Question

What is the purpose of multiplying the first factor by K1 in the RSM calculation?

a.

To adjust for the impact of reinsurance on reserves

b.

To increase the reserve amount

c.

To decrease the reserve amount

d.

To calculate the sum at risk

Answer: (a).To adjust for the impact of reinsurance on reserves Explanation:Multiplying the first factor by K1 adjusts for the impact of reinsurance on reserves, ensuring an accurate calculation of the solvency margin.

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Q. What is the purpose of multiplying the first factor by K1 in the RSM calculation?

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