Entire Section

  • PIN 5.4 PIN 5.4 Recognition and measurement of insurance assets and liabilities in respect of general insurance

    • PIN 5.4.1

      This section applies to assets and liabilities in respect of General Insurance contracts.


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

    • PIN 5.4.2

      Premiums in respect of direct insurance contracts, facultative reinsurance contracts and non-proportional treaty reinsurance contracts entered into by an Insurer as insurer must be treated as receivable from the date of entering into the insurance contract.


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

    • PIN 5.4.3

      Premiums in respect of proportional treaty reinsurance contracts entered into by an Insurer as insurer must be treated as receivable in accordance with the pattern of the cedant entering into the underlying insurance contracts.


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

    • PIN 5.4.4

      Premiums in respect of facultative reinsurance contracts and non-proportional treaty contracts entered into by an Insurer as cedant must be treated as payable from the date of entering into the reinsurance contract.


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

    • PIN 5.4.5

      Premiums in respect of proportional treaty reinsurance contracts entered into by an Insurer as cedant must be treated as payable in accordance with the pattern of effecting the underlying insurance contracts.


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

    • PIN 5.4.6

      Expenses incurred in respect of insurance contracts effected by an Insurer must be treated as payable at the time the contracts are effected.


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

    • PIN 5.4.7 PIN 5.4.7

      An Insurer must treat as a liability, the premium liability, which is the value of future claim payments and associated direct and indirect settlement costs, arising from future events insured under policies that are in force as at the Solvency Reference Date.

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

      • PIN 5.4.7 Guidance

        The liability referred to in PIN Rule 5.4.7 is commonly represented by insurers as two separate provisions, the unearned premium provision and the premium deficiency provision. The sum of the two provisions is sometimes referred to as the unexpired risk reserve, though this term is also sometimes used to describe the premium deficiency provision alone.


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

    • PIN 5.4.8 PIN 5.4.8

      An Insurer must treat as a liability the value of future claims payments and associated direct and indirect settlement costs, arising from insured events that have occurred as at the Solvency Reference Date.

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

      • PIN 5.4.8 Guidance

        The liability referred to in PIN Rule 5.4.8 is commonly referred to as the liability for outstanding claims. Some insurers represent this liability as three separate provisions, being the liability in respect of reported claims, the liability in respect of claims incurred but not reported, and the liability in respect of settlement costs, also known as loss adjustment expenses.


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

    • PIN 5.4.9

      An Insurer must treat as an asset the value of reinsurance and other recoveries expected to be received in respect of claims referred to in Rules PIN 5.4.7 and PIN 5.4.8.


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

    • PIN 5.4.10

      Where this section requires an Insurer to recognise as a liability the value of expected future payments, that liability must be measured as the net present value of those expected future payments.


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

    • PIN 5.4.11

      Where this section requires an Insurer to recognise as an asset the value of expected future receipts, that asset must be measured as the net present value of those expected future receipts.


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

    • PIN 5.4.12 PIN 5.4.12

      Rules PIN 5.4.10 and PIN 5.4.11 do not require an Insurer to obtain a valuation by an Actuary of the assets and liabilities referred to in those Rules, at a Solvency Reference Date other than the Insurer's annual reporting date.

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

      • PIN 5.4.12 Guidance

        An Insurer is also required to provide a periodic report on its General Insurance Liabilities and associated assets, prepared by an Actuary. The relevant provisions are contained in PIN chapter 7.


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