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PIN A4.10 Guidance

The purpose of the underwriting risk component of the Minimum Capital Requirement is to require an Insurer to set aside capital to address the risk that the cost of claims in respect of General Insurance Business will vary from the cost implicit in the premiums being charged. The basic calculation model set out in PIN Rule A4.10.2 applies different factors to the premium in respect of different Classes of Business, based on the different perceived risk of variability associated with each. The model is modified by additional provisions dealing with certain Classes of Business. This section also restricts the extent to which reinsurance may be taken into account when calculating the underwriting risk component for an Insurer, other than a Captive Insurer.

Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
[Added] DFSA RMI296/2021 (Made 24th February 2021). [VER17/04-21]