Regulatory Alerts2017-01-01
Decision No. 535 of 2017 Regarding the Basis for Determining Estimated Loss Rates for Reverse Reinsurance Provisions
The General Authority for Financial Supervision (GAFI) issued Decision No. 535 of 2017 to establish the basis for calculating reverse reinsurance provisions under Article 25 of the Executive Regulations of Insurance Law No. 10 of 1981. The decision mandates that property and liability insurance branches set aside provisions equivalent to 75% of natural disaster and riot premiums, plus a variable percentage of net earned premiums based on actual versus estimated loss ratios, capped at 50% of pre-provision surplus. Insurance companies are required to submit actuarially certified estimated loss rates annually by the middle of the second month following the fiscal year-end, with the decision applying to financial statements starting from the year ending June 30, 2017.