INSURANCE (PRUDENTIAL STANDARDS) (CLASS C, CLASS D and CLASS E SOLVENCY REQUIREMENT) AMENDMENT RULES 2018

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1 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES f 2 eq In paragraph 1, repeal the BSR formula and nsert: 2 LT nt nsert after 2 cur 2 conc adj the followng words BSR orr = BSR orr as calculated n accordance wth paragraph 17; Transton alfactor = shall be 33% for the fnancal begnnng on or after 1 St January 2018; shall be 66% for the fnancal begnnng on or after 1 St January 2019; shall be 100% for the fnancal begnnng on or after 1 St January 2020; Insert after paragraph 16 as follows: BSR 5 cont ' d cont ' d 2 LTVA 2 LTmort 2 LTother 2 LTlong op.5 adj BSR LTmort orr LTsl 2 f LTr 2 eq LTmort 2 LT nt LTlong 2 cur 2 conc LTmort LTsl LTr LTlong 2 LTmort 2 2 Transton alfactor LTmort LTsl LTr LTlong LTVA LTother op adj LTsl LTr 17. The BSR shall be establshed, on an EBS Valuaton bass n accordance wth the followng formula- BSR where- Basc BSR = Basc BSR rsk module charge as calculated n accordance wth paragraph 17a; = operatonal rsk charge as calculated n accordance wth paragraph 32; operatonal and = regulatory captal requrement for regulated non-nsurance fnancal regulatoryadj operatng enttes as determned n accordance wth paragraph 32; and = other captal adjustment rsk charge as calculated n accordance wth otheradj paragraph a. The Basc BSR rsk module charge calculaton shall be determned n accordance wth the followng formula- Basc BSR where- orrbbsr,,j and Basc BSR j, j j operatonal orrbbsr, j = the correlaton factors of the Basc BSR correlaton matrx n accordance wth table A; = the sum of the dfferent terms should cover all possble combnatons of and j; = rsk charge and rsk charge j whch are replaced by the followng: Market, redt, LTInsuranc e ; regulatoryadj j otheradj = market rsk module charge as calculated n accordance wth paragraph Market 17b; = Long-Term rsk module charge as calculated n accordance wth paragraph LTInsurance 17c; and 1

2 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 redt = credt rsk module charge as calculated n accordance wth paragraph 23. Table A Basc BSR orrelaton Matrx orrbbsr, j Market redt LTInsuranc e Market 1 redt LTInsurance b. The market rsk module rsk module charge calculaton shall be determned n accordance wth the followng formula- Market where- orrmarket, = the correlaton factors of the market rsk module correlaton matrx n,j, j and orrmarket j j, j j accordance wth table B; = the sum of the dfferent terms should cover all possble combnatons of and j; = rsk charge and rsk charge j whch are replaced by the followng: fxedincome, equty, LTnterest, currency, concentraton ; = fxed ncome nvestment rsk charge as calculated n accordance wth fxedincome paragraph 18; = equty nvestment rsk charge as calculated n accordance wth paragraph equty 19; = nterest rate / lqudty rsk charge as calculated n accordance wth LTnterest paragraph 20; = currency rsk charge as calculated n accordance wth paragraph 21; and currency = concentraton rsk charge as calculated n accordance wth paragraph 22. concentraton Table B Market Rsk Module orrelaton Matrx orrmarket, j fxedincom e equty LTnterest currency concentrat on fxedincome 1 equty LTnterest currency concentraton c. The Long-Term rsk module charge calculaton shall be determned n accordance wth the followng formula- LTInsurance, j orrltnsurance, j j 2

3 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 where- orrltinsu rance = the correlaton factors of the Long-Term nsurance rsk module, j,j and j correlaton matrx n accordance wth table ; = the sum of the dfferent terms should cover all possble combnatons of and j; = rsk charge and rsk charge j whch are replaced by the followng: LTmortalty, LTstoploss, LTrder, LTmorbdty, LTlongevty, LTVarableAnnuty, LTotherrsk ; = long-term nsurance rsk - mortalty captal as calculated n accordance LTmortalty wth paragraph 24; LTstoploss LTrder LTmorbdty LTlongevty LTVarableAnnuty LTotherrsk = long-term nsurance rsk - stop loss captal as calculated n accordance wth paragraph 25; = long-term nsurance rsk - rders captal as calculated n accordance wth paragraph 26; = long-term nsurance rsk - morbdty and dsablty captal as calculated n accordance wth paragraph 27; = long-term, nsurance rsk - longevty captal as calculated n accordance wth paragraph 28; = long-term varable annuty guarantee rsk captal as calculated n accordance wth paragraph 29; = long-term other nsurance rsk captal as calculated n accordance wth paragraph 30; Table D Long-Term Insurance Rsk Module orrelaton Matrx orrltinsu rance, j LTmortalty LTstoploss LTrder LTmorbdt y LTlongevt y LTVarableAnnuty LTotherrs k LTmortalty 1 LTstoploss LTrder LTmorbdty LTlongevty LTVarableAnnuty 1 LTotherrsk The fxed ncome nvestment rsk charge calculaton shall be determned n accordance wth the followng formula- FIastclass where fxedincom e r = the captal charge factors prescrbed n Table 1A for each type of FIastclass ; FIastclass = value of nvestment n correspondng asset class ;and = addtonal dversfcaton adjustment factor appled to cash and cash equvalent r balances, or 1 for other asset classes. 3

4 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Type of fxed ncome nvestments FIastclass Table 1A aptal charge factors for Statement Source These Rules FIastclass aptal Factor orporate and Soveregn Bonds BSR ratng 0 IIB & II, Lne 1, olumn (1) 0.0% BSR ratng 1 IIB & II, Lne 2, olumn (1) 0.4% BSR ratng 2 IIB & II, Lne 3, olumn (1) 0.8% BSR ratng 3 IIB & II, Lne 4, olumn (1) 1.5% BSR ratng 4 IIB & II, Lne 5, olumn (1) 3.0% BSR ratng 5 IIB & II, Lne 6, olumn (1) 8.0% BSR ratng 6 IIB & II, Lne 7, olumn (1) 15.0% BSR ratng 7 IIB & II, Lne 8, olumn (1) 26.3% BSR ratng 8 IIB & II, Lne 9, olumn (1) 35.0% Resdental Mortgage-Backed Securtes BSR ratng 1 IIB & II, Lne 2, olumn (3) 0.6% BSR ratng 2 IIB & II, Lne 3, olumn (3) 1.2% BSR ratng 3 IIB & II, Lne 4, olumn (3) 2.0% BSR ratng 4 IIB & II, Lne 5, olumn (3) 4.0% BSR ratng 5 IIB & II, Lne 6, olumn (3) 11.0% BSR ratng 6 IIB & II, Lne 7, olumn (3) 25.0% BSR ratng 7 IIB & II, Lne 8, olumn (3) 35.0% BSR ratng 8 IIB & II, Lne 9, olumn (3) 35.0% ommercal Mortgage-Backed Securtes/Asset-Backed Securtes BSR ratng 1 IIB & II, Lne 2, olumn (5) 0.5% BSR ratng 2 IIB & II, Lne 3, olumn (5) 1.0% BSR ratng 3 IIB & II, Lne 4, olumn (5) 1.8% BSR ratng 4 IIB & II, Lne 5, olumn (5) 3.5% BSR ratng 5 IIB & II, Lne 6, olumn (5) 10.0% BSR ratng 6 IIB & II, Lne 7, olumn (5) 20.0% BSR ratng 7 IIB & II, Lne 8, olumn (5) 30.0% BSR ratng 8 IIB & II, Lne 9, olumn (5) 35.0% Bond Mutual Funds BSR ratng 0 IIB & II, Lne 1, olumn (7) 0.0% BSR ratng 1 IIB & II, Lne 2, olumn (7) 0.4% BSR ratng 2 IIB & II, Lne 3, olumn (7) 0.8% BSR ratng 3 IIB & II, Lne 4, olumn (7) 1.5% BSR ratng 4 IIB & II, Lne 5, olumn (7) 3.0% BSR ratng 5 IIB & II, Lne 6, olumn (7) 8.0% BSR ratng 6 IIB & II, Lne 7, olumn (7) 15.0% BSR ratng 7 IIB & II, Lne 8, olumn (7) 26.3% BSR ratng 8 IIB & II, Lne 9, olumn (7) 35.0% Mortgage Loans Insured/guaranteed mortgages IIB & II, Lne 24, olumn (3) 0.3% commercal and farm mortgages IIB & II, Lne 25, olumn (3) 5.0% resdental mortgages IIB & II, Lne 26, olumn (3) 1.5% 4

