Other

I submitted the following question on 7/10/2019. Can you confirm it is not yet answered? When can I expect an answer?Some clients make use of cash flow models which produce monthly cash flows. In these models the morbidity/disability/recovery rates are of monthly basis instead of yearly base.Are the shocks defined for disability/morbidity/recovery as in article 139 are meant for yearly rates or should be also applied to monthly rates?Example: recovery rate for coming 12 months is 25% on yearly basis. Applying the article leads to 25%*(1-0,2)=20% after stress on yearly basis.If the recovery rate is recalculated to monthly basis, say 1-(1-25%)^(1/12)=2,37% then is my question whether one should apply the shock 0,8% to 2,37% for the coming months and find 2,37%*0,8= 1,90% or should use the calculated recovery rate on yearly basis after stress 20% and then transform this one to a monthly rate by the formula 1-(1-20%)^(1/12)=1,84% and this becomes the monthly recovery rate after stress.For some rates the impact on the liability can be material.

Disability shock for Health SLT (article 139)