CTHRepealedLegislation
Insurance (prudential standard) determination No. 7 of 2006 - Prudential Standard GPS 110 - Capital Adequacy
Investment risksInvestment risks
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Investment risks
- An insurer’s capital measurement model must consider the risk that the amount or timing of the cash flows connected with the insurer’s assets will differ from expectations or assumptions as of the valuation date. Factors that must be considered include:
(a) default/counterparty failure;
(b) the future market value of assets;
(c) the liquidity of assets; and
(d) the impact of changes in interest rates on the value of asset cash flows (this includes cash flows from bonds, mortgages, real estate and dividends).