Financial Condition Report (FCR) for

General insurance companies

Page 1 of 28
Financial Condition Report
For the financial year ended: 31
st
March 20..___________
Of
(Name of the Non-Life Insrance !om"any#
$y
(Name of the %""ointed %ctary#
&ection 'o"ic (a)e no
1. *etails of the Insrer + %""ointed %ctary ,
2. -.ecti/e smmary 0
3. $siness (ro1ections 2
3. %nalysis of 4siness )ro5th 6
,. %nalysis of e."erience 7
0. %de8acy of "remim 11
2. %de8acy of reser/es 12
6. 9einsrance 13
7. 9is: mana)ement 13
10. %de8acy of ca"ital 12
11. In/estment and %sset lia4ility mana)ement 16
12. Miscellaneos 17
13. !rrent Financial !ondition 20
13. Ftre Financial !ondition 21
1,. %d/ise on %ctarial Matters 22
10. !omments of the $oard of the insrer 23
%""ointed %ctary;s certificate 23
<lossary 2,
FCR Preparation
Page 2 of 28
I. The Objectives :
The objective of Financial Condition Report is to investigate the entire general insurance
business carried on by the insurer as on the date of valuation and to report the
strengths and weaknesses in terms of the risk the insurers carry with respect to meeting
solvency requirements, profitability, morbidity, liquidity, credit, expense, investment
return, assetliability mismatch, insurer!s future position, other risksspecific to the
business etc"
This report shall specifically address#
a" The sensitivity of the future solvency position to potential changes in the
economic environment, claims experience, pricing strategy and all other relevant
factors, if any
b" $uilding of early warning signals to assess the financial condition
c" Comprehensive view on the company
II. Instructions
%" The %% shall ensure the following#
a. 'he Financial !ondition 9e"ort alon) 5ith the $oard comments= dly
si)ned 4y the !-O and the %""ointed %ctary= shall 4e s4mitted to the
%thority 4y the end of %)st of e/ery financial year. %lso the soft co"y
of the said re"ort shall 4e sent to actarial>irda.)o/.in
4. 'he soft co"y shall inclde the %nne.re in e.cel formats.
c. 'he format and ta4les sti"lated in this docment shall 4e adhered to
5ithot any alternation" 'he fields 5hich are not rele/ant shall not 4e left
4lan:= 4t shall state ?not a""lica4le@ or ?N%@.
d. 'he nm4ers "ro/ided in the F!9 shall 4e:
i" 9econciled 5ith the financial statements of accounts and
I$N9, wherever applicable"
ii. (ro/ide in nit of thosands
iii" %ll outgo entries in the %nnexure shall be shown in brackets &'
e. 'he chronolo)ical order in the LO$ ta4le shall 4e strictly follo5ed.
Page 3 of 28
f. &e"arate 'a4les shall 4e frnished for each !lassificationA !om4ination of
!lassifications (5here/er the classification is more than one#.
). The soft copy of the %nnual Report &Tables()chedules in excel format' shall also
be furnished to the %uthority at actarial>irda.)o/.in
$" The %ppointed %ctuary &%%' shall provide detailed analysis along with the actions
proposed, if any, on each section of the FCR"
C" The %% shall also discuss the areas of concern under each section with specific
emphasis on business operations inside(outside *ndia &wherever applicable' and its
impact on the insurer as a whole"
Page 4 of 28
!ection " #etails of Insurer $ %ppointed %ctuar&
Sl.No. Item Current Year Last Year
1.
Name of the Insurer
2. Address with Phone/fax numbers ;
website address email
!. "e#istration number issued b$ the
I"%A
&.
%ate of re#istration
'. %ate of (ommen(ement of
o)erations
*.
Paid u) Ca)ital
+.
Net ,orth
-.
Name of C./
0.
A))ointed A(tuar$ %etails
a.
Name
b.
Qualification
(.
Date of Birth
d.
Appointment with the insurer
e.
Appointment as AA
f.
Date of issue of latest COP from IAI
#.
