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Question - Tier 1 Capital etc

S

shyguy

Member
1) What is Tier 1 Capital - is it the quality assets held by a general insurer whether or not they back the the free reserves.

2) How are expenses incurred prior to the setting up of a product (eg reaearch) allocated eventually in the accounts of a company or for that matter a Lloyd's syndicate and how does this affect the level of DAC if at all?
 
Tier 1 Capital: see Chapter 6, section 3.8 on page 35. For even more depth if you're really interested, take a look at the Sourcebook on the FSA website.

Accounts laws in the country concerned would say how expenses should be allocated. It would also depend on the types of accounts (eg management or supervisory). I would imagine that research counts as a "one-off or ongoing overhead". I don't think DAC would be affected, as research prior to sale is hardly an acquisition cost in the same sense as commission would be??
 
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