Life Insurer Solvency Requirements And Own Funds Calculation Rules

Original Language Title: Dzīvības apdrošinātāju maksātspējas normas un pašu līdzekļu aprēķināšanas noteikumi

Read the untranslated law here: https://www.vestnesis.lv/ta/id/143979

Financial and capital market Commission regulations No 149 in Riga 2006 September 15 (financial and capital market Commission Council meeting Protocol No. 41, 6. p.)
Life insurer solvency requirements and own funds calculation rules Issued in accordance with the financial and capital market Commission of law article 6, paragraph 1 of article 7, paragraph 1, first subparagraph, and article 17, paragraph 2, and the supervision of insurance undertakings and article 30 of the law, the first paragraph and the second paragraph of article 31 of the i. General questions 1. Solvency requirements and own funds calculated in accordance with the "life insurer solvency requirements and rules for the calculation of own funds" (hereinafter-the rules) take the life insurance corporations , mutual life insurance cooperative society, as well as a member of the life insurance subsidiaries (hereafter referred to as the insurer).
2. the terms used in the rules: 2.1 the gross risk capital — size, formed by subtracting from the gross amounts payable to policyholders in the event of death, in accordance with the direct or the reinsurance contract concluded in gross life insurance technical reserves;
2.2. the net risk capital: the size, the less the net amounts payable by the policyholder in the event of death, in accordance with the direct or the reinsurance contracts, net of life insurance technical reserves;
2.3. financial institution — the law of credit institutions;
2.4. the use of other terms comply with the financial and capital market Commission Council of 13 January 2006 decision No 21 approved "insurance company, mutual insurance cooperative society and member of the insurer not affiliate annual report and the consolidated annual report and the provisions of the financial and capital market Commission of the Council of 3 September 2004 decision No 198 in approved" life insurers reporting rules "used terms.
3. The solvency requirements and own funds calculation is carried out for the purposes of classification of insurance contracts and insurance contracts. All contracts are considered insurance contracts in their legal meaning.
II. the solvency margin calculation 4. Life insurer solvency margin is defined as the life insurance solvency margin calculated in accordance with paragraph 5-7 requirements and solvency rules for accident and health insurance, calculated in accordance with the requirements of paragraph 8.
5. the Solvency margin for life insurance with savings and life insurance contracts without the provision, as well as the regular cost of insurance contracts (annuit) direct business and reinsurance, except taken to the market the pies wound life insurance contracts are in accordance with 5.1 and 5.3 requirements calculated size: 5.1.4 percent of the contract referred to in paragraph 5 of the gross life insurance technical reserves is multiplied by a coefficient (R) obtained as a relation between this agreement NET life insurance technical reserves and this contract gross life insurance technical reserves at the end of the reporting period. This rate may not be less than the margin;
5.2. point 5 of these treaties, of which the gross capital risk is not a negative size is calculated: 5.2.1 0.1 percent of the gross risk capital life insurance contracts without the provision of building covering the risk of death and is with an original maturity of up to three years (including), 5.2.2. risk 0.18 percent of gross capital life insurance contracts without the provision of building covering the risk of death and is with original maturity over three years but not more than five years, 0.2 percent of 5.2.3. the risk of gross capital other contracts;
5.3. in accordance with 5.2.1.-the requirements of section 5.2.3 calculate the size of the total multiplied by a coefficient (K), calculated as the ratio between the net risk capital and gross capital risk. This coefficient shall not be less than 0.5.6. Unit-linked life insurance, direct and reinsurance solvency margin adopted is in accordance with 6.1 – 6.4 requirements calculated size: 6.1 if the insurer has taken the investment risk with policyholders, then calculate the 4 percent of the gross life insurance technical reserves relating to these contracts. The resulting size is multiplied by a coefficient (R1) obtained as the ratio between this agreement NET life insurance technical reserves and this contract gross life insurance technical reserves at the end of the reporting period. This rate may not be less than the margin;
6.2. If the insurer has not entered into the investment risk and the sum stated in the contract, intended to cover the administrative expenses is fixed for a period of more than five years, the calculation of 1 percent of gross life insurance technical reserves relating to these contracts. The resulting size is multiplied by a coefficient (R2) obtained as the ratio between this agreement NET life insurance technical reserves and this contract gross life insurance technical reserves at the end of the reporting period. This rate may not be less than the margin;
6.3. If the insurer has not entered into the investment risk and the sum stated in the contract, intended to cover the administrative expenses is not fixed for a period of more than five years, then calculate the 25 percent from the last reporting period for administrative expenditure that apply to these contracts. This reference period for calculation of the administrative expenditure is divided by the number of months of operation in the last reporting period and multiplied by 12;
6.4. If the insurer against the risk of death, the contracts that the gross capital risk is not a negative size, calculation of 0.3 percent of the gross risk capital and the value obtained total multiplied by a factor (K1), calculated as the ratio between the net risk capital and gross capital risk. This coefficient shall not be less than 0.5.