Date of expiry of COP
&i)natre of %% &i)natre of (rinci"al Officer
(Name# (Name#
Page 5 of 28
!ection ' : ()ecutive summar&
+", For each -.$, the %% shall provide the required data in Tables +",, +"+ &a' / &b' /
+"0 of %nnexure and discuss pointwise the following#
+",", The key issues in relation to the factors that influence the performance of
the company"
+","+ .verview of the financial condition of the company without omission of any
material facts"
+","0 *n detail the insights and recommendations provided to the insurer on the
overall risk profile, the financial condition and the business profile of the
company"
+","1 The strengths and weaknesses of the company and also highlight the
areas of concern"
+","2 The reasons for any significant variation in the current key ratios with
respect to previous year!s ratios as well as current year expected values
having regard to#
+",",", -ine of business and inherent year to year variations in nature of
business
+",","+ Tail length of claims in each line of business
+",","0 )easonal variations and any C%T events common to the *ndustry
+",","1 Company si3e and number of years since establishment
+","4 The remedial steps planned in case of adverse experience in key ratios
compared to expected and last two years ratios"
+"+ The %% shall provide a detailed analysis of quantitative information, with regard to
volume of business, underwriting, insurance profit, key ratios and business
composition, provided in table +",, +"+ &a' / &b' / +"0 of %nnexure"
Page 6 of 28
!ection * : +usiness Projections
0", The %% shall discuss the business philosophy separately for direct business and
inward reinsurance business with respect to the expected business lines and
the direction that the insurer intends to move in future with specific reference to
the core functions of the company"
0"+ *n addition to the above qualitative analysis, the %% shall provide quantitative
information in ta4le 3.1 )i/en in %nne.re, capturing line of business wise the
actual to expected analysis of various key elements of the company"
0"0 %% shall discuss in detail the reasons for any significant variations between the
actual and expected results furnished in table 0", of %nnexure"
Page 7 of 28
!ection , : %nal&sis of business -ro.th
,." For each -.$, the %% shall provide the required data in Tables 1", &a' / &b' of
%nnexure and comment explicitly on the following#
1",", The business strategy adopted by the company
1","+ The new business written and renewal business &Customer Retention' of
the company
1","0 5arious key parameters that influence the business growth of the
company including those given in table 1",&b'"
,.' For the "r"ose of this re"ort, renewal business is defined as follows#
1"+", The policies with term one year shall be treated as renewed in the
second and subsequent years, if the policy is continued in the
subsequent years without any gap i"e" customer is retained for the
subsequent years
1"+"+ &in)le "remim policies with term more than one year shall be treated
as renewed from second year onwards till the end of the policy term
provided the policy is continued with the insurer"
1"+"0 The policies with term more than one year with an option to pay the
single premium in installments shall be shown as renewal business in
second and subsequent years if the installment due is received as per
the terms and conditions of the contract"
1"+"1 Regular premium policies with term more than one year shall be treated
as renewed in subsequent years if the renewal premium is received as
per the terms and conditions of the contract"
Page 8 of 28
!ection / %nal&sis of ()perience
/." Persistenc& %nal&sis :
5.1.1 For each -.$, the %% shall provide the required data in Table 2", of
%nnexure and discuss the renewal business( renewal rate of the company,
implementation of previous year!s initiatives and provide future initiatives
planned in this regard" For the "r"ose of this re"ort= rene5al
4siness is as defined in )ection 1 &1"+' of this circular"
/.' Free loo0 %nal&sis
2"+", %% shall furnish the quantitative information on free look cancellations in
table 2"+ of %nnexure and comment on the same"
/.* ()pense %nal&sis
2"0", For each -.$, the %% shall provide the required data in Tables 2"0 &a' and
2"0 &b' of %nnexure and discuss pointwise the following #
2"0",", The methodology adopted for expense analysis in the entire
financial planning of the *nsurance $usiness"
2"0","+ The impact of Renewals on the total expenses
2"0","0 The method of allocation of expenses to different lines of
business"
2"0"+ The %% shall discuss the reasons for any significant variation in the actual
from expected expense ratio furnished in table 2"0 &b' along with the
proposed course of action, if any"
/., Claims %nal&sis
2"1", For each -.$, the %% shall provide the required data in Tables 2"1 &a', &b',
&c' / &d' of %nnexure and discuss pointwise the following#
2"1",", The impact of change in frequency / severity of reported and
settled claims on the financial condition of the insurer
