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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 business.
2. This form, which is prepared only by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business, provides an Insurer with a working schedule for the calculation of the element of the Long-Term Insurance Risk Component that is attributable to its Direct Long-Term Insurance Business, and permits the DFSA to assess the compliance of that calculation with the Rules in PIN A4.12.
3. On this Form, where an item is shaded in a column, no entry is made for that item in that column.
4. In items 1 to 7.3 the Insurer must show, for each Class of Business, or for each sub-division of a Class of Business as shown on the face of the form:
a. at columns 1 and 2, the amount of the Long-Term Insurance Liability, gross and net of reinsurance respectively;
b. at column 4, expressed as a percentage, the reinsurance ratio calculated as the amount in column 2 divided by that in column 1, except that if the result is less than 85%, the figure shall be 85%; and
c. at column 5, the amount determined by multiplying the amount in column 1 with the two percentages in columns 3 and 4.
5. The amount in item 8 of column 1 must agree to form PRU PIN13 column 5 item 8 and the amount in item 8 of column 2 to form PRU PIN13 column 5 item 8 less item 17.
6. At items 9 to 12 the Insurer must show, for all Direct Long-Term Insurance Business, according to the extent of death risk borne by the Insurer as shown on the face of the form:
a. at columns 1 and 2, the amount of capital at risk, gross and net of reinsurance respectively, where capital at risk has the meaning given in PIN Rule A4.12.2(c);
b. at column 4, expressed as a percentage, the reinsurance ratio calculated as the amount in column 2 divided by that in column 1, except that if the result is less than 50%, the figure shall be 50%; and
c. at column 5, the amount determined by multiplying the amount in column 1 with the two percentages in columns 3 and 4.
7. At item 14 the Insurer must show:
a. at column 1, the amount of net administrative expenses incurred in the reporting period in respect of linked Direct Long-Term Insurance business where the Insurer bears no investment risk and expenses are not fixed for a period of more than five years; and
b. at column 5, the amount determined by multiplying the amount in column 1 with the percentage in column 3.
8. At item 15.1 the Insurer must show:
a. at column 1, the amount of gross premiums in the reporting period in respect of Class IV as shown on form PRU PIN12 item 4 column 5, multiplied by 18% so far as concerns the amount up to $50 million and by 16% so far as concerns any amount in excess of $50 million;
b. at column 3, expressed as a percentage, the amount determined by dividing the amount of form PRU PIN12 item 4 column 5 less item 13 column five, by the amount of form PRU PIN12 item 4 column 5, except that if the result of this calculation is less than 50% the figure shall be 50%.
9. At item 15.2 the Insurer must show:
a. at column 1, the amount of gross claims incurred in the reporting period in respect of Class IV, multiplied by 26% so far as concerns the amount up to $35 million and by 23% so far as concerns any amount in excess of $35 million; where
b. at column 3, expressed as a percentage, the amount determined by dividing the gross claims incurred minus claims recovered, by the gross claims incurred, except that if the result of this calculation is less than 50% the figure shall be 50%.
c. ‘gross claims incurred’ means the amount of gross claims paid at form PRU PIN5 item 42 column 5 plus the amount, if any, in respect of Direct Long Term Insurance Business of Class IV included at item 18 or 28 of column 1 of form PRU PIN1 and less any such amount included at those items of column 2 of that form: and
d. ‘claims recovered’ means the amount of reinsurance and other recoveries in respect of paid claims at form PRU PIN5 item 51 column 5 plus the amount, if any, in respect of Direct Long Term Insurance Business of Class IV included at item 2.2, 2.4, 7.2 or 7.4 of column 1 of form PRU PIN1 and less any such amount included at those items of column 2 of that form.
10. At item 17 the Insurer must show:
a. at column 1, the amount of assets attributable to the Insurer’s Direct Long Term Insurance Business of Class V; and
b. at column 5, the amount determined by multiplying the amount in column 1 with the percentage in column 3.
11. The amount at item 18 must equal the amount at form PRU PIN11 item 3.9 column.

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