PINS 8.7.15 Negative values for reserves — long-term insurance

An insurer must not calculate a negative value for its mathematical reserves for a long-term insurance contract unless:

(a) the calculation is based on assumptions that meet the general requirements for prudent assumptions in rule 8.8.1;
(b) the contract does not have a guaranteed surrender value at the actuarial valuation date; and
(c) the total mathematical reserves established by the insurer have a value of at least:
(i) if the insurer's long-term insurance contracts include linked long-term contracts — the sum of the surrender values of all its linked long-term contracts at the actuarial valuation date; and
(ii) in any other case — zero.
Inserted by QFCRA RM/2013-1 (as from 1st January 2015).