5 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Mortgages not n good standng IIB & II, Lne 27, olumn (3) 25.0% Fxed Income Investments loans Form 4EBS, Lne 8 5.0% ash and cash equvalents BSR ratng 0 XIX, olumn A 0.0% BSR ratng 1 XIX, olumn A 0.1% BSR ratng 2 XIX, olumn A 0.2% BSR ratng 3 XIX, olumn A 0.3% BSR ratng 4 XIX, olumn A 0.5% BSR ratng 5 XIX, olumn A 1.5% BSR ratng 6 XIX, olumn A 4.0% BSR ratng 7 XIX, olumn A 6.0% BSR ratng 8 XIX, olumn A 9.0% Less: Dversfcaton adjustment XIX, olumn A INSTRUTIONS AFFETING TABLE 1A: aptal charge factors for to a maxmum of 40.0% FIastclass (a) all assets comprsng of bonds and debentures, loans, and other mscellaneous nvestments that are subject to captal charges wthn the fxed ncome nvestment rsk charge shall be ncluded; (b) all non-afflated quoted and unquoted bonds and debentures shall be ncluded n the fxed ncome nvestment charge; (c) all bonds and debentures, loans, and other mscellaneous nvestments shall be reported on a bass consstent wth that used for purposes of statutory fnancal reportng; (d) The captal requrements relatng to cash and cash equvalents shall be reduced by a dversfcaton adjustment of up to a maxmum of 40%; (e) the dversfcaton adjustment n paragraph (d) s determned as 40% multpled by 1 mnus the rato of the largest cash and cash equvalent balance held wth a sngle counterparty to the total of all cash and cash equvalent balance; and (f) amounts are to be reported on an EBS Valuaton bass. 19. The equty nvestment rsk charge calculaton shall be establshed n accordance wth the followng formula- equty where- orreq, = the correlaton factors of the equty rsk correlaton matrx n,j and, j j j orreq, j j accordance wth table 2B; = the sum of the dfferent terms should cover all possble combnatons of and j; = rsk charge and rsk charge j whch are replaced by the followng: Type1, Type2, Type3 ; Type1 = Type1 equty rsk charge as calculated n accordance wth paragraph 19a; Type2 = Type2 equty rsk charge as calculated n accordance wth paragraph 19a; 5

6 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Type3 = Type3 equty rsk charge as calculated n accordance wth paragraph 19a; Equty orr Matrx Type1 Type2 Type3 Table 2A Equty Rsk harge orrelaton Matrx Type1 Type2 Type a. The Type1, Type2 and Type3 equty rsk charges calculaton shall be determned n accordance wth the followng formulas- Max( Eclass,0) Type1 Type1 Max( Eclass,0) Type2 Type2 Max( Eclass,0) Type3 Type3 where- Eclass Equty nvestments Eclass = the captal charge factors whch corresponds to nstantaneous shocks prescrbed n Table 2B for each type of Eclass ; and = Net-Asset-Value (assets mnus techncal provsons and segregated account company labltes) n correspondng equty Table 2B aptal charge factors for Type of equty nvestments class. Eqastclass Statement Source These Rules aptal Factor Strategc Holdngs Strategc Holdngs- Lsted Strategc Holdngsother Type 1 Type 2 IIB, Lne 28, olumn (1) Less IIB, Lne 47, olumn (9) IIB, Lne 29, olumn (1) Less IIB, Lne 48, olumn (9) Equty Securtes Infrastructure Type 3 IIB & II, Lne 19, olumn (9) Less IIB & II, Lne 39, olumn (9) Lsted Equty Securtes Type 1 IIB & II, Lne 20, olumn (9) Less IIB & II, Lne 40, olumn (9) Equtes Type 2 IIB & II, Lne 21, olumn (9) Less IIB & II, Lne 41, olumn (9) Duraton Based Type 1 IIB & II, Lne 22, olumn (9) Less IIB & II, Lne 42, olumn (9) Preferred stocks BSR ratng 1 Type 1 IIB & II, Lne 11, olumn (3) Less IIB & II, Lne 31, olumn (9) 20.0% 20.0% 25.0% 35.0% 45.0% 20.0% 0.6% 6

