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RM-4.1.6

The insurance licensee should consider potential market risk events that may affect its solvency. These include the following:

(a) Reduced values of equities due to stock market falls, etc;
(b) Variation in interest rates and the effect on the market value of investments;
(c) A lower level of investment income than planned;
(d) Inadequate valuation of assets;
(e) The direct impact on the portfolio of currency devaluation, as well as the effect on related markets and currencies; and
(f) The extent of any mismatch of assets and liabilities.
Amended: January 2007