PIN A6.11 Guidance
1. The purpose of the reserving risk component is to require an
Insurer to set aside capital to address the risk that the cost of claims will vary from the amounts recorded as liabilities in the Insurer's balance sheet. This calculation applies only to liabilities in respect of outstanding claims (the risk of deterioration in Premium Liability is addressed in the underwriting risk component in PIN section A6.10). The provisions in this section apply the relevant provisions of PIN section A4.11 to the segments of a Protected Cell Company.
Insurance Business in Protected Cell Companies may only be carried on through Cells, every Insurer will have a reserving risk component of zero in respect of its Minimum Non-Cellular Capital Requirement.
Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]