AA-4.3.1
The FCR must provide an objective assessment of the overall financial condition of the
(a) The actuary responsible for the FCR must comply with the relevant professional standards;
(b) Where relevant, the FCR must include:
(i) A business overview;
(ii) An assessment of the insurance firm 's recent experience and profitability, including as a minimum the experience for the year ending on the valuation date;
(iii) An assessment of all insurance liabilities outlined under Chapter CA-5;
(iv) An assessment of the adequacy of past estimates for all insurance liabilities, particularly where there has been a change in assumptions or in the valuation method adopted for previous valuations;
(v) Where there has been a change in assumptions or in the valuation method from that adopted previously, the effect of those changes on the insurance liabilities and assets arising in respect of those liabilities;
(vi) An explanation of the assumptions used in the valuation process including, without limitation, assumptions made as to inflation and discount rates, future expense rates and ,where relevant, future investment income;
(vii) An assessment of the adequacy and appropriateness of data made available to the actuary by the insurance firm ;
(viii) A description of the procedures undertaken by the actuary to assess the reliability of the data provided;
(ix) The model(s) used by the actuary;
(x) The approach taken to estimate the variability of the estimate; and
(xi) The nature and findings of the sensitivity analyses undertaken;
(c) The establishment of the surplus or deficit on any conventional long-term insurance fund and in the case of a surplus, the amount that is proposed to be transferred to the shareholder fund and available for distribution;
(d) The establishment of the surplus or deficit, if any, for all participants' funds for Takaful firms . In the case of surplus, the amount available for distribution must be specified;
(e) For long-term insurance and Family Takaful, include an assessment of asset and liability management, including the insurance firm 's investment strategy;
(f) An assessment of current and future capital adequacy and a discussion of the insurance firm 's approach to capital management;
(g) An assessment of pricing, including adequacy of premiums;
(h) An assessment of the suitability and adequacy of reinsurance/retakaful arrangements, including documentation of reinsurance/retakaful arrangements and the existence and impact of any limited risk transfer/sharing arrangements;
(i) Where the implications of the report have an adverse impact on the financial condition of the insurance firm , the report must include recommendations on how to address any shortcomings and eliminate any negative trends; and
(j) For overseas insurance firms , the report must be prepared for Bahraini operations, but consideration must be given to the financial position of the head office.
Amended: April 2014
Amended: October 2007
Amended: January 2007
Amended: October 2007
Amended: January 2007