7. Contracts which lay down the obligations of the insurer admitted at the end of the period of insurance for a lump-sum or periodic payments of insurance premiums (cost of capital operations), the required solvency margin shall be equal to 4 percent of the gross contract life insurance technical reserves, multiplied by the coefficient (R3), obtained as a relation between this agreement NET life insurance technical reserves and this contract gross life insurance technical reserves at the end of the reporting period. This rate may not be less than the margin of solvency margin 8 accident and health insurance in which the insurer out of life as any insurance, as well as individual accident and health insurance if the insurer has received the license for these types of insurance are calculated in accordance with the financial and capital market Commission of the Council of 28 May 2004 decision No 111 approved "non-life insurance solvency requirements and own funds calculation".
III. Life insurance company and the mutual life insurance cooperative societies own funds calculation 9. Own funds calculation shall include the following: 9.1. insurance company on the company's share capital, paid in the form of reduced dividends on preferred shares with accumulation;
9.2. the share premium;
9.3. mutual insurance cooperative society members paid shares;
9.4. reserve capital and other reserves, except in technical reserves, revaluation reserve and the reserve for equalization estimates for participation in profits;
9.5. the previous year audited retained profits/losses;
9.6. reduction: 9.6.1. insurance company in the form of a joint stock company or mutual insurance cooperative society (hereinafter – insurance company) owned the existing own shares or shares, intangible assets and the loss of the reporting period, 9.6.2. investments in credit institutions, financial institutions, insurance companies and reinsurers ' capital and reserves and subordinated capital in the insurance company directly or indirectly owns 20 percent or more of the share capital or the total voting shares , or part of the number of shares.
10. in the calculation of own funds in addition to include: 10.1. subordinated capital, loans, insurance companies that deal in writing the legislation clearly states that the lender is entitled to reclaim to repay the loan before the deadline only in the event of liquidation of an insurance company and the lender's claims will be satisfied only after all other creditors, but before the General requirements, and the loan agreement shall meet the following conditions: 10.1.1 determine term subordinated loan capital to be repaid the initial time limit shall not be less than five years or a perpetual subordinated loan capital in the Treaty that it be released no sooner than five years after notification of the receipt of the notice of loan, 10.1.2. the loan agreement does not establish other conditions for early repayment of the loan, except for the liquidation of an insurance company or with the financial and capital market Commission's permission. Financial and capital market Commission permit the insurance company to repay the loan before the deadline on its own initiative, after the repayment of the loan is to be executed under the supervision of insurance undertakings and article 31 of the law on the first and second paragraphs of the solvency requirements laid down in the loan contract, 10.1.3. rules may be amended only with the financial and capital market Commission's prior written authorization;
10.2. preferred shares with dividend accumulation, provided that the insurance company in the event of liquidation of the shares is repaid after the claims of all other creditors, but before any other shareholders, URt.sk.: 10.2.1. deadline of the preference shares with a dividend accrual, 10.2.2. perpetual preferred shares with dividend accumulation that meets the following conditions: 10.2.2.1. they can not be reimbursed on the bearer's initiative or without the financial and capital market Commission's prior written permission 10.2.2.2. emission prospectus, provided that the insurance undertaking has the right to suspend dividends and debts paid, if the insurance company after such payment formed insufficient own resources.
11. The own funds of an insurance company shall be included in the calculation of the fully specified period received refunds, and perpetual subordinated capital and fixed-term and open-ended to preference shares with a dividend accrual to the extent that the total amount does not exceed 50 percent of the less-from own funds calculated in accordance with the requirements of paragraph 9, or in accordance with paragraph 4 to 8 calculated solvency margin requirements. Period specified in the subordinated capital is repaid or a fixed period to preference shares with a dividend accrual amount shall not exceed 25 percent of the less-from own funds calculated in accordance with the requirements of paragraph 9, or in accordance with paragraph 4 to 8 calculated solvency margin requirements.
12. Subordinated capital, which is included in the calculation of own funds in the last five years before the expiry of the loan each year will be reduced by 20 percent.
IV. the member insurers Not affiliates own funds calculation is Not a member insurer's 13 branches included in the calculation of own funds: 13.1. other reserves, except in technical reserves, revaluation reserve and the reserve for equalization estimates for participation in profits;
13.2. the previous year audited retained profits/losses;
13.3. reduction: 13.3.1. intangible assets, 13.3.2. period loss, State investments 13.3.3. insurers, who created this branch, as well as its subsidiary undertakings, and on demand to credit institutions, which is not a member of the insurer, who created this affiliate, subsidiary, 13.3.4. requirements, except for the requirements of the insurance and reinsurance operations, against a member insurer who created this branch, as well as to its subsidiary companies.
V. closing question

14. With the entry into force of these regulations shall lapse at the Council by the Commission on 28 May 2004 decision No 117 approved the "life insurer solvency requirements and own funds calculation rules".
Vi. the Informative reference to European Union Directive 15. Provisions included in the law arising from the European Union directives 2002/83/EC concerning life assurance ".
Financial and capital market Commission President When the U.