Entire Section

  • PIN 6.14.11 PIN 6.14.11

    Item 15, Premium Liability, represents the current portion of the cost of providing insurance service over the unexpired period of General Insurance contracts in force at the balance date. This item must be completed having regard to the following principles:

    (a) The Premium Liability reported is required to cover the value of future claims payments and associated direct and indirect settlement costs arising during the unexpired portion of the contracts in question;
    (b) Item 15 must be recorded without deducting reinsurance and other recoveries (these are disclosed as an asset as reinsurance receivables); and
    (c) The requirements for Recognition and measurement of this liability are set out in section 5.4.

    • PIN 6.14.11 Guidance

      As stated in the Guidance to PIN rule 5.4.7, it is common practice for Insurers to account for their exposures on General Insurance contracts in force by means of an unearned premium provision and (where necessary) a premium deficiency reserve. Where the aggregate of the unearned premium provision and the premium deficiency reserve (both gross of reinsurance) can be shown to be not less than the amount of Premium Liability determined in accordance with section 5.4, an Insurer may use that aggregate as a proxy for Premium Liability for the purposes of recording item 15 on this form.

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