Overview

Question 1

What is the definition of a non-life insurer?

Answer 1

An insurer which is not insuring against life perils but insures non-life related perils as defined by the governing insurance legislation

Question 2

State 2 examples of a non-insurance entity to which the valuation methods covered in APN 401 may apply

Answer 2

1. A company selling motor vehicle maintenance plans

2. Road Accident Fund

Question 3

Define technical provisions

Answer 3

The amount set aside to meet all labilities arising out of contracts and includes both expired and unexpired risk

Question 4

What should insurers follow for published financial reporting?

Answer 4

The appropriate insurance accounting standard

Question 5

What should insurers follow for statutory reporting?

Answer 5

Non-life insurers are required to comply with all prevailing legislation at the time of reporting

Question 6

What other guidance should a member follow?

Answer 6

1. The reserving policy of the non-life insurer where it exists
2. Any other governance around the reserving process

Question 7

What key characteristics of the business processes should the member consider that may materially affect the valuation? (7)

Answer 7

1. Policy wording - nature of coverage, including any unusual T&Cs
2. Underwriting processes - nature and mix of risks undertaken
3. Benefits payable under policy terms or by virtue of legislation, including deductibles and limits
4. Reinsurance arrangements, including any special or unusual features
5. Change in data quality or interpretation
6. Changes of staff in key positions
7. External factors - Economic, IT, medical, environmental, regulatory, social changes and trends that may affect the TPs