2"1","+ The impact of -arge Claims on the financial condition of the
insurer along with the specific definition used for the -arge
Claims"
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2"1","0 The methodology followed to provide reserves as and when the
claim is intimated and subsequent updation of reserves till the
claim settlement
2"1","1 The impact of catastrophe claims on the financial condition of the
insurer
2"1","2 The impact of recoveries from(to reinsurers on the financial
condition of the insurer
2"1","4 The impact of salvage and subrogation on gross claims
2"1","6 The impact of closed and reopened claims on the financial
condition of the insurer
2"1","7 The impact of any new or latent claims, that has emerged in the
current financial year, on the financial condition of the insurer
2"1","8 The impact of any court awards setting precedence in claims
settlements on the financial condition of the insurer
2"1",",9 The impact of any other relevant factors that have affected the
financial condition of the insurer
2"1",",, The changes &if any' in the claim processing procedure and its
impact on the financial condition of the insurer"
2"1",",+ The changes &if any' in the underwriting processes or guidelines
and its impact on the financial condition of the insurer"
2"1"+ %% shall explicitly comment on the quantitative information furnished in
table 2"1 &a', &b', &c' / &d' of %nnexure
Page 10 of 28
!ection 1 %de2uac& of premium
6.1 For each -.$, the %% shall provide the required data in Tables 4",, 4"+ / 4"0 of
%nnexure and discuss pointwise the following#
4",", The pricing strategy( methodology adopted
4","+ The effect of large claims and catastrophe claims on the pricing strategy
4","0 The profit testing procedure adopted"
4","1 The effect of inflation on pricing
4","2 The effect of various major risks on pricing
4","4 The effect of reinsurance arrangements on pricing
4","6 The effect of court awards on pricing
4","7 :ow the ;ricing is addressed considering the premium deficiencies &if
any' and the respective ;<R!s as given in table 4","
4","8 :ow the financial condition of the company is impacted due to high
discounts offered on the base premiums &as per F/= approval'"
4",",9 The reasons for producing underwriting loss &if any'"
4",",, The impact of underwriting loss &if any' on the financial condition of the
company"
4",",+ The steps initiated to minimi3e the underwriting loss &if any'
4",",0 The impact of underwriting loss &if any' on pricing
4",",1 The steps initiated to minimi3e the loss ratios furnished in table 4"0"
4",",2 The impact of loss ratios &if any' on pricing
4",",4 The effect of any other relevant factors on pricing
4",",6 <etails of any rating analysis performed" *f no such study has been
done, the reason thereof shall be mentioned and a plan for the next
round of study shall be mentioned
Page 11 of 28
6.2 %% shall provide a detailed analysis on the quantitative information furnished in
table 4",, 4"+ / 4"0 of %nnexure
!ection 3 %de2uac& of Reserves
7.1 For each -.$, the %% shall provide the required data in Tables 6",, 6"+ / 6"0
of %nnexure and discuss pointwise the following#
6",", The detailed methodology followed in estimation of reserves specifying
whether pointestimates or stochastic or any other models are used in
estimation of reserves in respect of the following#
6",",", <irect insurance business for short tailed and long tailed
6",","+ Reinsurance(coinsurance accepted business separately
6",","0 Catastrophes and large claims
6","+ *n case of stochastic reserving, the percentile at which the final
reserve is estimated shall be provided along with the rationale
6","0 The data and system constraints in respect of direct insurance
business, reinsurance(coinsurance accepted(ceded business
separately"
6","1 The methodology adopted to review the adequacy of premium rates
and the setting up of suitable reserves, if inadequate"
6","2 %ny other relevant factors that have a significant impact on the
estimation of reserves"
6","4 The methodology followed in monitoring the actual loss development
with expected loss development and the proposed action &if any'
7.2 The %% shall provide a detailed analysis of quantitative information furnished in
table 6",, 6"+ / 6"0 of %nnexure
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!ection 4 Reinsurance
7", For each -.$, the %% shall provide the required data in Tables 7",, 7"+, 7"0 / 7"1
of %nnexure and discuss pointwise the following#
7",", The Company!s Reinsurance, Coinsurance and *nward(.utward
Reinsurance ;hilosophy
7","+ The facultative reinsurance arrangements for .utward and *nward of the
company"
7","0 The multilateral reinsurance arrangements &such as declined pool' of the
company"
7","1 The process of reinsurance renewals
7","2 The reinsurance disputes, if any"
7","4 The methodology followed in arriving at maximum retention of the
company"
7","6 %vailability of relevant reinsurance capacities
7"+ The %% shall provide a detailed analysis of quantitative information furnished in