7 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 BSR ratng 2 Type 1 IIB & II, Lne 12, olumn (3) Less 1.2% IIB & II, Lne 32, olumn (9) BSR ratng 3 Type 1 IIB & II, Lne 13, olumn (3) Less 2.0% IIB & II, Lne 33, olumn (9) BSR ratng 4 Type 1 IIB & II, Lne 14, olumn (3) Less 4.0% IIB & II, Lne 34, olumn (9) BSR ratng 5 Type 1 IIB & II, Lne 15, olumn (3) Less 11.0% IIB & II, Lne 35, olumn (9) BSR ratng 6 Type 1 IIB & II, Lne 16, olumn (3) Less 25.0% IIB & II, Lne 36, olumn (9) BSR ratng 7 Type 1 IIB & II, Lne 17, olumn (3) Less 35.0% IIB & II, Lne 37, olumn (9) BSR ratng 8 Type 1 IIB & II, Lne 18, olumn (3) Less 35.0% IIB & II, Lne 38, olumn (9) equty nvestments Equty Real Estate 1 Type 2 Form 4EBS, Lne 7(a) Less IIB, Lne 43, olumn (9) 10.0% Equty Real Estate 2 Type 2 Form 4EBS, Lne 7(b) Less IIB, Lne 44, olumn (9) 20.0% Letters of redt Type 2 Form 4EBS, Lne (14d) 20.0% INSTRUTIONS AFFETING TABLE 2B: aptal charge factors for Eqastclass (a) all assets comprsng of strategc holdngs except regulated non-nsurance fnancal operatng enttes equty securtes, preferred stock and other equty nvestments are to be reported on a bass consstent wth that used for purposes of statutory reportng and appled a reducton for techncal provsons and segregated account cell labltes that are subject to equty shocks. The net poston shall be subject to captal charges; (b) Short equty exposures (other than those embedded n the techncal provsons and segregated account company labltes) should be gnored for the purposes of the calculaton; and (c) amounts are to be reported on an EBS Valuaton bass. 20. The long-term nterest rate and lqudty rsk charge calculaton shall be establshed n accordance wth the followng formula- LT nterest duraton 1rateshock reserveshareassets 100% duraton rateshock 1 reserveshare assets duraton 1 duraton 2 rateshock assets reservesha re ALMredt 2 where apples for busness where the duraton of assets and labltes s known. duraton 1 = the hgher of (a) 1; or (b) the nsurer s weghted average of the dfference n asset duraton and lablty duraton; (c) The statement source for the weghted average of the dfference n asset duraton and lablty duraton s V paragraph (f) of these Rules; apples for busness where the duraton of assets and labltes s not known. duraton2 s equal to 2; = assumed nterest rate adjustment prescrbed n Table 3A; = quoted and unquoted value of total bonds and debentures, preferred stock, or mortgage loans; s the amount of reserves wth known duraton dvded by the total reserves. The statement source for paragraph (h) of these Rules; and reservesha re s V 7

8 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 AML redt = the total factor determned n accordance wth Table 4A. Type of nvestments assets Table 3A Interest rate adjustment for assets Statement Source These Rules 200 bass pont nterest rate ncrease rateshock Total Bonds and debentures IIB and II, olumn 9, Lne % Preferred stock IIB and II, olumn 3, Lne % Mortgage loans IIB, olumn 3, Lne 30 & II, olumn 3, Lne % INSTRUTIONS AFFETING TABLE 3A: Interest rate adjustment for assets (a) all assets comprsng of total bonds and debentures, preferred stock, and mortgage loans nvestments that are subject to captal charges wthn the nterest rate / lqudty rsk charge shall be ncluded; (b) all quoted and unquoted non-afflated total bonds and debentures and preferred stock shall be ncluded n the nterest rate/lqudty rsk charge; (c) total bonds and debentures, preferred stock, and mortgage loans nvestments shall be reported on a bass consstent wth that used for purposes of statutory fnancal reportng; and (d) amounts are to be reported on an EBS Valauton bass. Table 4A - Asset Lablty Management ( ALM ) redt rteron Has the nsurer mplemented polces on ALM, ncludng tolerances for devaton? Have clear roles and responsbltes for the executon of the ALM program been assgned? Are ALM postons / tolerances communcated to the nvestment functon, senor management and the board on a tmely bass? Have systems and procedures been establshed to dentfy, report and promptly address ALM defcences? Are the ALM polces and procedures revewed and reapproved or revsed at least annually? Is the nsurer s current ALM poston n complance wth the nsurer s polces? Total Implemented If yes, the answers to remanng questons are used, If no, the ALM redt s zero Score for yes answers 10% 10% 10% 10% 10% XX% 21. The currency rsk charge calculaton shall be establshed n accordance wth the followng formula- urrency urrproxybscr urrlab urrast ) where - ( = the captal charge factors prescrbed n Table 5A for each type of 8

9 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 urrency currency where ( urrast -urrlab - urrproxyb scr )<0; = refers to currency type that has been translated to the functonal currency as expressed n Form 4EBS urrency as reported on Form Grossurra st = value of assets correspondng to 4EBS Lne 15 urrast = value of assets correspondng to urrency as reported on Form 4EBS Form 4EBS Lne 15 adjusted to allow for currency hedgng arrangements urrency as reported on Grossurrl ab = value of labltes correspondng to Form 4EBS Lne 39. urrlab = value of labltes correspondng to urrency as reported on Form 4EBS Lne 39 adjusted to allow for currency hedgng arrangements Grossurrl ab and BSR Proxy factor urrproxyb scrclass = refers to the product of BSR Proxy factor = greater of:. the Enhanced aptal Requrement dvded by Form 4EBS Lne 39 Total Labltes for the precedng year;. the average of the above rato for the precedng 3 years. where there are no pror submssons avalable, the BSR proxy factor s the above rato that would be obtaned from the current submsson wthout takng nto account the currency rsk charge. Table 5A aptal charge factors for urrency Rsk aptal Factor urrency Unted States Dollars Bermuda Dollars Qatar Ryals Hong Kong Euro Dansh Krones Bulgaran Levs West Afrcan FA Francs Grossurrast olumn A, Lne 1 olumn A, Lne 2 olumn A, Lne 3 olumn A, Lne 4 olumn A, Lne 5 olumn A, Lne 6 olumn A, Lne 7 olumn A, Lne 8 urrast olumn B, Lne 1 olumn B, Lne 2 olumn B, Lne 3 olumn B, Lne 4 olumn B, Lne 5 olumn B, Lne 6 olumn B, Lne 7 olumn B, Lne 8 Grossurrlab olumn, Lne 1 olumn, Lne 2 olumn, Lne 3 olumn, Lne 4 olumn, Lne 5 olumn, Lne 6 olumn, Lne 7 olumn, Lne 8 urrlab olumn D, Lne 1 olumn D, Lne 2 olumn D, Lne 3 olumn D, Lne 4 olumn D, Lne 5 olumn D, Lne 6 olumn D, Lne 7 olumn D, Lne 8 urrproxyb scr Grossurrl ab 1 x BSR Proxy Factor Grossurrl ab 2 x BSR Proxy Factor Grossurrl ab 3 x BSR Proxy Factor Grossurrl ab 4 x BSR Proxy Factor Grossurrl ab 5 x BSR Proxy Factor Grossurrl ab 6 x BSR Proxy Factor Grossurrl ab 7 x BSR Proxy Factor Grossurrl ab 8 x BSR Proxy Factor If reportng currency ws 0% 25.00% 0% 25.00% 0% 25.75% 0% 26.00% 0% 25.00% 0% 25.39% 0% 26.81% 0% 27.18% 9

