What is collateral eligible for investment in premium reserve fund in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: collateral eligible for investment in premium reserve fund

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Collateral that is assigned to those parts of the financial assets that meet legal, quality and quantity criteria stipulated in insurance company law, enabling them to be included in the premium reserve fund. The premium reserve fund is a special category of asset that is used to cover claims made by policy holders that have to settled immediately.

Smart SAP Assistant

• Key Concepts: 
  Collateral eligible for investment in premium reserve fund is a component of the Credit Risk Management module in SAP Financial Services. This component allows users to manage the risk of credit losses by investing in a premium reserve fund. The fund is made up of collateral that has been identified as eligible for investment. 
  
  How to use it: 
  The Credit Risk Management module allows users to identify and manage the risk of credit losses by investing in a premium reserve fund. The collateral eligible for investment in the fund is determined by the user. The user can select from a variety of assets, such as cash, securities, and other financial instruments. Once the collateral has been identified, it can be invested in the fund. 
  
  Tips & Tricks: 
  When selecting collateral for investment in the premium reserve fund, it is important to consider the risk associated with each asset. Different assets have different levels of risk, so it is important to select assets that are appropriate for the level of risk that you are willing to take on. Additionally, it is important to monitor the performance of the fund over time to ensure that it is meeting your expectations. 
  
  Related Information: 
  The Credit Risk Management module also includes other components such as credit limit management and credit scoring. Additionally, there are other modules within SAP Financial Services that can be used to manage credit risk, such as Accounts Receivable and Accounts Payable. It is important to understand how these modules interact with each other in order to effectively manage credit risk.