a slight decrease 2 iii) main points I have made : a) the need to find the investment bank with experience b) decide on the business to be securitised, the term of securitisation, whether to add the NB c) calculate the value of future surpluses - decide on the basis, methodology and RDR - the need to have external audit d) decide on terms of agreement - any restrictions on the use of capital by company e) TCF and PRE - seek advice from WPA and AFH and discussion when it would be unfair this is all that came to my mind
Tomas: Most of this sounds good to me. 1 iv) I would have thought that a couple of the options (ie the swaps and one other, I think) might introduce some counterparty risk - but I felt overall that the ICA would probably fall in each case 1 v) I think one important point was that the firm wrote no WP business, so was likely to be a Regulatory Basis Life Firm: given this, I agree it seems likely that surplus would be reduced since a prudent mathematical reserve would have to be set up and the RCR might also increase. 2 i) I thought it would release capital if Peak 1 was biting because this business does not take account of future profits when valuing assets, and so wouldn't need to take account of the contingent liability. If Peak 2 was biting, I felt it could go either way. 2 iii) Your answer sounds more comprehensive and concrete than my answer - I definitely should have put some of your points down.
I forgot about this effect Obvous point i did not make - I do not know why the longer I think about this the worse thoughts I have
I shouldn't worry too much Tomas: sounds like you got a lot down, I was just scratching my head trying to come up with some of the points you hadn't mentioned. With the pass marks somewhere around half marks, I'm not sure you need every last point, just enough sensible ones. I'm just hoping there were enough in what I wrote!