10 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 entral Afrcan FA Francs omoran Francs Unted Kngdom Pounds anada Dollars Japan Yen currency 1 currency 2 currency 3 currency 4 currency 5 currency 6 currency 7 currency 8 currency 9 currency 10 olumn A, Lne 9 olumn A, Lne 10 olumn A, Lne 11 olumn A, Lne 12 olumn A, Lne 13 olumn A, Lne 14 olumn A, Lne 15 olumn A, Lne 16 olumn A, Lne 17 olumn A, Lne 18 olumn A, Lne 19 olumn A, Lne 20 olumn A, Lne 21 olumn A, Lne 22 olumn A, Lne 23 olumn B, Lne 9 olumn B, Lne 10 olumn B, Lne 11 olumn B, Lne 12 olumn B, Lne 13 olumn B, Lne 14 olumn B, Lne 15 olumn B, Lne 16 olumn B, Lne 17 olumn B, Lne 18 olumn B, Lne 19 olumn B, Lne 20 olumn B, Lne 21 olumn B, Lne 22 olumn B, Lne 23 olumn, Lne 9 olumn, Lne 10 olumn, Lne 11 olumn, Lne 12 olumn, Lne 13 olumn, Lne 14 olumn, Lne 15 olumn, Lne 16 olumn, Lne 17 olumn, Lne 18 olumn, Lne 19 olumn, Lne 20 olumn, Lne 21 olumn, Lne 22 olumn, Lne 23 olumn D, Lne 9 olumn D, Lne 10 olumn D, Lne 11 olumn D, Lne 12 olumn D, Lne 13 olumn D, Lne 14 olumn D, Lne 15 olumn D, Lne 16 olumn D, Lne 17 olumn D, Lne 18 olumn D, Lne 19 olumn D, Lne 20 olumn D, Lne 21 olumn D, Lne 22 olumn D, Lne 23 Grossurrl ab 9 x BSR Proxy Factor Grossurrl ab 10 x BSR Proxy Factor Grossurrl ab 11 x BSR Proxy Factor Grossurrl ab 12 x BSR Proxy Factor Grossurrl ab 13 x BSR Proxy Factor Grossurrl ab 14 x BSR Proxy Factor Grossurrl ab 15 x BSR Proxy Factor Grossurrl ab 16 x BSR Proxy Factor Grossurrl ab 17 x BSR Proxy Factor Grossurrl ab 18 x BSR Proxy Factor Grossurrl ab 19 x BSR Proxy Factor Grossurrl ab 20 x BSR Proxy Factor Grossurrl ab 21 x BSR Proxy Factor Grossurrl ab 22 x BSR Proxy Factor Grossurrl ab 23 x BSR Proxy Factor 0% 26.96% 0% 27.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% 0% 25.00% INSTRUTIONS AFFETING TABLE 5A: aptal charge factors for urrency Rsk (a) where the reportng currency s the Unted States Dollar, the captal factor charge shall be reduced to:. 0.00% for the Bermuda Dollar;. 0.75% for the Qatar Ryal;. 1.00% for the Hong Kong Dollar. (b) where the reportng currency s the Bermuda Dollar the captal factor charge shall be reduced to 0.00% for the Unted States Dollar. (c) where the reportng currency s the Qatar Ryal the captal factor charge shall be reduced to 0.00% for the Unted States Dollar. 10

11 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 (d) where the reportng currency s the Hong Kong Dollar the captal factor charge shall be reduced to 0.00% for the Unted States Dollar. (e) where the reportng currency s Euros, the captal factor shall be reduced to:. 0.39% for the Dansh Krone;. 1.81% for the Bulgaran Lev;. 2.18% for the West Afrcan FA Franc; v. 1.96% for the entral Afrcan FA Franc; v. 2.00% for the omoran Franc. (f) where the reportng currency s the Dansh Krone the captal factor charge shall be reduced to 0.00% for the Euro. (g) where the reportng currency s the Bulgaran Lev the captal factor charge shall be reduced to 0.00% for the Euro. (h) where the reportng currency s the West Afrcan FA Franc the captal factor charge shall be reduced to 0.00% for the Euro. () where the reportng currency s the entral Afrcan FA Franc the captal factor charge shall be reduced to 0.00% for the Euro. (j) where the reportng currency s the omoran Franc the captal factor charge shall be reduced to 0.00% for the Euro. (k) any adjustment to reflect currency hedgng arrangements shall not apply to the calculaton of urrproxyb scr ; (l) currency hedgng arrangements means dervatve or other rsk mtgaton arrangements desgned to reduce losses due to foregn currency exchange movements, and whch meet the Authorty s requrements to be classed as such; (m) nsurers are to report currences representng at least 95% of ther economc balance sheet labltes; and (n) amounts are to be reported on an EBS Valuaton bass. 22. The concentraton rsk charge calculaton shall be establshed n accordance wth the followng formula- oncastcla ss where - oncentrat on = the captal charge factors prescrbed n Table 6A for each type oncastcla ss of and oncastcla ss = value of correspondng asset n Asset lass. Asset lass ash and ash Equvalents Table 6A aptal charge factors for Statement Source These Rules oncastcla ss aptal Factor BSR ratng 0 XXIA, olumn D 0.0% BSR ratng 1 XXIA, olumn D 0.1% BSR ratng 2 XXIA, olumn D 0.2% 11

12 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 BSR ratng 3 XXIA, olumn D 0.3% BSR ratng 4 XXIA, olumn D 0.5% BSR ratng 5 XXIA, olumn D 1.5% BSR ratng 6 XXIA, olumn D 4.0% BSR ratng 7 XXIA, olumn D 6.0% BSR ratng 8 XXIA, olumn D 9.0% orporate & Soveregn Bonds BSR ratng 0 XXIA, olumn D 0.0% BSR ratng 1 XXIA, olumn D 0.4% BSR ratng 2 XXIA, olumn D 0.8% BSR ratng 3 XXIA, olumn D 1.5% BSR ratng 4 XXIA, olumn D 3.0% BSR ratng 5 XXIA, olumn D 8.0% BSR ratng 6 XXIA, olumn D 15.0% BSR ratng 7 XXIA, olumn D 26.3% BSR ratng 8 XXIA, olumn D 35.0% Resdental Mortgage-Backed Securtes BSR ratng 0 XXIA, olumn D 0.0% BSR ratng 1 XXIA, olumn D 0.6% BSR ratng 2 XXIA, olumn D 1.2% BSR ratng 3 XXIA, olumn D 2.0% BSR ratng 4 XXIA, olumn D 4.0% BSR ratng 5 XXIA, olumn D 11.0% BSR ratng 6 XXIA, olumn D 25.0% BSR ratng 7 XXIA, olumn D 35.0% BSR ratng 8 XXIA, olumn D 35.0% ommercal Mortgage-Backed Securtes/Asset Backed Securtes BSR ratng 0 XXIA, olumn D 0.0% BSR ratng 1 XXIA, olumn D 0.5% BSR ratng 2 XXIA, olumn D 1.0% BSR ratng 3 XXIA, olumn D 1.8% BSR ratng 4 XXIA, olumn D 3.5% BSR ratng 5 XXIA, olumn D 10.0% BSR ratng 6 XXIA, olumn D 20.0% BSR ratng 7 XXIA, olumn D 30.0% BSR ratng 8 XXIA, olumn D 35.0% Bond Mutual Funds BSR ratng 0 XXIA, olumn D 0.0% BSR ratng 1 XXIA, olumn D 0.4% BSR ratng 2 XXIA, olumn D 0.8% BSR ratng 3 XXIA, olumn D 1.5% BSR ratng 4 XXIA, olumn D 3.0% BSR ratng 5 XXIA, olumn D 8.0% BSR ratng 6 XXIA, olumn D 15.0% BSR ratng 7 XXIA, olumn D 26.3% BSR ratng 8 XXIA, olumn D 35.0% Preferred Shares BSR ratng 1 XXIA, olumn D 0.6% BSR ratng 2 XXIA, olumn D 1.2% BSR ratng 3 XXIA, olumn D 2.0% BSR ratng 4 XXIA, olumn D 4.0% BSR ratng 5 XXIA, olumn D 11.0% BSR ratng 6 XXIA, olumn D 25.0% BSR ratng 7 XXIA, olumn D 35.0% BSR ratng 8 XXIA, olumn D 35.0% Mortgage Loans Insured/Guaranteed XXIA, olumn D Mortgages 0.3% 12

