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SABeauty

Member
Under the standard formula method is there a prescription on the stresses that are to be done?

In the notes they mention 2 briefly.

Thanks
 
I dont think there is need to worry too much about the exact stresses as these are subject to change.
I could be wrong but what is in the notes are probably examples of what was prescribed stresses for QIS5 but the as these are from a few years ago they are subject to change.

The stresses are similar types of stress to the current RCR/RCM stresses and are as you would expect:

Mortality - increase in mortality (mainly affects protection business)
longevity - decrease in mortality (mainly affects annuity business)
disability/morbidity - increase in disability (mainly pols with sickness benefits)
lapse - change in lapses (increase or decrease)
Expense - increase in expenses (+ inflation)
catastrophe - increase in people dying over the coming year
revision - increase in amount payable each year
 
Yes, the prescribed stresses will still be to 99.5% VaR measure. However, as these are standard formulae, they usually involve linear formulae of proportion of technical provisions and also earned premiums either at beginning and/or end of a year.
 
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