table 7",, 7"+, 7"0 / 7"1 of %nnexure
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!ection 5 : Ris0 6ana-ement
The %% shall detail for each -.$ the assessment and management of Risk in terms of
identification, estimation and management of significant risks specific to the insurer"
7.1!om"any o/er/ie5
The %% shall discuss the following pointwise#
8",", The material lines of business written
8","+ >ey risks
8","0 Risk mitigation in place
8","1 Risk concentration# Region wise, product wise, line of business wise,
business allocation wise etc",& distribution channel wise '
8","2 >ey trends or factors that have or may have a significant impact on the
financial condition of the company"
8","4 The impact arising out of discounts, pricing competition, under reserving,
catastrophes, business volumes"
7.29is: mana)ement system #
The %% shall discuss the following pointwise#
8"+", Risk strategy
8"+"+ Risk management roles and responsibilities
8"+"0 Risk monitoring procedures adopted
8"+"1 %pproaches(tools used to identify and assess risks, including details of key
risk indicators and metrics used
8"+"2 %pproach adopted to identify emerging risks
8"+"4 The existing internal controls
Page 14 of 28
8"+"6 The review process and feedback loop
8"+"7 %ny risks that are not considered within the company!s risk management
system, along with the reasons as to why they are not included"
8"+"8 The appropriateness of the risk management system, given the nature,
scale and complexity of the business"
7.3 9is: e."osre
The %% shall discuss the following pointwise#
8"0", ?ature and extent of the risk exposure, and how this has developed
8"0"+ ;roducts and investments that give rise to risk, including for investment
risk, details of the investment strategy
8"0"0 @ualitative and quantitative measures used to assess the risk
8"0"1 The level of risk the company is prepared to take, or the company!s
tolerance for the risk
8"0"2 Controls in place to manage the level of risk
8"0"4 Ahether the current level of risk is at an acceptable level
8"0"6 :ow experience compares with pricing assumptions
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7.3 Miti)ation #
The %% shall discuss the following pointwise#
8"1", %ppropriateness of reinsurance and other risk mitigation tools in place to
reduce risk exposures"
8"1"+ <etails of any risk mitigation tools currently in place and the processes
for monitoring their effectiveness"
8"1"0 Risk mitigation methodologies used"
7., &ensiti/ity #
8",", For each -.$, the %% shall provide the required data in Tables 8", of
%nnexure and discuss pointwise the following#
8"2",", The sensitivity of the business to the key risk exposures
8"2","+ The methods and assumptions used to assess the sensitivities"
8"2","0 The sensitivity of the risks that have a significant impact on the
solvency of the company
8","+ The %% shall define explicitly the base / the pessimistic scenarios
assumed in arriving at the projections given in table 8", of %nnexure"
Page 16 of 28
!ection "7: Capital %de2uac&
,9", For each -.$, the %% shall provide the required data in Tables ,9", / ,9"+ of
%nnexure and discuss pointwise the following#
,9",", The current and future capital adequacy of the company
,9","+ The company!s perspective on capital management
,9","0 The scenario testing being done
,9","1 The impact of business plans on the capital requirement of the
company"
,9"+ The %% shall provide detailed analysis of quantitative information, with regard
to business level solvency margins and business plans for the current year,
furnished in table ,9", / ,9"+ of %nnexure"
Page 17 of 28
!ection "": Investments and %sset 8iabilit& 6ana-ement
,,", For each -.$, the %% shall provide the required data in Tables ,,", of
%nnexure and discuss pointwise the following with respect to the insurer!s
liability profile and liquidity needs#
,,",", The insurer!s investment strategy
,,","+ The methodology of asset liability management of the company
,,","0 The areas of concern in asset liability management
,,","1 The investment philosophy of the company including the mix and
quality of investment assets
,,","2 The changes &if any' in the asset allocation, investment strategy etc
based on the %-B analysis
,,","4 Ahether assets and liabilities are matched and if not, reasons and
implications on financial condition of the company"
,,","6 The impact of various significant risks on the investments of the
company
,,","7 The impact of various risks on asset liability management of the
company
,,"+ The %% shall provide detailed analysis of quantitative information, with regard
to assets and liabilities of the company, furnished in table ,,", of %nnexure
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!ection "': 6iscellaneous
,+", %% shall furnish the number of complaints received by the company under
various heads in table ,+", &a', &b' / &c' of %nnexure and shall
,+",", ;rovide a detailed analysis of various complaints along with the
