Regulatory Alerts2003-12-05
FMA Circular on Balance Sheet Issues for the Insurance Pool Covering Terrorist Risks
The Austrian Financial Market Authority issued this circular to provide guidance on balance sheet treatment for the insurance pool covering terrorist risks under the Insurance Supervision Act. It mandates that members establish specific provisions under 'Other technical provisions' and accumulate their share annually, ensuring at least 10% is allocated each year until the total amount is reached. The document further clarifies that parallel accumulation of terrorist risk provisions and volatility reserves is prohibited for the same risk category and requires clear identification of co-insurance contracts in financial statements.
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