Entire Section

  • PFN PIN 6.16 PFN PIN 6.16 Interpretation of terms in form 2

    • PIN 6.16 Guidance

      1. This section provides the necessary mechanism to apply the relevant factors in the calculation of the Insurer’s capital adequacy position, for each type of Return, when preparing form 2. Form 2 is not prepared in the case of a DIFC Business Return.
      2. This section sets out in tabular form the cross-references between the terms used on form 2 and the meanings that must be given to those terms for each type of Return.

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

    • PIN 6.16.1

      For the purposes of form 2, the meaning that must be given to each of the terms set out in the leftmost column of the table below for each type of Return is contained in the column headed by that type of Return.


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

    • PIN 6.16.2

      Where a term does not apply to a type of Return, this is denoted by the characters ‘N/A’ and this item must be left blank on the form.

      Meaning of term for each type of Return
      Item no. Term used in form Global Return (all Insurers except Protected Cell Companies) Global Return (Protected Cell Companies) Cell Return Fund Return
      1 Base capital Base capital as defined in PIN rule A3.3.1 Base non-cellular capital as defined in PIN rule A5.3.1 Base cellular capital as defined in PIN rule A5.7.1 Base fund capital as defined in PIN rule A7.3.2
      3 Adjusted equity AE as defined in PIN rule A3.2.1 ANE as defined in PIN rule A5.2.1 ACE as defined in PIN rule A5.6.1 AFE as defined in PIN rule A7.2.1
      4 Hybrid Capital Adjustment HCA as defined in PIN rule A3.2.1 HNCA as defined in PIN rule A5.2.1 HCCA as defined in PIN rule A5.6.1 FHCA as defined in PIN rule A7.2.1
      5 Adjusted Capital Resources ACR as defined in PIN rule A3.2.1 ANCR as defined in PIN rule A5.2.1 ACCR as defined in PIN rule A5.6.1 AFCR as defined in PIN rule A7.2.1
      6 Minimum Capital Requirement MCR as defined in PIN rule A4.2.1 MSCR as defined in PIN rule A6.2.2 MSCR as defined in PIN rule A6.2.2 MFCR as defined in PIN rule A8.2.1
      6.1 Default risk component DRC as defined in PIN rule A4.2.1 DRC as defined in PIN rule A6.2.2 DRC as defined in PIN rule A6.2.2 DRC as defined in PIN rule A8.2.1
      6.2 Investment volatility risk component IVRC as defined in PIN rule A4.2.1 IVRC as defined in PIN rule A6.2.2 IVRC as defined in PIN rule A6.2.2 IVRC as defined in PIN rule A8.2.1
      6.3 Off-balance sheet asset risk component OARC as defined in PIN rule A4.2.1 OARC as defined in PIN rule A6.2.2 OARC as defined in PIN rule A6.2.2 OARC as defined in PIN rule A8.2.1
      6.4 Off-balance sheet liability risk component OLRC as defined in PIN rule A4.2.1 OLRC as defined in PIN rule A6.2.2 OLRC as defined in PIN rule A6.2.2 OLRC as defined in PIN rule A8.2.1
      6.5 Concentration risk component CRC as defined in PIN rule A4.2.1 CRC as defined in PIN rule A6.2.2 CRC as defined in PIN rule A6.2.2 CRC as defined in PIN rule A8.2.1
      6.6 Size factor adjustment SFAC as defined in PIN rule A4.2.1 SFAC as defined in PIN rule A6.2.2 SFAC as defined in PIN rule A6.2.2 SFAC as defined in PIN rule A8.2.1
      6.7 Underwriting risk component URC as defined in PIN rule A4.2.1 N/A URC as defined in PIN rule A6.2.2 N/A
      6.8 Reserving risk component RRC as defined in PIN rule A4.2.1 N/A RRC as defined in PIN rule A6.2.2 N/A
      6.9 Long-Term Insurance risk component LIRC as defined in PIN rule A4.2.1 N/A LIRC as defined in PIN rule A6.2.2 LIRC as defined in PIN rule A8.2.1
      6.10 Asset management risk component AMRC as defined in PIN rule A4.2.1 AMRC as defined in PIN rule A6.2.2 AMRC as defined in PIN rule A6.2.2 AMRC as defined in PIN rule A8.2.1
      7 Absolute minimum requirement applicable to reporting unit Absolute minimum requirement applicable to reporting unit The amount set out in PIN rule A6.2.4 or, if higher, the MSCR as defined in PIN rule A6.2.2 plus any amount that must be added to that amount pursuant to PIN rule A6.2.6 The amount set out in PIN rule A6.2.5 The amount set out in PIN rule A8.2.3

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