intensity of complaints and the time taken by the company to settle
them"
,+","+ <iscuss the impact of these complaints on the financial condition
of the company
,+","0 <iscuss the steps initiated by the company to reduce the
complaints
,+","1 <iscuss the steps initiated to reduce the time taken by the
company to resolve the complaints
Page 19 of 28
!ection "*: Current Financial Condition
,0", For each -.$, the %% shall provide the required data in Tables ,0", / ,0"+
of %nnexure and shall discuss pointwise the following#
,0",", The current financial condition of the Company with specific
focus on each of the previous sections of this report"
,0","+ The financial condition of the company based on his
understanding of the business and adequacy of reserves"
,0","0 The solvency position of the company
,0","1 @uarterly solvency ratios, premium / expense details of the
company furnished in table ,0", / ,0"+ of %nnexure"
,0","2 The adequacy of premium
,0","4 The changes &if any' in reserving methodology from the previous
years, and explain reasons for such changes"
,0","6 The impact of change in reserving methodology on the financial
condition of the insurer"
,0"+ The %% shall provide insights into profitability &i"e surplus ( deficit' of the
company including trends based on previous years and the company!s
future plans"
Page 20 of 28
!ection ",: Future Financial Condition
,1", For each -.$, the %% shall provide the required data in Tables ,1", / ,1"+
of %nnexure and shall discuss pointwise the following#
,1",", *n detail the future financial condition of the company"
,1","+ The company!s projected financial statements and solvency
position for next three years, allowing for expected future new
business furnished in table ,1", of %nnexure"
,1","0 The results of stress tests for two plausible adverse scenarios
&i"e" events that could have a negative impact on solvency
position' furnished in table ,1"+ of %nnexure" Two adverse
scenarios must be selected by the company as felt appropriate
for the company!s business based on judgment of the likelihood
of events or combination of events in each of the + scenarios that
could have a negative impact on solvency position of the
company"
,1","1 $riefly the proposed management actions to ensure maintenance
of regulatory solvency even under the adverse conditions
,1"+ %% shall define explicitly the two plausible adverse scenarios assumed in
stress testing"

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!ection "/: %dvise on %ctuarial 6atters
,2", The %% shall provide the details of meetings attended visa vis conducted
in accordance with Regulation &6' of *R<% &%ppointed %ctuary'
Regulations, +999" *f any of the meetings are not attended to, the
reasons thereof"
,2"+ The %% shall discuss the details of the advice provided to the
management in accordance with Regulation &7' of *R<% &%ppointed
%ctuary' Regulations, +999 and any other relevant matter along with
course of action(proposed course of action"
Page 22 of 28
!ection "1# Comments of the +oard of the Insurer
,4", .n each of the chapters above, the insurer shall provide the comments of the
$oard and proposed course of action, if any"
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%ppointed %ctuar&9s Certi:cate
This is to certify that * have considered the data and information provided by the
Company in the preparation of this Financial Condition Report" Reasonable steps have
been taken to ensure the accuracy and completeness of the data"
(%""ointed %ctary#
Countersigned by# (M* A !-O#
Company )eal#
<ate#
Page 24 of 28
Glossar&
," %/era)e <ross "remim : Cross premium ( number of exposures
+" %/era)e net "remim : ?et premium ( ?umber of exposures
0" %/era)e &m insred : Total sum insured ( ?umber of exposures
1" %llocated loss ad1stment e."enses: correspond to those costs that the
insurer is able to assign to a particular claim"
2" %nnaliBed (remim: (For the "r"ose of this re"ort' it is defined as
a# For Regular ;remium policies : 9e)lar "remim amont
"aya4le in a year
4# For )ingle premium policies : &in)le "remim amont A term of
the "olicy
4" !om4ined ratio # ?et commission ratio D expense ratio D ?et incurred claim
ratio
6" !laim Fre8ency : ?umber of incurred claims ( ?umber of exposures
7" !laim &e/erity : Cross &net' *ncurred claim amount ( ?umber of *ncurred
claims
8" !losed claim 5ithot claim "ayment (nm4er#: *ncludes all the claims
that are closed without claim payment"
,9" !losed claim 5ithot claim "ayment (amont# : &For the "r"ose of
this re"ort' includes claim amount of all the claims closed without claim
payment exclusive of allocated loss adjusted expenses and these expenses
should be included in the claims closed with payment &amount'"
,," !losed claim 5ith claim "ayment (nm4er#: *ncludes all the claims that
are closed with claim payment"
,+" !losed claim 5ith claim "ayment (amont#: (For the "r"ose of this
re"ort' includes claim amount of all the claims closed with payment inclusive
of allocated loss ad1sted e."enses of 4oth claims closed 5ith +
5ithot "ayment.
