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  • PFN PIN 6.10 PFN PIN 6.10 Form 6: Statement of movements in insurance provisions

    • PFN PIN 6.10.1

      This form is required for each reporting unit in respect of which the Insurer prepares an Annual Regulatory Return, or a part of an Annual Regulatory Return, in respect of General Insurance Business.

      Guidance

      1. A Global Return is prevented by COB from carrying on Insurance Business other than through a Cell. Because this form would always be blank for such a company in its Global Return, and it is exempted from the requirement to complete other forms relating to General Insurance Business, there is no need for it to submit the form, or to complete a Supplementary Note to explain its absence.
      2. A Global Return of an Insurer that does not carry on General Insurance Business, or a Cell Return, Fund Return or DIFC Business Return of such an Insurer, also omits this form, without the need for a Supplementary Note to explain its absence. However, if an Insurer that carries on Long-Term Insurance Business together with Class 1 or Class 2 General Insurance Business elects to report that Class 1 or Class 2 business as General Insurance Business for the purposes of form 4 or form 5, it must also complete this form in respect of that business.

      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]

    • PFN PIN 6.10.2

      An Insurer must record separately, in parts I to IV and parts V to VIII respectively of this form, the information required in respect of claims outstanding (including IBNR) gross of reinsurance and other recoveries, and reinsurance and other recoveries in respect of those claims outstanding. This information must be presented for each Class of Business.

      Guidance

      Reinsurance recoveries must be analysed between parts V to VIII on the basis of the underlying insurance contracts that they relate to, not on the basis of the reinsurance contracts themselves. Where the nature of the reinsurance contract is such that the Insurer cannot identify individual claims benefiting from the recoveries (for example, in the case of an aggregate excess of loss contract, or a stop loss contract) the Insurer must make a reasonable allocation of the recoveries across the types and Classes of Business that have benefit of the reinsurance contracts.


      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]

    • PFN PIN 6.10.3

      Parts I, II, III and IV must be prepared on the following basis:

      (a) At column 1 in each part, the Insurer must record the amount of claims outstanding (including IBNR), at the end of the reporting period and in respect of claims incurred during the reporting period;
      (b) At column 2 in each part, the Insurer must record the amount of claims outstanding (including IBNR), at the beginning of the reporting period and in respect of claims incurred during the previous reporting period;
      (c) At column 3 in each part, the Insurer must record the amount of the movement during the reporting period in the provision for claims outstanding (including IBNR), in respect of claims incurred during the previous reporting period, that arises from those claims being one year closer to settlement;

      Guidance

      PIN chapter 5 requires an Insurer to record its Insurance Liabilities on a discounted basis. A liability for an outstanding claim increases between the beginning and end of a reporting period, because the amount of discount applied at the later is less. The expense represented by this increase is referred to in the form as release of discount.

      (d) At column 4 in each part, the Insurer must record the amount of claims paid during the reporting period, in respect of claims incurred during the previous reporting period;
      (e) At column 5 in each part, the Insurer must record the amount of other movements in the provision for claims outstanding (including IBNR), in respect of claims incurred during the previous reporting period;
      (f) At column 7 in each part, the Insurer must record the amount of claims outstanding (including IBNR), at the beginning of the reporting period and in respect of claims incurred before the beginning of the previous reporting period;
      (g) At column 8 in each part, the Insurer must record the amount of the movement during the reporting period in the provision for claims outstanding (including IBNR), in respect of claims incurred before the beginning of the previous reporting period, that arises from those claims being one year closer to settlement;
      (h) At column 9 in each part, the Insurer must record the amount of claims paid during the reporting period, in respect of claims incurred before the beginning of the previous reporting period; and
      (i) At column 10 in each part, the Insurer must record the amount of other movements in the provision for claims outstanding (including IBNR), in respect of claims incurred before the beginning of the previous reporting period.

      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]

    • PFN PIN 6.10.4

      Parts V, VI, VII and VIII must be prepared on the following basis:

      (a) At column 1 in each part, the Insurer must record the amount of the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), at the end of the reporting period and in respect of claims incurred during the reporting period;
      (b) At column 2 in each part, the Insurer must record the amount of the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), at the beginning of the reporting period and in respect of claims incurred during the previous reporting period;
      (c) At column 3 in each part, the Insurer must record the amount of the movement during the reporting period in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred during the previous reporting period, that arises from those recoveries being one year closer to settlement;

      Guidance

      PIN chapter 5 requires an Insurer to record its Insurance Liabilities and associated assets on a discounted basis. The asset representing reinsurance and other recoveries against outstanding claims increases between the beginning and end of a reporting period, because the amount of discount applied at the later is less. The revenue represented by this increase is referred to in the form as release of discount.

      (d) At column 4 in each part, the Insurer must record the amount of recoveries received during the reporting period, in respect of claims incurred during the previous reporting period;
      (e) At column 5 in each part, the Insurer must record the amount of other movements in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred during the previous reporting period;
      (f) At column 7 in each part, the Insurer must record the amount of the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), at the beginning of the reporting period and in respect of claims incurred before the beginning of the previous reporting period;
      (g) At column 8 in each part, the Insurer must record the amount of the movement during the reporting period in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred before the beginning of the previous reporting period, that arises from those claims being one year closer to settlement;
      (h) At column 9 in each part, the Insurer must record the amount of reinsurance and other recoveries received during the reporting period, in respect of claims incurred before the beginning of the previous reporting period; and
      (i) At column 10 in each part, the Insurer must record the amount of other movements in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred before the beginning of the previous reporting period.

      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]

    • PFN PIN 6.10.5

      The aggregate of items 9, 18, 27 and 36 in column 12 of this form must together equal the sum on form 1 of items 18 and 28, except in the case of a Return that does not include form 1.


      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]

    • PFN PIN 6.10.6

      The aggregate of items 45, 54, 63 and 72 in column 12 of this form must together equal the sum on form 1 of items 2.5 and 7.5, except in the case of a Return that does not include form 1.


      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]

    • PFN PIN 6.10.7

      An Insurer must present, as a Supplementary Note to this form, the following information:

      (a) the assumed inflation and discount rates, expressed as an annualised percentage, used by the Insurer in determining the amounts reported on this form, distinguishing between the rates assumed for the periods:
      (i) up to two calendar years after the end of the reporting period;
      (ii) more than two and up to five calendar years after the end of the reporting period; and
      (iii) more than five calendar years after the end of the reporting period;
      (b) the basis on which those assumed inflation and discount rates were determined; and
      (c) the estimated weighted average term to settlement of:
      (i) claims incurred in the reporting period;
      (ii) claims incurred in the previous reporting period; and
      (iii) claims incurred in earlier reporting periods.

      Derived from DFSA RM11/2004 (Made 16th September 2004). [VER1/09-04]