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In
exercise of the powers conferred by clause (g) of sub-section (2)
of section 114A of the Insurance Act, 1938 (4 of 1938), the Authority,
in consultation with the Insurance Advisory Committee, hereby makes
the following regulations, namely--
1.
Short title and commencement
(1)
These regulations may be called the Insurance Regulatory and Development
Authority (Actuarial Report and Abstract) Regulations, 2000.
(2)
They shall come into force from the date of their publication in
the Official Gazette.
2.
Definitions
In
these regulations, unless the context otherwise requires--
(a) "Act" means the Insurance Act, 1938 (4 of 1938);
(b)
"Authority" means the Insurance Regulatory and
Development Authority established under sub-section (1) of section
3 of the Insurance Regulatory and Development Authority Act, 1999
(41 of 1999);
(c)
"extra premium" means a charge for any risk not
provided for in the minimum contract premium;
(d)
"group business" means those insurance contracts
which are group policies as mentioned under sub-section (2) of section
4 of the Act;
(e)
"guarantees" means the terms in regard to benefits
or premiums or charges, which may not be altered during the currency
of the policy;
(f)
"individual business" means individual insurance
contracts issued on single/joint lives;
(g)
"inter valuation period" means, as respects any
valuation, the period to the valuation date of that valuation from
the valuation date of the preceding valuation in connection with
which an abstract was prepared under the Act or under the enactments
repealed by the Act, or, in a case where no such valuation has been
made in respect of the class of business in question, from the date
on which the insurer began to carry on that class of business;
(h)
"maturity date" means a fixed date on which benefit
may become payable either absolutely or contingently;
(i)
"non-par policies" or "policies without participation
in profits" means policies which are not entitled for any share
in surplus (profits) during the term of the policy;
(j)
"office yearly premium" means regular premium (excluding
extra premiums which are required to be shown separately) payable
by the policy-holder to secure the basic benefits under the policy
in a policy year;
(k)
"options" means the rights available to a policyholder
under a policy;
(l)
"par policies" or "policies with participation
in profits" means policies which are not non-par policies as
defined under clause (i);
(m)
"policies with deferred participation in profits"
means policies entitled for participation in profits after a certain
period from the date of commencement of the policy;
(n) "premium term" means the period during which premiums
are payable;
(o)
"riders" or "rider benefits" means add-on
benefits, which are in addition to basic benefits under a policy;
(p)
"valuation date" means as respects any valuation
the date as at which the valuation is made;
(q)
all words and expressions used herein and not defined but
defined in the Insurance Act, 1938 (4 of 1938), or in the Insurance
Regulatory and Development Authority Act, 1999 (41 of 1999), or
in any Rules or Regulations made thereunder shall have the meanings
respectively assigned to them in those Acts or Rules or Regulations.
3.
Procedure for preparation of Actuarial Report and Abstract
(1)
The Abstracts and Statements must be so arranged that the number
and letters of the paragraphs correspond with Regulation 4.
(2)
The Abstracts and Statements shall be furnished to the Authority,
within nine months from the end of the period to which they refer
to, in accordance with sub-section (1) of section 15 of the Act.
(3)
Four copies of the Abstracts and Statements shall be furnished to
the Authority in accordance with sub-section (1) of section 15 of
the Act, and one of the four copies so furnished shall be signed
by the persons as mentioned in sub-section (2) of section 15 of
the Act.
(4)
There shall be appended to every such Abstract and Statement--
(a)
a certificate signed by the principal officer that full and
accurate particulars of every policy under which there is a liability,
either actual or contingent, has been furnished to the appointed
actuary for the investigation; and
(b)
a certificate signed by the appointed actuary with his remarks,
if any, to the effect that--
(i)
the data furnished by the principal officer has been included in
conducting the valuation of liabilities for the purpose of investigation;
(ii)
reasonable steps have been taken to ensure the accuracy and completeness
of the data;
(iii)
he has complied with provisions of the Act;
(iv)
he has complied with guidance notes issued by the Actuarial Society
of India with the concurrence of the Authority;
(v)
in his opinion, the mathematical reserves are adequate to meet the
insurer's future commitments under the contracts, and the policyholders'
reasonable expectations.
