Section 21
of International Insurance and Takaful Order, 2002
Section 21
(1)
Every licensee shall ensure that the realisable value of its assets exceeds the amount of its liabilities by a margin (in this section referred to as the margin of solvency) which shall be prescribed by the Authority by notice in the Gazette, and until so prescribed shall be an amount equivalent to or more than –
(a)
the working funds stipulated in section 6, subject to section 7; or
(b)
18% of the net premium income for the preceding year in respect of the general insurance business of the international insurer, or 2.5% of the actuarial valuation of the liabilities for long-term business, excluding linked long-term business to which section 6(1)(f) shall apply mutatis mutandis for the purposes of this subsection, as at the last valuation date in respect of the long-term business of the international insurer, whichever is the greater, provided that the provisions of section 7 shall apply mutatis mutandis to paragraphs (a) and (b).
(2)
If the margin of solvency of a licensee falls below the amount stipulated in subsection (1), the licensee shall submit to the Authority within one month of the deficiency in the margin of solvency becoming known, or such longer period as the Authority may approve, its short-term financial scheme to make good that deficiency and shall, if the Authority considers the scheme inadequate, effect modifications to it.
20
BLUV as at 14th January 2016
(3)
The licensee shall, within a period approved by the Authority, implement to the satisfaction of the Authority such scheme under subsection (2) as may be approved by the
Authority.
(4)
The margin of solvency in the case of a licensee which carries on international captive insurance business shall be its working funds.
(5)
Subsections (2)(a) and (b) of section 6 shall apply to this section mutatis mutandis.
Separate accounts to be kept by international insurers.