Non-Life Insurer Solvency Requirements And Own Funds Calculation Rules

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

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Read the untranslated law here: https://www.vestnesis.lv/ta/id/143865

Financial and capital market Commission Regulation No. 148 of 2006 in Riga on September 15 (financial and capital market Commission Council meeting Protocol No. 41, 5. p.)
Non-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 "non-life insurance solvency requirements and rules for the calculation of own funds" (hereinafter-the rules) take the non-life insurance corporations , the mutual non-life insurance cooperative society, as well as a member of the insurer not affiliates (hereafter referred to as the insurer).
2. The term "financial institution" in the terms used in the law of credit institutions.
3. General use of the term in these regulations comply with the financial and capital market Commission (hereinafter the Commission) of the 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 rules" used terms.
II. the solvency margin calculation 4. Solvency margin is defined as the largest of the indicators calculated on the basis of insurance premiums in accordance with the requirements of paragraph 5, and on the basis of the claims in accordance with the requirements of point 6.
5. the solvency margin calculated on the basis of the insurance premiums shall be carried out in accordance with the following algorithm: 5.1 reporting period gross earned premiums of the signed and about relating to aircraft liability insurance, liability insurance and general liability insurance, is increased by 50 percent;
5.2. the insurer, which has received the license for terrestrial transport owner civil liability compulsory insurance, gross premiums written reduced by the amount of the compulsory civil liability insurance (OCTA) compulsory deductions;
5.3. in the event that the reference period does not coincide with the full accounting year, calculated in the previous full year gross signed and gross earned insurance premiums, adjusted in accordance with 5.1 and 5.2, requirements are added to the corresponding reporting period;
5.4. taking account of the 5.1-5.3 adjustment in all types of insurance gross insurance premiums subscribed total amount compared to the entire class of gross earned premiums. The following statement uses the larger of the two sizes;
5.5. the resulting size is divided by the number of months of operation during the reporting period, but not in the case of the reference year to the preceding financial year and the activities of the reporting period, the number of months in total. The estimated size is multiplied by 12;
5.6. the resulting size is divided into two parts: the first part contains up to 53.1 million. Euro (bonus code) equivalent in dollars, calculated by the Bank of Latvia exchange rate on the last day of the reporting period, while the second part includes the remaining amount;
5.7. are calculated and totaled 18 percent of the first part and the second part from 16 percent;
5.8. in accordance with the requirements of paragraph 5.7 of the amount obtained is multiplied by the coefficient which is calculated as the ratio between the three last financial year, but not in the case of the year — the last three full financial year and during the reporting period, net of claims piekritušaj and piekritušaj of the gross remuneration. This coefficient shall not be less than 0.5.6. Solvency margin calculation based on insurance benefits, shall be carried out in accordance with the following algorithm: 6.1 for the calculation period for this algorithm is considered to be the last three reporting years;
6.2. If the last seven years, the report more than 50 percent of the total gross premiums written represents the premiums in claims for insurance against one or more of such risks as credit, storm, hail and frost, the calculation period is the last of the seven insurers reporting year;
6.3. If the reporting period does not coincide with the full reporting year for the calculation period is considered the last three or 6.2 in the case referred to in the last seven years of reporting and full reporting period;
6.4. If the insurer's operating period is shorter than three or 6.2 in the case referred to in the seven years, the insurer's solvency margin is calculated solely on the basis of the algorithm specified in paragraph 5;
6.5. the algorithm used in the gross amount of the remuneration and gross outstanding claims the amount of technical provisions that apply to aircraft liability insurance, liability insurance and general liability insurance, is increased by 50 percent;
6.6. calculate the total amount of gross remuneration 6.1 – 6.3 specified calculation period;
6.7. to the amount calculated will be added to the gross outstanding claims technical provisions at the end of the reporting period;
6.8. the amount is subtracted from the gross outstanding claims technical provisions, as they were in accordance with 6.1-6.3 requirements set at the beginning of the calculation period;
6.9. the result is divided by the number of months of operation 6.1 – 6.3 specified calculation period and multiplied by 12;
6.10.6.1-6.9. the calculation mentioned in paragraph 1 the resulting amount is divided into two parts: the first part contains up to 37.2 million. Euro (index indemnity) equivalent in dollars, calculated by the Bank of Latvia exchange rate on the last day of the reporting period, while the second part includes the remaining amount;
6.11. are calculated and totaled 26 percent from 23 percent in the first part and the second part;
6.12. the resulting amount is multiplied by the coefficient, calculated as the ratio between the three last financial year, but not in the case of the year — the last three full financial year and during the reporting period, net of claims piekritušaj and piekritušaj of the gross remuneration. This factor cannot be less than 0.5.7.5.7 and 6.11 percent referred to in paragraph shall be reduced by two-thirds of health insurance in the event the following life insurance technical principles: 7.1. insurance premiums are calculated on the basis of sickness tables according to the mathematical method applied in insurance;
7.2. creating the technical provisions, take into account the age of the insured persons gain factor;
7.3. technical reserves of sufficient amount has been received to create increased insurance premiums;
7.4. the insurer may terminate the insurance policy before the end of the third year of insurance;
7.5. the insurance contract provides for the possibility of increasing premiums or reducing the sum insured applicable contracts.
8. If the solvency margin calculated in accordance with paragraphs 4-7, is lower than the previous year calculated solvency margin, the solvency margin is at least equal to the previous year calculated solvency margin, multiplied by the coefficient, calculated as the ratio between the net outstanding claims technical provisions at the end of the reporting period and the net outstanding claims technical provisions in the previous reporting year. Rate must be higher than 1. If the end of the accounting year calculated solvency margin, multiplied by that coefficient, is lower than at the end of the reporting period calculated solvency margin, the solvency margin is the solvency requirements of the reporting period.
III. Non-life insurance company and mutual non-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 Equalization reserve;
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, shares or part number.
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 the insurance undertaking or the authorisation by the Commission. The Commission allows 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;
10.1.3. the loan agreement may be amended only with the prior written authorisation of the Commission;
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 prior written authorisation of the Commission's 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 Equalization reserve;
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. concluding questions 14 to 1 January 2007 this provision in paragraph 5.6 of the bonus index 53.1 million. the euro apply the bonus index instead of 50 million. euro.
15. Until 1 January 2007 this rule 6.10 reimbursement referred to in paragraph 37.2 million index. Euro site apply remuneration index 35 million. euro.
16. With the entry into force of these regulations shall lapse at the Council by the Commission on 28 May 2004 decision No 111 approved "non-life insurance solvency requirements and own funds calculation rules".
Vi. the Informative reference to European Union Directive 17. Rules included provisions arising from the European Union Directive 2002/13/EC "amendments European Parliament and Council Directive 73/239/EEC on non-life insurance undertakings solvency margin requirements."
Financial and capital market Commission President When the U.