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CS Professional · IFSCA - Regulations, Listing and Compliances · Insurance and Reinsurance

An IFSC Insurance Office (IIO) in GIFT City reports available solvency margin of Rs 90 crore against a required solvency margin of Rs 60 crore. Assuming the supervisory minimum solvency ratio is 150%, what is its position?

The solvency ratio is available margin divided by required margin, so 90 divided by 60 gives 150%. That equals the assumed minimum of 150%, so the IIO just meets the requirement. Inverting the fraction or using the difference would give wrong results.

  1. ARatio of 150%, which just meets the minimumCorrect
  2. BRatio of 66.7%, which is below the minimum
  3. CRatio of 30%, which is below the minimum
  4. DRatio of 250%, which comfortably exceeds the minimum

Explanation

Solvency ratio = available solvency margin / required solvency margin = 90/60 = 1.5, or 150%. This equals the stated minimum, so the IIO complies. The 66.7% option inverts the fraction, and 30% uses the difference rather than a ratio.

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