1. General provisions
1.1. Introduction
1.1.1. Name of rules
These rules are the AIFC Insurance and Reinsurance Prudential Rules (or PINS).
1.1.2. Application of PINS
These rules apply to every Insurer except where otherwise provided.
1.1.3. Key Definitions
(1) An Insurer is an Authorised Firm with a Licence to conduct Insurance Business.
(2) Insurance Business is the business of conducting either or both of the following Regulated Activities: (a) Effecting Contracts of Insurance; (b) Carrying out Contracts of Insurance.
(3) An AIFC-Incorporated Insurer is an Insurer that is incorporated as a legal entity under the laws of the AIFC.
Guidance: Branches
Note that certain of the obligations set out in this rulebook do not apply to Insurers that are Branches of entities established and regulated outside the AIFC. The term AIFC-Incorporated Insurer is used to refer to an Insurer that is incorporated as a legal entity under the laws of the AIFC and thus excludes Branches of legal entities incorporated outside the AIFC.
Guidance: Reinsurance
Note that the term Insurer includes any reinsurer and the term Contract of Insurance includes any Contract of Reinsurance.
1.2. Insurance Business
1.2.1. Types of Insurance Business
(1) General Insurance Business is Insurance Business in relation to General Insurance Contracts.
(2) Long-Term Insurance Business is Insurance Business in relation to Long-Term Insurance Contracts.
1.2.2. Types of Insurance Contracts
(1) A General Insurance Contract is a Contract of Insurance that falls within one of the categories set out in Schedule 1.
(2) A Long-Term Insurance Contract is a Contract of Insurance that falls within one of the categories set out in Schedule 2.
1.3. Classification of Contracts of Insurance
1.3.1. Classification of contracts
An Insurer must, in its own records, classify all Contracts of Insurance carried out by it as Insurer, including all Contracts of Reinsurance entered into by it as cedant, according to the category to which the Contracts of Insurance relate.
1.3.2. Classification of contracts falling into two or more categories
Where a Contract of Insurance relates to more than one category, the Insurer must record separately the portions of the Contract of Insurance that relate to each category, except that immaterial portions need not be separately recorded.
1.4. Restrictions in respect of Insurance Business
1.4.1. Restriction on combining certain kinds of Insurance Business
An Insurer must not carry on, in or from the AIFC, both Long-Term Insurance Business and General Insurance Business unless the General Insurance Business is restricted to General Insurance Categories 1 (accident) and 2 (sickness).
1.4.2. Restriction on Insurers carrying on non-insurance business
(1) An Insurer must not carry on any activity other than Insurance Business unless the activity is directly connected with, or carried on for the purposes of, Insurance Business.
(2) For the avoidance of doubt, Managing Investments is not an activity directly connected with, or carried on for the purposes of, Insurance Business.
1.5. Core obligations of Insurers
1.5.1. Obligation to establish and maintain systems and controls
An Insurer must establish and maintain systems and controls in accordance with the requirements of PINS 2 (Systems and Controls) and GEN 5 (Systems and Controls).
1.5.2. Obligation to maintain a risk management strategy
An Insurer must establish and implement a Risk Management Strategy in accordance with the requirements of PINS 3 (Risk Management Strategy).
1.5.3. Obligation to conduct Own Risk and Solvency Assessment
An AIFC-Incorporated Insurer must conduct an Own Risk and Solvency Assessment and submit a report thereon to AFSA in accordance with the requirements of PINS 4 (Own Risk and Solvency Assessment (ORSA)).
1.5.4. Obligation to maintain Eligible Capital
An AIFC-Incorporated Insurer must at all times maintain Eligible Capital in an amount and of a quality required by PINS 5 (Capital adequacy requirements).
1.5.5. Obligations in respect of Investments
An Insurer must make investments in accordance with the requirements of PINS 6 (Investment).
1.5.6. Obligation to maintain Long-Term Insurance Funds
An Insurer carrying on Long-Term Insurance Business must segregate its Long-Term Insurance assets and liabilities in accordance with PINS 7 (Segregation of Long-Term Insurance assets and liabilities).
1.5.7. Obligations in respect of Assets and Liabilities
An AIFC-Incorporated Insurer must value its assets and liabilities in accordance with the requirements of PINS 8 (Valuation).
1.5.8. Obligation to produce actuarial reports
An Insurer must prepare and submit to the AFSA the actuarial reports that it is required to produce pursuant to the requirements of PINS 9 (Actuarial reporting).
1.5.9. Obligations in respect of groups
An Insurer that is a member of a group must comply with the requirements of PINS 10 (Insurers that are members of Groups).
1.5.10. Obligations in respect of Insurance Business Transfers
An Insurer that is party to an Insurance Business Transfer must comply with the requirements of PINS 11 (Transfer of insurance business).