|
In this paper, following the method in the QIS 5 of Solvency II to calculate the risk capital requirement, I consider the impact of changes in mortality and morbidity to solvency capital. First, I adopt mortality relational model in Chan, Tsai, and Tsai (2013) to forecast both mortality and morbidity rate. Furthermore, I calculate the risk capital of two representative health insurance policies. The quantitative results show that under standard approach the risk capital factor decreases with the insured’s age; the risk capital factor for policies issued to females is slightly higher than to males; and the risk capital factor is also related to interest rate. The findings can be used in the risk-based capital system reform for reference in Taiwan.
|