13 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 ommercal XXIA, olumn D and Farm Mortgages 5.0% Resdental XXIA, olumn D Mortgages 1.5% Mortgages Not In XXIA, olumn D 25% Good Standng Asset lasses Infrastructure XXIA, olumn D 25.0% Lsted Equty XXIA, olumn D Securtes 35.0% Equtes XXIA, olumn D 45.0% Strategc Holdngs XXIA, olumn D 20.0% Advances to Afflates XXIA, olumn D 5.0% Polcy Loans XXIA, olumn D 0.0% Equty Real Estate 1 XXIA, olumn D 10.0% Equty Real Estate 2 XXIA, olumn D 20.0% ollateral Loans XXIA, olumn D 5.0% INSTRUTIONS AFFETING TABLE 6A: aptal charge factors for (a) oncastcla ss oncastcla ss shall only apply to the nsurers 10 largest counterparty exposures based on the aggregate of all nstruments ncluded n Table 6A related to that counterparty (b) a counterparty shall nclude all related/connected counterpartes defned as: () control relatonshp: f the counterparty, drectly or ndrectly, has control over the other(s); or () economc nterdependence: f one of the counterpartes were to experence fnancal problems, n partcular fundng or repayment dffcultes, the other(s) as a result, would also be lkely to encounter fundng or repayment dffcultes; and (c) amounts are to be reported on an EBS Valuaton bass. 23. The credt rsk charge calculaton shall be establshed n accordance wth the followng formula- debtor where - credt r = the credt rsk captal charge factor for type of debtor as prescrbed n Table 7A; and debtor = recevable amount from debtor net of any collateral placed n favour of the nsurer; and. = addtonal dversfcaton adjustment factor appled to rensurance balances r only takng nto consderaton dversfcaton by number of rensurers, equal to 40%. Table 7A aptal charge factors for debtor Type of debtor debtor Statement Source These Rules aptal Factor Accounts and Premums Recevable In course of collecton Form 4EBS, Lne 10(a) 5.0% 13

14 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Deferred - Not Yet Due Form 1SFS, Lne (10b) 5.0% Recevables from retrocessonal contracts less: collateralzed balances Form 4EBS, Lne 10(c) and nstructon (c) below 10.0% All Recevables Accrued nvestment ncome Form 4EBS, Lne 9 2.5% Advances to afflates Form 4EBS, Lne 4(g) 5.0% Polcy loans Form 1EBS, Lne 6 0.0% Balances recevable on sale of Form 4EBS, Lne (13f) 2.5% nvestments Partculars of rensurance balances BSR ratng 0 XVIII paragraph (d) 0.0% BSR ratng 1 XVIII paragraph (d) 0.7% BSR ratng 2 XVIII paragraph (d) 1.5% BSR ratng 3 XVIII paragraph (d) 3.5% BSR ratng 4 XVIII paragraph (d) 7.0% BSR ratng 5 XVIII paragraph (d) 12.0% BSR ratng 6 XVIII paragraph (d) 20.0% BSR ratng 7 XVIII paragraph (d) 17.0% BSR ratng 8 XVIII paragraph (d) 35.0% Less: Dversfcaton adjustment XVIII paragraph (d) 40.0% INSTRUTIONS AFFETING TABLE 7A: aptal charge factors for debtor (a) all accounts and premums recevable and all other recevables that are subject to captal charges wthn the credt rsk charge shall be ncluded; (b) all accounts and premums recevable, rensurance balances recevables, all other recevables, and rensurance recoverable balances shall be reported on a bass consstent wth that used for purposes of statutory fnancal reportng; (c) collateralzed balances are assets pledged n favour of the nsurer relatng to accounts and premums recevable; (d) the net qualfyng exposure comprses of rensurance balances recevable and rensurance recoverable balances less the correspondng rensurance balances payable and other payables less the qualfyng collateral ssued n favour of the nsurer n relaton to the rensurance balances; (e) the net qualfyng exposure n nstructon (d)() shall be subject to the prescrbed credt rsk captal factor; (f) the total captal requrement relatng to the rensurance balances shall be reduced by a dversfcaton adjustment of up to a maxmum of 40%; (g) the dversfcaton adjustment n nstructon (f) s determned as 40% multpled by 1 mnus the rato of the largest net rensurance exposure, on an ndvdual rensurer bass, to total net rensurance exposure; and (h) amounts are to be reported on an EBS Valuaton bass. 24. The long-term nsurance rsk - mortalty captal calculaton shall be establshed n accordance wth the followng formula LTmortalty 1 NAAR NAAR 2 Where 14

15 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES NAAR1 2 NAAR2 = captal factor for adjustable lfe nsurance busness as prescrbed n Table 8A; = the Net Amount at Rsk of all adjustable lfe nsurance busness. The statement source s VII, olumn (9), Lne 1 of these Rules; = captal factor for non-adjustable busness as prescrbed n Table 9A; and = the Net Amount at Rsk of all non-adjustable lfe nsurance busness. The statement source s VII, olumn (10), Lne 1 of these Rules; Table 8A aptal charge factors for long-term nsurance rsk -mortalty Net Amount at Rsk NAAR1 or NAAR2 aptal Factor 1 aptal Factor 2 Frst $1 bllon Next $4 bllon Next $5 bllon Next $40 bllon Excess over $50 bllon The long-term nsurance rsk stop loss captal calculaton shall be establshed n accordance wth the followng formula = 50% x Net Annual Premum for stop loss covers as prescrbed n LTstoploss VII, olumn (11), Lne 14 of these Rules. 26. The long-term nsurance rsk rder charge calculaton for long-term busness shall be establshed n accordance wth the followng formula = 25% x Net Annual Premum for nsurance product rders not LTrders ncluded elsewhere as prescrbed n VII, olumn (11), Lne 15 of these Rules. 27. The long-term nsurance rsk morbdty and dsablty captal calculaton shall be establshed n accordance wth the followng formula LTmorbdt y ( a) ( b) ( c) ( d) ( e) Where: LTmorbdt y = (a) 7.00% x BSR adjusted reserves for dsablty ncome clams n payment on waver of premum and long-term care as prescrbed n VII, olumn (7), Lne 9 of these Rules plus (b) 10% x BSR adjusted reserves for dsablty ncome clams n payment on other accdent and sckness products as prescrbed n VII, olumn (7), Lne 10 of these Rules; plus ( c) NAP 1 Where = captal charge factor as prescrbed n Table 9A ;and NAP = the Net Annual Premum for dsablty ncome busness actve lves as descrbed n Table 10A; Table 9A aptal charge factors for NAP 15

