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Crossing Thin Ice

Moderately Adverse Conditions

13 Feb 2023

Description

We have generally used a continuation of the current environment as our base assumption. But now, with the encouragement of the NY DFS, that is being treated as worse than “Moderately Adverse” scenario. Insurers need to develop a robust set of stress scenarios to test reserve adequacy that include continuation of current conditions and a variety of variations in experience, not just interest rates.

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