CIB 7.3 CIB 7.3 Obligations of Captive Insurers conducting Long-Term Insurance Business
This Rule applies to Captive Insurers conducting Long-Term Insurance Business.
Every Captive Insurer must arrange for an actuarial investigation to be made into its financial condition in respect of its Long-Term Insurance Business. Such investigation must include a determination of the liabilities of the Captive Insurer attributable to its Long-Term Insurance Business and an investigation of the assets and liabilities of every Long-Term Insurance Fund maintained or deemed to be maintained by it (including a determination of surplus in each such fund).
An investigation of the type set out in Rule 7.3.2 must be performed at the end of every annual reporting period of the Captive Insurer.
An actuarial investigation under this Rule must be performed by an Actuary who has the qualifications set out in Rule 7.6, and must be conducted according to principles approved by the Regulator.
When a Captive Insurer arranges for an actuarial investigation under this Rule, the Captive Insurer must provide to the Regulator a written report of the investigation prepared by the Actuary conducting the actuarial investigation. Such report must be prepared no later than four months from the date of the actuarial investigation and must be submitted to the Regulator in accordance with Rule 7.4.2.
This report must provide details of, in respect of each Class of Business:(a) the product range (including details of any significant changes in products during the period to which the report relates);(b) any discretionary charges and benefits, options and guarantees, and reversionary bonus entitlements, where such features are included in a product;(c) reinsurance arrangements;(d) significant aspects of the recent experience of the Insurer, including, where relevant, a commentary on significant deviations of actual experience compared to the assumptions made in the previous valuation;(e) the Actuary's estimate of the value of Long-Term Insurance liabilities, determined in accordance with Chapter 6;(f) the method and assumptions used by the Actuary in the valuation process, including, where relevant, a commentary on significant differences between the assumptions used and recent actual experience of the Insurer and a description of any non- standard method;(g) any expense reserves, mismatching reserves and any other special reserves included by the Actuary in the value of the Long-Term Insurance liabilities, or recommended by the Actuary to be maintained, although not included in the valuation;(h) a determination of the value of surplus in the Long-Term Insurance Fund, before any distribution of such surplus;(i) a description of the Invested Assets used to determine the risk-adjusted yield on which the discount rate used in the valuation was based;(j) the adequacy and appropriateness of data made available to the Actuary by the Captive Insurer;(k) procedures undertaken by the Actuary to assess the reliability of the data;(l) the model or models used by the Actuary;(m) the approach taken to estimate the variability of the estimate;(n) the sensitivity analyses undertaken;(o) any significant changes to the matters reported on during the period since the previous valuation, including in the case of the matters referred to in (f), and otherwise where relevant, an estimate of the effect of these changes on the Long- Term Insurance liabilities as at the Reference Date; and(p) commentary on any other factors affecting the valuation.
Subject to Rule 7.3.8, where a Captive Insurer carries on Direct Long-Term Insurance Business, the report referred to in Rule 7.3.5 must include the information set out in Rule 7.3.6 segregated by the jurisdiction in which it is carried on.
Where business in a jurisdiction is of limited significance, disclosures may, at the discretion of the Actuary, be aggregated for those jurisdictions.