Regulatory Alerts2008-01-01
Added · Updated
Guidelines on Contingency Plan for Insurers
Insurers whose solvency or capital requirement ratio falls below the minimum requirements or target levels prescribed under the Insurance (Long Term Insurance Business Solvency) Rules 2007 and the Insurance (General Insurance Business Solvency) Rules 2007 must submit a contingency plan to the Commission immediately. The plan must include an analysis of the current solvency position, causes for non-compliance, and a detailed proposal for management actions to restore ratios, including capital infusion details, projected financial statements, and sensitivity analyses. Long-term insurers must additionally address mortality, morbidity, and bonus allocation policies within their projections. The insurer is required to monitor the plan by comparing actual results against projections and submit a quarterly report explaining any deviations within one month after the end of each quarter.