1. The Company shall have access to sufficient liquidity to meet all cash outflow commitments to policyholders (and other creditors) as and when they fall due.
2. The risk management system for liquidity risk will normally include at least the following:
    
   1. Procedures to identify and control the level of mismatch between expected asset and liability cash flows under normal and stressed operating conditions (using realistic scenarios relevant to the circumstances of the Company);
   2. Procedures to monitor the liquidity of assets;
   3. Procedures to identify and monitor commitments to meet liabilities including Insurance liabilities;
   4. Procedures to monitor the uncertainty of incidence, timing and magnitude of Insurance liabilities;
   5. Procedures to identify and monitor the level of liquid assets held by the Company; and
   6. Procedures to identify and monitor other sources of funding including reinsurance, borrowing capacity, lines of credit and the availability of intragroup funding, and to identify the need for such sources to be made available.
       
3. When assessing its liquidity requirements the Company shall also consider the currency in which the assets and liabilities are denominated, and the locations in which those assets and liabilities are situated or payable.
    
4. For the purposes of determining the adequacy of its overall financial resources, the Company must carry out appropriate stress testing and scenario analysis, including taking reasonable steps to identify an appropriate range of realistic adverse circumstances and events in which liquidity risk might occur or crystallize.
    
5. The choice of scenarios that the Company uses will depend on the nature of its activities. For the purposes of testing liquidity risk, however, the Company shall normally consider scenarios based on varying degrees of stress and both Company-specific and market-wide difficulties.
    
6. The Company shall review frequently the assumptions used in stress testing scenarios to gain assurance that they continue to be relevant.
    

Credit Risk

The Company faces Credit risk whenever it is exposed to loss if another party fails to perform its financial obligations to the Company, including failing to perform them in a timely manner. This also includes the impact on investments of credit rating downgrades and widening of credit spreads. Credit exposures can increase the risk profile of a Company and adversely affect financial viability. Credit exposure includes both on-balance sheet and off-balance sheet exposures (including guarantees, derivative financial instruments and performance related obligations) to single and related counterparties.

The risk management system for credit risk will normally include at least the following:

1. Credit Risk Limits (at the minimum as defined in Article (3) for credit exposures to:
   1. Single counterparties and groups of related counterparties;
   2. Entities to which the Company is related;
   3. Single industries; and
   4. Single geographic locations.
       
2. Processes to monitor and control credit exposures against pre-approved limits.
    
3. Processes for identifying breaches of limits and for ensuring that breaches of limits are brought within the pre-approved limits within a set timeframe.
    
4. Processes for reducing or cancelling limits to a particular counterparty where the counterparty is known to be experiencing problems.
    
5. Processes for approving requests for temporary increases in limits.
    
6. Processes to review credit risk exposures (at least annually but more frequently in cases where there is evidence of deterioration in credit quality).
    
7. A management information system that is capable of aggregating exposures to any one counterparty (or group of Related counterparties), asset class, industry or region in a timely manner.
    
8. A process for reporting to the Board of Directors and senior management:
    
   1. Significant breaches of limits; and
   2. Large exposures and other credit risk concentrations.
       

1. Market risk includes equity risk, foreign exchange (FX) risk, commodity risk and interest rate risk.
    
2. The risk management system for market risk will normally include at least the following:
    
   1. Procedures to document its policy for market risk, including its risk appetite and how it identifies, measures, monitors and controls that risk;
       
   2. Procedures to document its asset and liability recognition policy. Documentation shall describe the systems and controls that it intends to use to comply with the policy; and
       
   3. Procedures to establish and maintain risk management systems to identify, measure, monitor and control market risk (in accordance with its market risk policy), and to take reasonable steps to establish systems adequate for that purpose.