Entire Section

  • PIN 5.5 PIN 5.5 Discount rates

    • PIN 5.5.1

      The DFSA may specify actuarial principles to be used by an Insurer in measuring assets and liabilities.


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

    • PIN 5.5.2

      For the purposes of determining the net present value of expected future payments in accordance with PIN Rule 5.4.10, an Insurer must use as a discount rate the gross redemption yield, as at the Solvency Reference Date, of a portfolio of AAA-Rated sovereign risk securities with a similar expected payment profile to the liability being measured.


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

    • PIN 5.5.3 PIN 5.5.3

      For the purposes of determining the net present value of expected future receipts in accordance with PIN Rule 5.4.11, an Insurer must use as a discount rate the gross redemption yield, as at the Solvency Reference Date, of a portfolio of AAA-Rated sovereign risk securities with a similar expected payment profile to the asset being measured.

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

      • PIN 5.5.3 Guidance

        1. Where an Insurer's Insurance Business includes more than one Class of Business, the Insurer will normally be expected to establish payment profiles separately for each material Class of Business.
        2. Where the expected payment profile of assets or liabilities cannot be matched — for example, because the duration is too long — the Insurer should assume a discount rate regarded as consistent with the intention of this section.

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