Entire Section

  • PIN A6.2 PIN A6.2 Minimum segmental capital requirement

    • PIN A6.2.1

      Every Insurer must calculate its Minimum Non-Cellular Capital Requirement and the Minimum Cellular Capital Requirement applicable to each Cell, in accordance with this appendix.


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

    • PIN A6.2.2 PIN A6.2.2

      Subject to Rules PIN A6.2.4, PIN A6.2.5, and PIN A6.2.6, an Insurer must calculate its Minimum Segmental Capital Requirement according to the following applicable formula:

      (a) for an Insurer, other than a Captive Insurer: MCR = DRC + IVRC + OARC + OLRC + CRC + SFAC + URC + RRC + LIRC + AMRC;
      (b) for a Class 1 Captive Insurer: MCR = higher of URC and RRC; and
      (c) for a Class 2 and Class 3 Captive Insurer: MCR = DRC + IVRC + URC + RRC;

      where:

      Term Definition
      MSCR Insurer's Minimum Segmental Capital Requirement;
      DRC Insurer's default risk component in respect of that segment;
      IVRC Insurer's investment volatility risk component in respect of that segment;
      OARC Insurer's off-balance sheet asset risk component in respect of that segment;
      OLRC Insurer's off-balance sheet liability risk component in respect of that segment;
      CRC Insurer's concentration risk component in respect of that segment;
      SFAC Insurer's size factor adjustment component in respect of that segment;
      URC Insurer's underwriting risk component in respect of that segment;
      RRC Insurer's reserving risk component in respect of that segment;
      LIRC Insurer's Long-Term Insurance risk component in respect of that segment;
      AMRC Insurer's asset management risk component in respect of that segment.
      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
      [Added] DFSA RMI296/2021 (Made 24th February 2021). [VER17/04-21]

      • PIN A6.2.2 Guidance

        Because of the provision in PIN chapter 1 that all Insurance Business of an Insurer that is a Protected Cell Company must be conducted through its Cells, the URC, RRC and LIRC components will apply only to Cells.


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

    • PIN A6.2.3

      The methods of calculation of the components referred to in PIN Rule A6.2.2 are set out in sections PIN A6.4, PIN A6.5, PIN A6.6, PIN A6.7, PIN A6.8, PIN A6.9, PIN A6.10, PIN A6.11, PIN A6.12 and PIN A6.13.


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

    • PIN A6.2.4

      An Insurer's Minimum Non-Cellular Capital Requirement must always be equal to or higher than US$ 50,000.


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

    • PIN A6.2.5

      The Minimum Cellular Capital Requirement in respect of a Cell must always be equal to or higher than US$ 50,000.


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

    • PIN A6.2.6

      Where the aggregate of the Minimum Segmental Capital Requirements of the segments of an Insurer, calculated in accordance with the formula set out in PIN Rule A6.2.2 is less than US$ 250,000, the difference between that aggregate and US$ 250,000 must be added to the Minimum Non-Cellular Capital Requirement.


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