8.1. Application

Paragraphs 8.2 to 8.4 apply to General Insurance Business.

8.2. Outstanding Claims Risk Component

(1) An AIFC-Incorporated Insurer’s Outstanding Claims Risk Component is the sum of the amounts obtained by multiplying the AIFC-Incorporated Insurer’s net liability for outstanding claims that falls within each Category of Insurance Business by the percentage applicable to that liability under table D.

Table D Percentage factor— Outstanding Claims Risk Component

2) In this rule:

net liability for outstanding claims means the liability in respect of future claims referred in PINS 8.3.2 (Treatment of value of future claims payments), less any expected reinsurance and non-reinsurance recoveries in respect of that liability as at the Solvency Reference Date.

8.3. AIFC-Incorporated Insurer may apply for different percentages

(1) The AFSA may, by written notice, allow the AIFC-Incorporated Insurer to use percentages other than those in table D if the AFSA is satisfied that:

• (a) adequate mortality and morbidity information exists in respect of that business; and
• (b) the information provides a reasonable basis for reliance on actuarial principles.

(2) The percentages that may be used must be those stated in the notice but may not be lower than 8%.

8.4. Certain contracts not included

(1) If an AIFC-Incorporated Insurer underwrites Contracts of Insurance in Categories 1 and 2 that are Long-Term Insurance Contracts, the AIFC-Incorporated Insurer need not calculate an Outstanding Claims Risk Component in respect of those contracts.

(2) For Contracts of Insurance in Categories 1 and 2 that are Long-Term Insurance Contracts, the AIFC-Incorporated Insurer must calculate a Long-Term Insurance Risk Component.