Unauthorized Reinsurer RP formula

jasonchwjasonchw
edited March 2 in Odomirok.14-F

The first part (T-C) supposed to include all the shortfall between total recoverable and the collateral. I don't understand the logic to add the second part (20%(P^n_90 + T^d). It seems to be assuming the collateral to be unreliable in that case.

Comments

  • Staff - ACStaff - AC

    Think of that second part as a supervisory penalty for using unauthorized reinsurance, instead of authorized.

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