Regulatory Alerts2024-12-31
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Central Bank of Jordan: Appendix 3 - Basis for Calculating the Policy Reserve for Life Insurance
The Central Bank of Jordan mandates that life insurance policy reserves be calculated using conservative actuarial principles, prospective methods, and specific assumptions regarding mortality, morbidity, and expenses. The regulation sets strict limits on interest rates, capping Jordanian Dinar-denominated liabilities at 6.5% annually or specific government bond returns, and requires a 2.5% reduction on pre-tax investment returns. It further restricts future premium valuations, defines acquisition cost adjustments up to 5% of relevant capital, and prohibits negative policy reserves or reductions for voluntary lapses.
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