In the NAIC model for life insurance companies, this risk measures the liquidity of liabilities for given rate changes.

Question

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Interest rate risk is the risk that changes in interest rates will negatively affect a life insurance company's cash flow and the value of its assets and liabilities. The NAIC model for life insurance companies measures the liquidity of liabilities for given rate changes, which is a key aspect of interest rate risk. The other options (B) Business risk, (C) Asset risk, (D) Foreign exchange risk, and (E) Insurance risk are all different types of risks that are not specifically related to measuring the liquidity of liabilities for rate changes.

In the NAIC Model for Life Insurance Companies, This Risk