PFN PIN 6.5.16

Item 18 reports the current portion of the Insurer’s provision for outstanding claims. This item must be completed having regard to the following principles:

(a) The liability must represent the estimated cost to the Insurer of settling claims which it has incurred at the reporting date but which have not been finalised. The liability is in respect of both direct business and inward reinsurance business and must take into account unpaid claims, unreported claims, adjustments for claims development and the direct and indirect claims settlement costs that the Insurer expects to incur in settling its outstanding claims;
(b) In the case of Long-Term Insurance Business, this item must include all claims liabilities in respect of Contracts of Insurance that are no longer included in the calculation of the net policy benefits at item 20;
(c) The liability must be stated without deducting reinsurance and other recoveries (these are disclosed as an asset as reinsurance receivables);
(d) The requirements for Recognition and measurement of this liability are set out in PIN sections 5.4 and 5.6; and
(e) The liability does not include any amounts for catastrophe reserve, equalisation reserve or similar provisions that an Insurer may be required to maintain to satisfy regulatory requirements in a jurisdiction other than the DIFC.

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