1. Attachment 1BusinessModelParadigmforInsuranceContracts InsuranceContractAttributes Keybusinessmetricunderwriting Keybusinessmetricsinterest,expense,surrender& incomeorloss mortality/morbidityprofits KeybusinessdriversPremium Keybusinessdriversinvestmentresults,mortality&lapse charged/earned&claimsincurredexperience o Premiumstypicallysingleandfixedo Discretionarypremiumsmaycontinueovercoverage o Claimstypicallyemergequickly;latent period;exposuresnotsubjecttoreliable o Netinvestmentincomemaybeearnedoncontractholderestimation funds; $amountofinsuranceriskvariableuptoo Claimsoccurlongerafterissueunanticipatedexposures policylimitsareatypical; Risksreunderwritten&repricedo Policyterminateswhencoveredriskeventoccurs annuallyormorefrequentlydueto $amountofmortality/morbidityinsurancecoverage dynamicsofunderlyingrisks;specifiedinthecontract Contractsarecancellablewitharefund,or Risksnotreunderwrittenorrepricedannuallyormore adjustforcertainchangesinexposure frequently;risksarenotreunderwrittenduringterm duringthecontractperiod Primaryperformancemetrics Primaryperformancemetricso Premiums o Written&EarnedPremiumso ReturnonInvestment o Claims&ClaimsExpenseo Mortality/MorbidityResults o OperatingExpenses o OperatingIncome o UnderwritingIncomeorLoss Importantperformanceanalyticaltools Primaryperformanceanalyticaltoolo MarginanalysisforInvestments,MortalityandMorbidity o Claimdevelopmenttableo ActualtoExpectedExperience UnderwritingAssetLiability BusinessModel Note BusinessModel ApplyUBMformeasurement& Applybuildingblockapproach reporting:asproposedbyInterested UndiscountedUPRinPreclaim PartiesGroup period Postclaimreservesno discountingorriskmargins Continuousremeasurementof postclaimreserves Requirelossdevelopmenttable Note NotwithstandingtheexistenceofthetraditionalUBMutilizedthroughoutmostoftheworldforpropertycasualtyinsurance contracts, several countries utilize both discounting and explicit risk adjustments in the measurement and presentation of theirpropertycasualtyinsurancecontracts.Consistentwithabeliefthatnoinsurancereportingentityshouldberequiredto measureandpresenttheirbusinessandbusinessresultsinamannerinconsistentwithhowtheyunderwrite,manage,and evaluate performance, these companies and their respective countries should be allowed to measure and present their insurancebusinessondiscountedbasisandincorporatingriskadjustmentsconsistentwiththeirbusinessmodel. See Measurement and Presentation of Insurance Contracts Based on the Insurers Business Model for more informationontheUBM