16 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Net Annual Premum NAP Beneft perod less than or equal to two years, premum guarantee less than or equal to 1 year Beneft perod less than or equal to two years, premum guarantee of more than 1 year but less than or equal to 5 years Beneft perod less than or equal to two years, premum guarantee of more than 5 years Beneft perod less than or equal to two years, premum guarantee less than or equal to 1 year Beneft perod less than or equal to two years, premum guarantee of more than 1 year but less than or equal to 5 years Beneft perod less than or equal to two years, premum guarantee of more than 5 years Statement Source These Rules aptal Factor 1 VII, olumn (9), Lne 7(a) 9.0% VII, olumn (9), Lne 7(b) 15.0% VII, olumn (9), Lne 7(c) 22.5% VII, olumn (10), Lne 7(a) 12.0% VII, olumn (10), Lne 7(b) 20.0% VII, olumn (10), Lne 7(c) 30.0% Net Amount at Rsk NAAR1 Or (d) 12% x net annual premums for dsablty ncome - actve lves for other accdent and sckness products as prescrbed n VII, olumn (11), Lne 8; and plus ( e) 1 NAAR NAAR 2 Where 1 = captal factor as prescrbed n Table 10A; NAAR1 = the Net Amount at Rsk of all adjustable crtcal llness nsurance busness n force as n VII, olumn (9), Lne 2; 2 = captal factor as prescrbed n Table 10A; NAAR2 = the Net Amount at Rsk of all non-adjustable crtcal llness nsurance busness n force as n VII, olumn (10), Lne 2. Table 10A aptal charge factors for NAAR2 aptal Factor 1 NAAR1 or NAAR2 aptal Factor 2 Frst $1 bllon Next $4 bllon

17 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Next $5 bllon Next $40 bllon Excess over $50 bllon The long-term nsurance rsk longevty captal calculaton shall be establshed n accordance wth the followng formula BAR Where: LTlongevty BAR 1 BSR adjusted reserves BAR = captal charge factor as prescrbed n Table 11A; and = the BSR adjusted reserves for longevty rsk as descrbed n Table 11A. Table 11A aptal charge factors for Statement Source These Rules 17 BAR aptal Factor Longevty (mmedate pay-out annutes, contngent annutes, penson blocks) Attaned age of annutant: 0-55 years VII, olumn (7), Lne 3(a) 2.0% years VII, olumn (7), Lne 3(b) 3.0% years VII, olumn (7), Lne 3(c) 4.0% years VII, olumn (7), Lne 3(d) 5.0% 81+ years VII, olumn (7), Lne 3(e) 6.0% Longevty (deferred pay-out annutes, future contngent annutes, future penson payouts) Age at whch annuty benefts commence: 0-55 years VII, olumn (7), Lne 4(a) 2.0% years VII, olumn (7), Lne 4(b) 3.0% years VII, olumn (7), Lne 4(c) 4.0% years VII, olumn (7), Lne 4(d) 5.0% years VII, olumn (7), Lne 4(e) 6.0% 76+ years VII, olumn (7), Lne 4(e) 7.0% INSTRUTIONS AFFETING TABLE 11A: aptal charge factors for For jont and survvor annutes, the youngest age should be used. BAR 29. The long-term varable annuty guarantee rsk captal calculaton shall be establshed n accordance wth the followng formula LTVarableAnnuty Wheren: () ether q TotalBS Re q TotalBAR TotalGMBadjorIM ReqLTVA 1 TotalBS Re = hgher of (a) 1 GV1 2 GV2 3 GV3 ()TotalBAR () TotalGMDB adj and (b) 4 NAR1 5 NAR 2 6 NAR3 ; = the total BSR adjusted reserves for varable annuty guarantee rsk. The statement source for TotalBAR s VII, lne 17, column (7) of these Rules; = the captal requrement charged on guaranteed mnmum death beneft (GMDB) polces multpled by the percentage of GMDB wth multple guarantees. The statement source for the percentage of GMDB wth multple guarantees s lne 32, column (4) of these Rules;

18 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 (v) IM Re qltva = the captal requrement for varable annuty guarantee rsk determned n accordance wth an nsurance group s nternal captal model, f applcable. The statement source for IM Re q LTVA s VIIIA, lne 1, column (7) of these Rules; (v) GV1, GV2, GV3, NAR1, NAR 2, NAR3 have the statement source dentfed n Table 12A; and (v) 1, 2, 3, 4, 5, 6 are the captal factors as prescrbed n Table 13A. 18

19 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Table 12A aptal charge factors for 1, GV2, GV Varable Annuty Beneft Type Guaranteed mnmum death beneft: Return of premum, ratchet and reset Guaranteed mnmum death beneft: Enhanced benefts (roll up) Guaranteed mnmum ncome beneft Guaranteed mnmum wthdrawal beneft Guaranteed enhanced earnngs beneft Guaranteed mnmum accumulaton beneft wth 1 year or less to maturty Guaranteed mnmum accumulaton beneft wth more than 1 year but less than or equal to 2 years to maturty Guaranteed mnmum accumulaton beneft wth more than 2 years but less than or equal to 3 years to maturty Guaranteed mnmum accumulaton beneft wth more than 3 years but less than or equal to 4 years to maturty Guaranteed mnmum accumulaton beneft wth more than 4 years but less than or equal to 5 years to maturty Guaranteed mnmum accumulaton beneft wth more than 5 years but less than or equal to 6 years to maturty Guaranteed mnmum accumulaton beneft wth more than 6 years but less than or equal to 7 years to maturty Statement Source These Rules GV1 lnes 1 and 16, column (2) Lnes 2 and 17, column (2) Lnes 3 and 18, column (2) Lnes 4 and 19, column (2) Lnes 5 and 20, column (2) Lnes 6 and 21, column (2) Lnes 7 and 22, column (2) Lnes 8 and 23, column (2) Lnes 9 and 24, column (2) Lnes 10 and 25, column (2) Lnes 11 and 26, column (2) Lnes 12 and GV 3, NAR1, NAR 2, NAR3 Statement Source These Rules GV2 lnes 1 and 16, column (3) Lnes 2 and 17, column (3) Lnes 3 and 18, column (3) Lnes 4 and 19, column (3) Lnes 5 and 20, column (3) Lnes 6 and 21, column (3) Lnes 7 and 22, column (3) Lnes 8 and 23, column (3) Lnes 9 and 24, column (3) Lnes 10 and 25, column (3) Lnes 11 and 26, column (3) Lnes 12 and Statement Source These Rules GV3 lnes 1 and 16, column (4) Lnes 2 and 17, column (4) Lnes 3 and 18, column (4) Lnes 4 and 19, column (4) Lnes 5 and 20, column (4) Lnes 6 and 21, column (4) Lnes 7 and 22, column (4) Lnes 8 and 23, column (4) Lnes 9 and 24, column (4) Lnes 10 and 25, column (4) Lnes 11 and 26, column (4) Lnes 12 and Statement Source These Rules Nar1 VIII, lnes 1, column (5) VIII, Lnes 2, column (5) VIII, Lnes 3, column (5) VIII, Lnes 4, column (5) VIII, Lnes 5, column (5) VIII, Lnes 6, column (5) VIII, Lnes 7, column (5) VIII, Lnes 8, column (5) VIII, Lnes 9, column (5) VIII, Lnes 10, column (5) VIII, Lnes 11, column (5) VIII, Lnes Statement Source These Rules Nar2 VIII, lnes 1, column (6) VIII, Lnes 2, column (6) VIII, Lnes 3, column (6) VIII, Lnes 4, column (6) VIII, Lnes 5, column (6) VIII, Lnes 6, column (6) VIII, Lnes 7, column (6) VIII, Lnes 8, column (6) VIII, Lnes 9, column (6) VIII, Lnes 10, column (6) VIII, Lnes 11, column (6) VIII, Lnes Statement Source These Rules Nar3 lnes 1, column (7) Lnes 2, column (7) Lnes 3, column (7) Lnes 4, column (7) Lnes 5, column (7) Lnes 6, column (7) Lnes 7, column (7) Lnes 8, column (7) Lnes 9, column (7) Lnes 10, column (7) Lnes 11, column (7) Lnes 12, 19

