PINS 8.7.11 Measuring net value of policy benefits as liability

In measuring the liability mentioned in rule 8.7.10, the insurer must:

(a) use actuarial principles;
(b) provide for all liabilities based on assumptions that meet the general requirements for prudent assumptions in rule 8.8.1 (including appropriate margins for adverse deviation of relevant factors that are sufficient to ensure that there is no significant foreseeable risk that liabilities to policyholders for long-term insurance contracts will not be met as they fall due); and
(c) take into account:
(i) all guaranteed policy benefits, including guaranteed surrender values;
(ii) vested, declared or allotted bonuses to which policyholders are already either collectively or individually contractually entitled;
(iii) all options available to the policyholder under the terms of the contract;
(iv) discretionary charges and deductions from policy benefits, in so far as they do not exceed the reasonable expectations of policyholders;
(v) expenses, including commissions; and
(vi) any rights under contracts of reinsurance in respect of long term insurance business.
Amended by QFCRA RM/2013-1 (as from 1st January 2015).