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Life Insurance (prudential standard) determination No. 2 of 2023
Future stresses for mortality and morbidFuture stresses for mortality and morbidity
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Future stresses for mortality and morbidity
33. The ‘future stress’ margins, before the adjustment for diversification, must be determined by the Appointed Actuary, having regard to the nature of the mortality and morbidity risks to which the company is exposed.
34. The margins for future stress must be applied from the reporting date for the remaining term of the liabilities. They must allow for the possibility that the best estimate assumptions may need to be changed in 12 months time, either because they were misestimated at the reporting date or because adverse trends have been identified during this period. The size of the margin will depend on the adequacy of the investigations used to determine the best estimate assumptions, and the range of adverse factors that could affect trends in claims experience.