Question

What is the requirement for insurers regarding outstanding claims provisions under the IRDA (General Insurance – Reinsurance Regulations) 2000?

a.

Insurers are not required to make outstanding claims provisions.

b.

Provisions are only required for reinsurance arrangements received from Brokers.

c.

Provisions are required for every reinsurance arrangement, either based on loss information advices or actuarial estimation.

d.

Provisions are only required for reinsurance arrangements where loss information advices are not received.

Answer: (c).Provisions are required for every reinsurance arrangement, either based on loss information advices or actuarial estimation. Explanation:Every insurer is required to make outstanding claims provisions for every reinsurance arrangement accepted, either based on loss information advices received from Brokers / Cedants or, where such advices are not received, on an actuarial estimation basis. Additionally, an appropriate provision for incurred but not reported claims on the reinsurance accepted portfolio is required on an actuarial estimation basis.

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Q. What is the requirement for insurers regarding outstanding claims provisions under the IRDA (General Insurance – Reinsurance Regulations) 2000?

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