,0" -."ense 9atio # .perating expenses ( Cross written premium
Page 25 of 28
,1" -."osres : %n e."osre is the basic unit of risk that underlies the
insurance premium
,2" Insrance "rofit : =nderwriting profit D *nvestment income on insurance
funds
,4" <ross -arned (remim (<-(# : ;remium from direct business written D
;remium on reinsurance accepted D(%djustment for change in reserve for
unexpired risk (*efinition as "er annal re"ort#
,6" <ross "remim : ;remium from direct business written D ;remium on
reinsurance accepted
,7" <ross claims "aid : Claim amount paid on direct business written D Claim
amount paid on reinsurance accepted business
,8" <ross Incrred claim : Claim amount paid &gross' D Claims outstanding
&*nclusive of *$?R' amount at the end of the Financial Eear &gross' F Claims
outstanding &*nclusive of *$?R' amount at the beginning of the Financial
Eear &gross' (*efinition as "er annal re"ort#
+9" <ross Incrred Loss 9atio : Cross incurred claim ( Cross earned premium
+," <ross claims (aid Loss 9atio # Cross claims paid ( Cross earned premium
++" <ross commission: Commission paid on direct written business D
Commission paid on reinsurance accepted business"
+0" Net -arned (remim (N-(# # ;remium from direct business written D
;remium on reinsurance accepted F ;remium on reinsurance ceded D(
%djustment for change in reserve for unexpired risk (*efinition as "er
annal re"ort#
+1" Net "remim : ;remium from direct business written D ;remium on
reinsurance accepted F ;remium on reinsurance ceded (*efinition as "er
annal re"ort#
+2" Net claims "aid : Claim amount paid on direct business written D Claim
amount paid on reinsurance accepted business FClaim amount received
from ceded business
+4" Net Incrred claim : !laim amount paid &net' D Claims outstanding
&*nclusive of *$?R' amount at the end of the Financial Eear &net' F Claims
Page 26 of 28
outstanding &*nclusive of *$?R' amount at the beginning of the Financial Eear
&net' (*efinition as "er annal re"ort#
+6" Net !ommission # Commission paid with respect to direct business D
Commission paid with respect to Reinsurance accepted F Commission
received with respect to Reinsurance ceded (*efinition as "er annal
re"ort#
+7" Net Incrred Loss 9atio : ?et *ncurred claim ( ?et earned premium
+8" Net claims "aid loss ratio # ?et claims paid ( ?et earned premium
09" Net !ommission ratio # ?et commission ( ?et ;remium
0," Nm4er of Incrred claims : ?umber of settled claims &i"e" claims are
closed with ( without payment' D open claims
0+" O"eratin) e."enses # %s per )chedule 1 of the %nnual Report
00" (remim deficiency reser/e# ;remium deficiency shall be recogni3ed if the
sum of expected claim costs, related expenses and maintenance costs
exceeds related reserve for unearned premium reserve"
01" 9etention ratio # ?et Aritten ;remium( Cross Aritten ;remium
02" 9ene5al $siness : Refer )ection 1 &1"+' of FCR document
04" &al/a)e and s4ro)ation: )alvage represents any amount that the insurer
is able to collect from the sale of damaged property" )ubrogation refers to an
insurer!s right to recover the amount of claim payment to a covered insured
from a thirdparty responsible for the injury or damage
06" &ol/ency ratio : %)B ( R)B &as per Regulations'
07" 'ail len)th # Gstimated time taken for settlement of claim from the date of
loss occurrence
08" Cnder5ritin) "rofit : ?et earned premium F ?et incurred claimsD(?et
Commission.perating expenses
19" Cnallocated loss ad1stment e."enses: are the claim related expenses
but cannot be allocated to a specific claim" Gxamples of =-%G include
salaries, rent, and computer expenses for the claims department of an
insurer"
1," Cnearned (remim 9eser/e (C(9#: % reserve for unexpired risks
shall be created as the amount representing that part of the premium
Page 27 of 28
written which is attributable to, and to be allocated to the succeeding
accounting periods and shall not be less than
Fire business, 29 per cent,
Biscellaneous business, 29 per cent,
Barine business other than marine hull business, 29 per centH %nd
Barine hull business, ,99 per cent,
.f the premium, net of reinsurances, during the preceding twelve
monthsH
Page 28 of 28