CIB 2.2.4 Technical provision risk component — Captive Insurers conducting general Insurance Business

(1) The technical provision risk component for a Class 1, Class 2, Class 3 or Class 4 Captive Insurer that conducts General Insurance Business is the amount calculated in accordance with the following formula:

5% × net claims reserve under general Contracts of Insurance,

where net claims reserve, as at a date, is the amount of the Captive Insurer's provisions for:
i. claims incurred but not yet paid as at the date, including claims incurred but not yet reported; and
ii. direct and indirect claims settlement expenses for those claims,
less the amount of reinsurance and other recoveries expected to be received in respect of those claims.
(2) Notwithstanding Rule 2.2.4(1), the Regulator may, by written notice, direct a Captive Insurer (whether on application of the Captive Insurer or on the Regulator's own initiative) to include a particular Contract of Insurance or class of Contracts of Insurance in the Captive Insurer's net claims reserve.