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With Profits Insurance Capital Component
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Background
WPICC is calculated for firms falling witin scope of the ECR, enhanced capital requirement ( these are life firms with aggregate with-profits liabilities in excess of £500 million).
The purpose of the WPICC is to ensure that these firms hold sufficient financial resources for their with profits business plus provision for final bonuses.
The amount is determined using the Twin Peaks calculation applied to each of a firms with-profits funds, which looks at,
1. mathematical reserves, plus LTICR plus the resilience capital requirement (in total the regulatory peak)
2. the realistic value of contractual and constructive liabilities plus a risk capital margin (the 'realistic peak')
The WPICC can be calculated using the results of calculating the other components, which are Mathematical Reserves, Resilience Capital Requirement, LTICR Long Term Insurance Capital Component.
Please use the sub sections links on the left or the content links to find out more about With Profits Insurance Capital Component.