ICAR… Just think if you have substantial exposure to fronting and relying on one or two reinsurers to take care of the very sizeable placement. Also think what if these two or three reinsurers failed you, what would be your damage (in term of TCA:TCR) if it is true a very sizeable claim comes true. Even if you do not think in this manner, the BNM would be thinking for you…. they would just request you to add this lob-side transaction as part of your ICAR computation, ie. BNM would add 50% to the SCAR of 130% – you would get 180%! It would be difficult …as you need to achieve a computation of > 180%!
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