Sample Q20 part b
Why is only underwriting risk and reserve risk considered in the initial capital for the CoC method?
Could you point to where this is referenced in the wiki or source material?
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Why is only underwriting risk and reserve risk considered in the initial capital for the CoC method?
Could you point to where this is referenced in the wiki or source material?
Comments
Because by definition the risk adjustment is only meant to cover non-financial risks. This is covered on page 23 of the RA paper or footnote on page 22.