20 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Guaranteed mnmum accumulaton beneft wth more than 7 years but less than or equal to 8 years to maturty Guaranteed mnmum accumulaton beneft wth more than 8 years but less than or equal to 9 years to maturty Guaranteed mnmum accumulaton beneft wth more than 9 years to maturty Varable Annuty Beneft Type 27, column (2) 27, column (3) 27, column (4) 12, column (5) Lnes 13 and 28, column (2) Lnes 14 and 29, column (2) Lnes 15 and 30, column (2) Table 13A aptal charge factors for Lnes 13 and 28, column (3) Lnes 14 and 29, column (3) Lnes 15 and 30, column (3) Lnes 13 and 28, column (4) Lnes 14 and 29, column (4) Lnes 15 and 30, column (4) 1 aptal harge 1, 2, 3, 4, 5, 6 aptal harge 2 VIII, Lnes 13, column (5) VIII, Lnes 14, column (5) VIII, Lnes 15, column (5) aptal harge 3 12, column (6) VIII, Lnes 13, column (6) aptal harge 4 VIII, Lnes 14, column (6) VIII, Lnes 15, column (6) aptal harge 5 column (7) Lnes 13, column (7) Lnes 14, column (7) Lnes 15, column (7) Guaranteed mnmum death beneft: Return of premum, ratchet and reset 0.25% 0.50% 0.75% 4.00% 8.50% 13.00% Guaranteed mnmum death beneft: Enhanced benefts (roll up) 0.75% 1.00% 1.25% 12.00% 16.50% 21.00% Guaranteed mnmum ncome beneft 5.00% 6.50% 8.00% % % % Guaranteed mnmum wthdrawal beneft 3.25% 4.25% 5.00% 60.00% 75.00% 90.00% Guaranteed enhanced earnngs beneft 0.00% 0.50% 1.00% 1.00% 9.00% 17.00% Guaranteed mnmum accumulaton beneft wth 1 year or less to maturty 3.20% 5.00% 9.00% 90.00% % % Guaranteed mnmum accumulaton beneft wth more than 1 year but less than or equal to 2 years to maturty 3.00% 5.00% 8.90% 80.00% % % Guaranteed mnmum accumulaton beneft wth more than 2 years but less than or equal to 3 years to maturty Guaranteed mnmum accumulaton beneft wth more than 3 years but less than or equal to 4 years to maturty Guaranteed mnmum accumulaton beneft wth more than 4 years but less than or equal to 5 years to maturty Guaranteed mnmum accumulaton beneft wth more than 5 years but less than or equal to 6 years to maturty Guaranteed mnmum accumulaton beneft wth more than 6 years but less than or equal to 7 years to maturty aptal harge % 5.00% 8.90% 70.00% % % 2.80% 5.00% 8.80% 60.00% 95.00% % 2.40% 4.30% 8.00% 55.00% 85.00% % 2.00% 3.50% 6.80% 50.00% 75.00% % 1.70% 2.80% 5.90% 45.00% 65.00% 90.00% Guaranteed mnmum accumulaton beneft wth more than 7 years but less than or equal to 8 years to maturty 1.40% 2.10% 4.90% 40.00% 55.00% 80.00% Guaranteed mnmum accumulaton beneft wth more than 8 years but less than or equal to 9 years to maturty 1.10% 1.70% 4.30% 35.00% 50.00% 70.00% Guaranteed mnmum accumulaton beneft wth more than 9 years to maturty 1.00% 1.40% 3.90% 30.00% 45.00% 60.00% 20

21 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES The long-term other nsurance rsk captal calculaton shall be establshed n accordance wth the followng formula NetBAR Where: LTotherrsk BAR 1 BSR adjusted reserves BAR = captal charge factor as prescrbed n Table 14A; and = the BSR adjusted reserves as descrbed n Table 14A. Table 14A aptal charge factors for Statement Source These Rules BAR aptal Factor Mortalty (term nsurance, whole lfe, unversal lfe) VII, olumn (7), Lne 1 2.0% rtcal llness (ncludng accelerated crtcal llness VII, olumn (7), Lne 2 2.0% products) Longevty (mmedate payout annutes, contngent VII, olumn (7), Lne 3(f) 0.5% annutes, penson pay-outs) Longevty (deferred pay-out annutes, future contngent annutes, future penson VII, olumn (7), Lne 4(g) 0.5% pay- outs) Annutes certan only VII, olumn (7), Lne 5 0.5% Deferred accumulaton annutes VII, olumn (7), Lne 6 0.5% Dsablty ncome: actve lves ncludng waver of premum and long-term VII, olumn (7), Lne 7(d) 2.0% care Dsablty ncome: actve lves other accdent and VII, olumn (7), Lne 8 2.0% sckness Dsablty ncome: clams n payment ncludng waver of premum and long-term VII, olumn (7), Lne 9 0.5% care Dsablty ncome: clams n payment other accdent VII, olumn (7), Lne % and sckness Group lfe VII, olumn (7), Lne % Group dsablty VII, olumn (7), Lne % Group health VII, olumn (7), Lne % Stop loss VII, olumn (7), Lne % Rder (other product rders not ncluded above) VII, olumn (7), Lne % 31. The operatonal rsk charge calculaton shall be establshed n accordance wth the followng formula: operatonal Aov where 21

22 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 Aov = an amount between 2% and 20% as determned by the Authorty n accordance wth Table 30; and = BSR after ovarance amount or an amount prescrbed by the Authorty. Table 15G Operatonal Rsk harge for Overall Score Applcable Operatonal Rsk harge <= % >5200 <= % >6000 <= % >6650 <= % >7250 <= % >7650 <= % >7850 <= % >8050 <= % >8250 <= % > % INSTRUTIONS AFFETING TABLE 15G In ths table, overall score means an amount equal to the sum of the aggregate score derved from each of tables 15H, 15I, 15J, 15K, 15L, and 15M. TABLE 15H orporate Governance Score Table rteron Implemented Score Board sets rsk polces, practces and tolerance lmts for all materal foreseeable operatonal rsks at least annually and 200 ensures they are communcated to relevant busness unts Board montors adherence to operatonal rsk tolerance lmts more regularly than annually 200 Board receves, at least annually, reports on the effectveness of materal operatonal rsk nternal controls as well as 200 management s plans to address related weaknesses Board ensures that systems or procedures, or both, are n place to dentfy, report and promptly address nternal 200 control defcences related to operatonal rsks Board promotes full, open and tmely dsclosure from senor management on all sgnfcant ssues related to operatonal 200 rsk Board ensures that perodc ndependent revews of the rsk management functon are performed and receves the 200 fndngs of the revew Total XX omments INSTRUTIONS AFFETING TABLE 15H The total score s derved by addng the score for each crteron of an nsurer s corporate structure that the nsurer has mplemented. 22

