Q. In the factor-based approach, which factor is typically higher: the factor based on reserve or the factor based on sum at risk?

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

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Q. How is the sum at risk calculated in the RSM calculation?

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Q. What does RSM stand for?

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Q. What are the main risks addressed by the computation of RSM?

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Q. What is the limitation of the factor-based approach in calculating RSM?

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Q. How does the risk-based capital approach address the limitation of the factor-based approach?

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Q. What is the minimum required capital if the formula for RSM yields a lower value?

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Q. Which approach is becoming popular to overcome the limitations of the factor-based approach in risk measurement?

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Q. What is the main limitation of the factors-based approach in calculating Required Solvency Margin (RSM)?

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Q. What is the main advantage of the Risk Based Capital (RBC) approach over the factors-based approach?

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Q. How does the Risk Based Capital (RBC) approach benefit companies with good risk management systems?

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Q. What is the purpose of using Risk Based Capital (RBC) as a tool according to insurance regulators?

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Q. What is the potential consequence of an insurer being solvent but physically insolvent?

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Q. What does ASM stand for in insurance calculations?

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Q. Which of the following assets is assumed to have zero value for ASM calculations?

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Q. How is the value of computer equipment computed for ASM calculations?

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Q. What is the purpose of calculating the solvency ratio in insurance?

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Q. What is the regulatory requirement for maintaining the solvency ratio by insurers?

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Q. What does the profit margin (return on capital) represent?

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