Outstanding Claims Provision net of RI ROutstanding Claims Provision net of RI Recoveries (undiscounted)

Outstanding Claims Provision net of RI Recoveries (undiscounted)

The Outstanding Claims Provision is to be disclosed by type of business (direct business and inward reinsurance business), net of reinsurance and non reinsurance recoveries, as at the reporting date.

The Outstanding Claims Provision relates to the liability provision that has been recognised by the insurer in GRF 300.0 Statement of Financial Position, however for the purposes of this form, the Outstanding Claims Provision must be undiscounted.

For the purposes of this form the total of the OCP for the current financial year (on an undiscounted basis) is to be allocated across the respective time buckets specified on the form. Accordingly, each year that this form is completed the OCP that is recorded for the respective time buckets will likely change as this is reassessed.

For the “Direct business” and “Reinsurance” business, amounts are to include all Outstanding Claims Provisions associated with:

• the insurance business written directly by the insurer;
• reinsurance business under the “Reinsurance” section of Type of Business column. Inward reinsurance includes amounts, which relate to inward facultative reinsurance and to inward treaty reinsurance.
• business sourced through underwriting pools or Joint Ventures, or portfolio transfers/acquisitions.

Accident Year

Direct writers of insurance business are to complete this form based on accident year. This refers to the financial year that the losses/claims associated with individual policies are incurred.

Underwriting Year

Insurers writing reinsurance business are to complete this form based on accident year. This refers to the financial year of the insurer in which the policy incepts, regardless of when the premiums and claims are actually reported, booked or paid. For example, the 2005 underwriting year for an insurer with a 30 June balance date includes premiums and claims (both paid and outstanding) relating to policies incepting in the period 1 July 2005 to 30 June 2006. For an insurer with a 31 December balance date, the 2005 underwriting year includes premiums and claims (both paid and outstanding) relating to policies incepting in the period 1 January 2005 to 31 December 2005.

Reserve Release

Reserve release refers the occasions when a provision was created/posted for a particular prior financial year and subsequently it is found that this provision will be more than is required to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer releases these excess provisions and they become profits in the current financial year of the insurer.