1. | Technical provisions must be calculated in accordance with acceptable accounting standards, and approved by an actuary reflecting the company’s obligations, and shall include the following technical provisions as a minimum: | | |
a) | Unearned Premium Reserves | | |
b) | Unpaid Claim Reserves | | |
c) | Claims Expense Reserves. | | |
d) | Incurred but not reported Claims Reserves. | | |
e) | Unexpired Risk Reserves. | | |
f) | Catastrophe Risk Reserves. | | |
g) | General Expense Reserves. | | |
h) | Reserves related to protection and savings insurance, such as disability, old age, health, death, medical expenses…etc. | | |
2. | Reserves shall be calculated, as a minimum, in the following manner: | | |
| a. | Unearned Premium Reserves shall represent the unearned portion of gross premiums at the time of valuation and shall be calculated according to the following: | |
| | 1. | Last three months for marine transport. |
| | 2. | 365 days pro rata calculations for all other classes of insurance or 40% of gross premiums. |
| b. | Unpaid and Expense Claims Reserves shall be determined as a total value of all outstanding claims and related expenses for each class of insurance business. | |
| c. | Incurred but not reported Claims Reserves shall be calculated from the total outstanding claims after deducting the reinsurance portion of claims proceeds and according to the following: | |
| | 1. | Fifteen percent (15%) of motor insurance, medical insurance, property insurance, engineering, energy and general accident insurance (excluding liability and personal injuries). |
| | 2. | Twenty percent (20%) of liability and other insurance. |
| | 3. | Twenty-five percent (25%) of reinsurance accepted from other insurance companies. |
In case of non-compliance, SAMA shall be provided with actuarially justified methods to determine these reserves listed in this article.
| d. | Doubtful debt reserves shall be calculated as follow: | |
| | 1. | Ten percent (10%) of the total amounts due from reinsurers exceeding 180 days. |
| | 2. | Fifteen percent (15%) of the total amounts due from the insured exceeding 90 days. |
| | 3. | Twenty-five percent (25%) of the total amounts due from the insured exceeding 180 days. |
| | 4. | Seventy-five percent (75%) of the total amounts of uncollected receivables exceeding 360 days. |
| | 5. | One hundred percent (100%) of any disputed and uncollected receivables. |
3. | General reserves specified in view of the company’s experience. | | |