23 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 TABLE 15I Rsk Management Functon ( RMF ) Score Table rteron Implemented Score RMF s ndependent of other operatonal unts and has drect access to the Board of Drectors 150 RMF s entrenched n strategc plannng, decson makng and the budgetng process 150 RMF ensures that the rsk management procedures and polces are well documented and approved by the Board of 150 Drectors RMF ensures that the rsk management polces and procedures are communcated throughout the organzaton 150 RMF ensures that operatonal rsk management processes and procedures are revewed at least annually 150 RMF ensures that loss events arsng from operatonal rsks are documented and loss event data s ntegrated nto the 150 rsk management strategy RMF ensures that rsk management recommendatons are documented for operatonal unts, ensures that defcences have remedal plans and that progress on the executon of 150 such plans are reported to the Board of Drectors at least annually Total XX omments INSTRUTIONS AFFETING TABLE 15I The total score s derved by addng the score for each crteron of an nsurer s rsk management functon that the nsurer has mplemented. 23

24 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 TABLE 15J Rsk Identfcaton Processes ( RIP ) Score Table Progresson rteron Operatonal Rsk Areas Stage Scorng Fraud HR Outsourcng 1 50 RIP are ad hoc Dstrbuton hannels Busness Processes Busness ontnuty IT omplance RIP have been mplemented but not standardzed across the organzaton RIP have been mplemented, well documented and understood by relevant staff, and standardzed across the entre organzaton In addton to Stage 3, RIP are revewed at least annually wth the vew to assessng effectveness and ntroducng mprovements Total XX XX XX XX XX XX XX XX omments INSTRUTIONS AFFETING TABLE 15J (a) the total score s derved by addng the ndvdual score for each operatonal rsk area correspondng to the stage of the nsurer s mplementaton n respect of ts RIP; (b) where the nsurer s assessment of the operatonal rsk area s between stages (.e. exceeds the crteron for each gven stage, whle only partally meetng the crteron of the next stage), the nsurer shall be deemed to have met the crteron of the lower stage; and (c) where an operatonal rsk area s not applcable to the nsurer s operatons, the nsurer shall record such fact and the reasons for arrvng at ths concluson n the comments secton and be deemed to have met the crteron of the hghest stage. 24

25 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 TABLE 15K Rsk Measurement Processes ( RMP ) Score Table Progresson rteron Operatonal Rsk Areas Stage Scorng Fraud HR Outsourcng 1 50 RMP are ad hoc Dstrbuton hannels Busness Processes Busness ontnuty IT omplance RMP have been mplemented but not standardzed across the organzaton RMP have been mplemented, well documented and understood by relevant staff, and standardzed across the entre organzaton In addton to Stage 3, RMP are revewed at least annually wth the vew to assessng effectveness and ntroducng mprovements Total XX XX XX XX XX XX XX XX omments INSTRUTIONS AFFETING TABLE 15K (a) the total score s derved by addng the ndvdual score for each operatonal rsk area correspondng to the stage of the nsurer s mplementaton n respect of ts RMP; (b) where the nsurer s assessment of the operatonal rsk area s between stages (.e. exceeds the crteron for each gven stage, whle only partally meetng the crteron of the next stage), the nsurer shall be deemed to have met the crteron of the lower stage; and (c) where an operatonal rsk area s not applcable to the nsurer s operatons, the nsurer shall record such fact and the reasons for arrvng at ths concluson n the comments secton and be deemed to have met the crteron of the hghest stage. 25

26 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 TABLE 15L Rsk Response Processes ( RRP ) Score Table Progresson rteron Operatonal Rsk Areas Stage Scorng Fraud HR Outsourcng 1 50 RRP are ad hoc Dstrbuton hannels Busness Processes Busness ontnuty IT omplance RRP have been mplemented but not standardzed across the organzaton RRP have been mplemented, well documented and understood by relevant staff, and standardzed across the entre organzaton In addton to Stage 3, RRP are revewed at least annually wth the vew to assessng effectveness and ntroducng mprovements Total XX XX XX XX XX XX XX XX omments INSTRUTIONS AFFETING TABLE 15L (a) the total score s derved by addng the ndvdual score for each operatonal rsk area correspondng to the stage of the nsurer s mplementaton n respect of ts RRP; (b) where the nsurer s assessment of the operatonal rsk area s between stages (.e. exceeds the crteron for each gven stage, whle only partally meetng the crteron of the next stage), the nsurer shall be deemed to have met the crteron of the lower stage; and (c) where an operatonal rsk area s not applcable to the nsurer s operatons, the nsurer shall record such fact and the reasons for arrvng at ths concluson n the comments secton and be deemed to have met the crteron of the hghest stage. 26

27 INSURANE (PRUDENTIAL STANDARDS) (LASS, LASS D and LASS E SOLVENY REQUIREMENT) AMENDMENT RULES 2018 TABLE 15M Rsk Montorng and Reportng Processes ( RMRP ) Score Table Progresson rteron Operatonal Rsk Areas Stage Scorng Fraud HR Outsourcng 1 50 RMRP are ad hoc Dstrbuton hannels Busness Processes Busness ontnuty IT omplance RMRP have been mplemented but not standardzed across the organzaton RMRP have been mplemented, well documented and understood by relevant staff, and standardzed across the entre organzaton In addton to Stage 3, RMRP are revewed at least annually wth the vew to assessng effectveness and ntroducng mprovements Total XX XX XX XX XX XX XX XX omments INSTRUTIONS AFFETING TABLE 15M (a) the total score s derved by addng the ndvdual score for each operatonal rsk area correspondng to the stage of the nsurer s mplementaton n respect of ts RMRP; (b) where the nsurer s assessment of the operatonal rsk area s between stages (.e. exceeds the crteron for each gven stage, whle only partally meetng the crteron of the next stage), the nsurer shall be deemed to have met the crteron of the lower stage; and (c) where an operatonal rsk area s not applcable to the nsurer s operatons, the nsurer shall record such fact and the reasons for arrvng at ths concluson n the comments secton and be deemed to have met the crteron of the hghest stage. 32. The regulatory captal requrement for regulated non-nsurance fnancal operatng enttes shall be determned n accordance wth XVI - of Regulated Non-Insurance Fnancal Operatng Enttes. Ths amount shall be equal to the sum of the nsurer s proportonate share of each entty s regulatory captal requrement n accordance wth the applcable solvency laws of the jursdcton where the entty s lcensed or regstered.- 27