• PINS Part 8.4 PINS Part 8.4 Basic principles of recognition and measurement

    Editorial changes (as from 1 January 2015).

    • PINS 8.4.1 PINS 8.4.1 Recognition of assets and liabilities

      An insurer must, except where this Chapter provides otherwise, recognise its assets and liabilities in accordance with a basis of accounting set out in PINS Rule 8.4.2, and the values attributed to those assets and liabilities must be measured in accordance with that basis of accounting.

      Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 8.4.1 Guidance

        The exceptions provided in this Chapter relate to the following:

        a. specific Rules in respect of certain assets and liabilities, intended to achieve a regulatory objective not achieved by application of either or both of the bases of accounting set out in PINS Rule 8.4.2;
        b. assets and liabilities that are not dealt with in either or both of the bases of accounting set out in PINS Rule 8.4.2;
        c. the overriding power of the Regulatory Authority, set out in PINS Rule 8.2.4, to require an insurer to adopt a particular measurement for a specific asset or liability.
        Editorial changes (as from 1 January 2015).

    • PINS 8.4.2 Permitted bases of accounting

      An insurer must adopt 1 of the following as the basis of its accounting:

      (a) in the case of a takaful entity, the standards of the AAOIFI;
      (b) in any other case:
      (i) IFRS;
      (ii) UK GAAP or US GAAP; or
      (iii) any other accounting standards or principles prescribed in Rules made by the Regulatory Authority.
      Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS 8.4.3 Assumptions and methods on which valuations depend

      An insurer must, where the valuation of an asset or liability is dependent upon the adoption of assumptions or the adoption of a calculation method, ensure that any change in the assumptions or methods adopted is reflected immediately in the value attributed to the asset or liability concerned. The recognition of the effects of changes in assumptions or methods may not be deferred to future reporting periods.

      Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS 8.4.4 Actuarial principles

      The Regulatory Authority may also specify actuarial principles to be used by an insurer in measuring assets and liabilities.

      Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS 8.4.5 Derecognising liabilities

      (1) An insurance liability (or a part of an insurance liability) must not be derecognised until the obligation giving rise to the liability expires or is discharged or cancelled.
      (2) To avoid doubt, if reinsurance covering the liability (or part of the liability) is purchased, the liability must not be derecognised unless the purchase results in the discharge or cancellation of the obligation giving rise to the liability.
      Inserted by QFCRA RM/2013-1 (as from 1st January 2015).