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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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Prudential — Insurance Business Module (PIN) [VER15/01-18]
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  • PIN 2.3 Management of particular risks

    • PIN 2.3.1

      An Insurer must develop, implement and maintain a risk management system to identify and address balance sheet and market risk, including but not limited to:

      (a) reserving risk;
      (b) investment risk (including risks associated with the use of derivatives);
      (c) underwriting risk;
      (d) claims management risk;
      (e) product design and pricing risk; and
      (f) liquidity management risk.

      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.3.2

      An Insurer must develop, implement and maintain a risk management system to identify and address credit quality risk.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.3.3

      An Insurer must develop, implement and maintain a risk management system to identify and address the non-financial or operational risk of that Insurer, including but not limited to:

      (a) technology risk (including processing risks);
      (b) reputational risk;
      (c) fraud and other fiduciary risks;
      (d) compliance risk;
      (e) outsourcing risk;
      (f) business continuity planning risk;
      (g) legal risk; and
      (h) key person risk.

      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.3.4

      An Insurer must develop, implement and maintain a risk management system to identify and address reinsurance risk. Reinsurance risk refers to risks associated with the Insurer's use of reinsurance arrangements as cedant.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.3.5

      Without limiting the generality of PIN Rule 2.3.4, an Insurer's risk management system in respect of its use of reinsurance arrangements must include the development, implementation and maintenance of a written reinsurance management strategy, appropriate to the size and complexity of the operations of the Insurer, defining and documenting the Insurer's objectives and strategy in respect of reinsurance arrangements.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN 2.3.6

      An Insurer must develop, implement and maintain a risk management system which includes an explicit asset-liability management (ALM) policy, which must clearly specify the nature, role and extent of ALM activities and their relationship with product development, pricing functions and investment management.

      [Added] DFSA RM99/2012 (Made 24th July 2012) [VER12/07-12]

      • PIN 2.3.6 Guidance

        1. An Insurer's ALM policy should be appropriate taking into account the nature, scale and complexity of its ALM risks.
        2. The ALM policy should include details as to how:
        (a) the investment and liability strategies adopted by the Insurer allow for the interaction between assets and liabilities;
        (b) the correlations are taken into account;
        (c) the liability cash flows will be met by cash inflows; and
        (d) the valuations of assets and liabilities will change under an appropriate range of different scenarios.
        [Added] DFSA RM99/2012 (Made 24th July 2012) [VER12/07-12]

    • PIN 2.3.7

      For the purposes of PIN Rule 2.3.6, an Insurer may:

      (a) take into account:
      (i) its position within the Group,
      (ii) the materiality of the risk to which it is exposed because of its membership of the Group, and
      (iii) the access that it has to the systems and controls of other members of its Group and any information produced by them or by Associates; and
      (b) consider together Groups whose Holding Companies are all members of the same Group, except for any Group of which the Insurer is the Holding Company.
      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
      [Deleted] RM46/2007 (Made 5th July 2007). [VER6/07-07]

      • PIN 2.3.7 Guidance

        The effect of PIN Rule 2.3.7(b) is that, where an Insurer is a member of two or more Groups that are also sub-Groups of a single Group, the Insurer may consider that Group as a whole for the purposes of this section. An Insurer that is a Holding Company is however still required to give specific consideration to the risks to which it is exposed as Holding Company.


        Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
        [Deleted] RM46/2007 (Made 5th July 2007). [VER6/07-07]