The Geneva Papers on Risk and Insurance Issues and Practice

TABLE 7

FROM:

Insurers are not Banks: Assessing Liquidity, Efficiency and Solvency Risk Under Alternative Approaches to Capital Adequacy

Paul Kupiec and David Nickerson

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Table 7. Regulatory liability limits for representative insurer

Figure and tables index
Aggregate production event States of nature Maximum value of contingent contract financing per loan
3001, 7 Min[loan par value, 1.5]
6502, 6 Min[loan par value, 4]
8503, 5 Min[loan par value, 5]
10004 Min[loan par value, 10]

 Regulatory maximum liability funding schedule for a representative insurer or reinsurer for each project loan, under risk-neutral distribution of state-contingent production across all firms.

Figure and tables index
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