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The Adj component of SCR

V

Viki2010

Member
Hi, would the Adj component only apply for WP business (discretionary element from bonus declarations)?

I've noticed that the Exam Q1 iv does not mention the Adj component as one of the sources of MA impacts, even though the Adj relates directly to TP thus MA would apply here. However the insurer sells only annuities and so no discretionary elements would apply here.
 
Yes, you are correct - there are no "discretionary benefits" for normal immediate annuity business, only for with-profits business.

As mentioned in the Core Reading, "Adj" also includes any reduction in deferred tax liabilities under stressed conditions.
 
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