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PFN PIN 6.5 Guidance

1. The ‘Statement of Financial Position’ provides the DFSA with the necessary information on assets, liabilities and capital to undertake an assessment of an Insurer’s financial position and performance and facilitate in assessing compliance with the minimum Capital Requirements.
2. PIN section 5.3 deals with the Recognition and measurement of assets and liabilities on this form.
3. The Rules in this section provide instructions as to the completion of specific lines on the form. Instructions that are provided in respect of a particular Category of current assets or liabilities are normally applicable also (with the appropriate changes) to the corresponding Category of noncurrent assets or liabilities, and vice versa.
4. The completion of this form requires Insurers to make estimates, for example in assigning assets and liabilities as current or non-current. As an example, the settlement date of outstanding claims, particularly IBNR, is often uncertain. An Insurer may make a reasonable estimate of the amount that is expected to be settled within twelve months, and record that amount as a current liability, with the balance being recorded as non-current. A similar approach would be acceptable for the assets representing reinsurance and other recoveries, that would not normally become due and receivable until the underling claim has been settled.
5. Insurers are required to disclose the amount included in certain totals that relates to parties Related to the Insurer. These disclosures exclude amounts due to or from the Insurer under Contracts of Insurance.

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