Question

How is Required Solvency Margin (RSM) calculated based on net premiums (RSM-1)?

a.

RSM-1 = 20% of (Higher of Gross Premiums * Factor A and Net Premiums)

b.

RSM-1 = 30% of (Higher of Gross Premiums * Factor A and Net Premiums)

c.

RSM-1 = 20% of (Gross Premiums * Factor A)

d.

RSM-1 = 30% of (Gross Premiums * Factor A)

Answer: (a).RSM-1 = 20% of (Higher of Gross Premiums * Factor A and Net Premiums) Explanation:Required Solvency Margin based on net premiums (RSM-1) is calculated as 20% of the higher of (Gross Premiums * Factor A and Net Premiums).

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Q. How is Required Solvency Margin (RSM) calculated based on net premiums (RSM-1)?

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