Entire Section

  • PIN 2.2 PIN 2.2 Risk management

    • PIN 2.2.1

      An Insurer's risk management systems must:

      (a) be appropriate to the size, business mix and complexity of the Insurer's operations;
      (b) address all material risks, financial and non-financial, to which the Insurer is likely to be exposed;
      (c) describe the relationships between the Insurer's risk tolerance limits, its capital requirements, economic capital and the processes and methods for monitoring risk; and
      (d) be supported by adequate risk management policies and procedures which explain the risks covered, the measurement approaches used, and the key assumptions made.
      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
      [Amended] DFSA RM99/2012 (Made 24th July 2012) [VER12/07-12]

    • PIN 2.2.2

      The risk management systems maintained by an Insurer must include:

      (a) a written risk management strategy approved by senior management, which in the opinion of senior management addresses all material risks to which the Insurer is likely to be exposed;
      (b) risk management policies and procedures that in the opinion of senior management are adequate to identify, assess, mitigate, control, monitor and report on the material risks to which the Insurer is exposed; and
      (c) clearly identified managerial responsibilities and controls, designed to ensure that the policies and procedures established for risk management are adhered to at all times.

      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.2.3

      Subject to PIN Rule 2.2.4, where an Insurer is a member of a Group, the Insurer must take reasonable actions to ensure that the Group as a whole complies with the requirements of PIN Rule 2.2.1 and PIN Rule 2.2.2 as though the Group as a whole were an Insurer.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.2.4 PIN 2.2.4

      PIN Rule 2.2.3 does not apply in respect of a Group where the Insurer is not the Holding Company and where the Holding Company of the Group is:

      (a) another Insurer; or
      (b) a Subsidiary of another Holding Company.
      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

      • PIN 2.2.4 Guidance

        1. The effect of PIN Rule 2.2.4 is to avoid duplication arising from complex Group structures. If an Insurer is a member of a Group whose Holding Company is another Insurer, the first Insurer need not apply PIN Rule 2.2.3 in respect of that Group, because the Insurer that is the Holding Company is al required to apply that Rule. Where an Insurer is a member of two or more Groups that are also sub-groups of a single Group, the Insurer may consider that single group as a whole for the purposes of this section. An Insurer that is a Holding Company is however still required to apply PIN Rule 2.2.3 in respect of any Group of which the Insurer is the Holding Company.
        2. An Insurer should describe how its risk tolerance limits described in PIN Rule 2.2.1(c) link with its corporate objectives, business strategy and current circumstances. An Insurer is expected to embed its risk tolerance limits into its day-to-day operations and its risk management policies and procedures.
        Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended] DFSA RM99/2012 (Made 24th July 2012) [VER12/07-12]