Q28
unpaid losses / (liability/surplus) are we trying to find the surplus/capital here?
why we then multiply by (1-25%)?
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unpaid losses / (liability/surplus) are we trying to find the surplus/capital here?
why we then multiply by (1-25%)?
Comments
You are trying to find the capital that the entity has available. You multiply that to remove the portion of capital that is related to operational and market risk as that is not relevant to the RA