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Instructional Guidelines

1. This form is required only for an Annual Regulatory Return prepared by a DIFC Incorporated Insurer conducting Direct-Long-Term Insurance Business, and is required only in respect of that Direct Long-Term Insurance Business.
2. This form, which is prepared only by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business, provides the DFSA with an analysis of the breakdown of gross insurance liabilities in respect of those liabilities, and reinsurance recoverable in their respect.
3. An Insurer must present at items 1 to 7, for each Class of Business, the gross Direct Long-Term Insurance Business policy liabilities as at the reporting date, analysed across columns 1 to 4 as follows:
a. in column 1, the amount in respect of participating business Direct Long-Term Insurance contracts, in respect of benefits that have vested in the policyholders;
b. in column 2, the amount in respect of participating business Direct Long-Term Insurance contracts, in respect of benefits that have not vested in the policyholders;
c. in column 3, the amount in respect of all other Direct Long-Term Insurance Contracts; and
d. in column 4, the amount of any additional provisions made by the insurer, that form part of gross policy liabilities but do not fall within columns 1 to 3.
4. Vested benefits are those to which policyholders are collectively or individually entitled as a result of a guarantee in the insurance contract, and include bonuses that have been declared or allotted, The Rules in PIN5 on valuation of assets and liabilities require an Insurer also to make provision for benefits that are discretionary, for example bonuses that are expected to be declared in the future. The provision in respect of these items will be included at Column 2.
5. An Insurer must present at item 9, for each of columns 1 to 4, the amount of the figure at item 8 that relates to liabilities in respect of parties that are Related to the Insurer.
6. In practice, a valuation of Insurance Liabilities may include provisions that are not readily attributable to particular insurance contracts. Where this is the case, such provisions should be shown in column 4. The Actuary’s Report prepared under section PIN 7.3 includes commentary on additional provisions. Insurers should ensure that disclosure on this form is consistent with the description in the Actuary’s Report. A reconciliation may be provided in a Supplementary Note to this form.
7. An Insurer must present at items 10 to 16, for each Class of Business, the amount of gross Direct Long-Term Insurance Business policy liabilities as at the reporting date that is recoverable under reinsurance arrangements, analysed across columns 1 to 4 in the same manner as items 1 to 7.
8. An Insurer must present at item 18, for each of columns 1 to 4, the amount of the figure at item 17 that relates to amounts recoverable from parties that are Related to the Insurer.

[Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]