• PINS Part A3.8 PINS Part A3.8 Outstanding claims risk component

    Amended by QFCRA RM/2015-1 (as from 1st July 2015).

    • PINS A3.8 Guidance

      An insurer may be exposed to the risk that the cost of claims in respect of general insurance business will exceed the amounts recorded as liabilities in the insurer's balance sheet. The purpose of the outstanding claims risk component is to require an insurer to hold capital against this risk in accordance with the calculations set out in rule A3.8.2. This calculation only applies to liabilities in respect of outstanding claims (premium liabilities addressed in the premium risk component in Part A3.7).

      Amended by QFCRA RM/2015-1 (as from 1st July 2015).

    • PINS A3.8.1 Application of pt A3.8

      This Part applies to general insurance business.

      Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

    • PINS A3.8.2 PINS A3.8.2 Outstanding claims risk component

      (1) An insurer's outstanding claims risk component is the sum of the amounts obtained by multiplying the insurer's net liability for outstanding claims that falls within each PINS category by the percentage applicable to that liability under table A3.8.2.
      Amended by QFCRA RM/2015-1 (as from 1st July 2015).

      • PINS Table A3.8.2 Percentage factor — outstanding claims risk component

        Item PINS Category Direct insurance % Reinsurance: proportional % Reinsurance: non-proportional %
        1 PINS category 1 11 12 14
        2 PINS category 2 9 10 12
        3 PINS category 3 11 12 14
        4 PINS category 4 14 15 17
        (2) In this rule:

        net liability for outstanding claims means the liability in respect of future claims referred in rule 8.6.8, less any expected reinsurance and non-reinsurance recoveries in respect of that liability as at the solvency reference date.

        Note Solvency reference date is defined in the glossary.
        Amended by QFCRA RM/2015-1 (as from 1st July 2015).

    • PINS A3.8.3 Insurer may apply for different percentages

      (1) The Regulatory Authority may, by written notice, allow the insurer to use percentages other than those in table A3.8.2 if the authority is satisfied that:
      (a) adequate mortality and morbidity information exists in respect of that business; and
      (b) the information provides a reasonable basis for reliance on actuarial principles.
      (2) The percentages that may be used must be those stated in the notice but may not be lower than 8%.
      Amended by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.8.4 Certain contracts not included

      (1) If an insurer underwrites contracts of insurance in PINS category 1 that are long-term insurance contracts, the insurer need not calculate an outstanding claims risk component in respect of those contracts.
      (2) For contracts of insurance in PINS category 1 that are long-term insurance contracts, the insurer must calculate a long-term insurance risk component.
      Amended by QFCRA RM/2015-1 (as from 1st July 2015).

    • PINS A3.8.5 [Deleted]

      Deleted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS A3.8.6 [Deleted]

      Deleted by QFCRA RM/2013-1 (as from 1st January 2015).