4.
Requirements applicable to Abstracts and Statements
(1)
Abstracts and statements shall be prepared separately in respect
of--
(a)
Linked Business;
(b)
Non-Linked Business; and
(c)
Health Insurance Business.
(2)
An insurer shall prepare the following statements which shall be
annexed to the abstract prepared in accordance with these regulations,
namely--
(a)
in respect of Linked Business,--
(i)
Form LB-1;
(ii)
Form LB-2;
(iii)
Form LB-3;
(iv)
Form LB-4;
(v)
Form IA.
(b)
in respect of Non Linked Business,--
(i)
Form NLB-1;
(ii)
Form NLB-2;
(iii)
Form DD;
(iv)
Form DDD;
(v)
Form DDDD;
(vi)
Form IA.
(c)
in respect of Health Insurance Business,--
(i) Form
LB-1;
(ii) Form
LB-2;
(iii) Form
LB-3;
(iv) Form
NLB-1;
(v) Form
IA.
(d)
Summary statements,--
(i)
Form K;
(ii)
Form IRDA-AA as specified under Regulation 4 of Insurance Regulatory
and Development Authority (Assets, Liabilities and Solvency Margin
of Insurers) Regulations, 2000;
(iii)
Form H;
(iv)
Form I;
(v)
Statement of Composition and Distribution of surplus in respect
of policyholders' fund as specified under Regulation 8.
(3)
Each Abstract shall show--
(a)
The Valuation Date
: The date on which valuation (investigation) is done;
(b)
New Products :
A brief description of new products introduced during the inter-valuation
period giving salient features;
(c)
Foreign Operations
: A brief description of the foreign operations of the insurer,
during the inter-valuation period;
(d) Valuation Method : A brief description of,--
(i)
the methods adopted in the determination of mathematical reserves
in respect of insurance products;
(ii)
the method by which age at entry, premium term, maturity date, valuation
age, period from the valuation date to the maturity date, have been
treated for the purpose of valuation;
(iii)
the method of allowing for,
(i)
incidence of premium income; and
(ii)
premiums payable otherwise than annually.
(e) Valuation bases :
(i)
Valuation parameters used in the valuation shall be furnished in
the manner as specified in the table hereunder--
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Description
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Morta-lity
basis used
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Mor-bidity
basis used
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Inflation
rate
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Interest
rate
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Expen-ses
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Future
bonuses if any
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Others
please specify
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Remarks
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(1)
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(2)
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(3)
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(4)
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(5)
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(6)
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(7)
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(8)
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(9)
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(a)
Insurance Product:
(i) Regular premium
(ii)
Single premium and fully paid up
(iii)
Reduced paid up
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(b)
Insurance product:
(i) Regular premium
(ii) Single
premium and Fully paid up
(iii) Reduced paid
up
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(ii)
Expenses
related to premiums, sum assured, annuity, etc., and per policy
shall be specified separately under column (5) of the table;
(iii)
Items such as terminal bonus, in case of with profit contracts,
management charges, etc., in respect of linked business, shall be
specified under column (8) of the table.
(f)
Other Adjustments (Provisions) : The methods by which
provision, if any, has been made for the following matters, including
a statement of bases wherever necessary,--
(i)
Policies in respect of which extra premiums have been charged on
account of underwriting of under-average lives that are subject
to extra risks such as occupation hazard, over-weight, under-weight,
smoking history, health, climatic or geographical conditions;
(ii)
Lapsed policies not included in the valuation but under which a
liability exists or may arise;
(iii)
Options available under individual and group insurance policies;
(iv)
Guarantees available to individual and group insurance policies;
(v)
The rates of exchange at which benefits in respect of policies issued
in foreign currencies have been converted into Indian Rupees and
what provision has been made for possible increase of mathematical
reserves arising from future variations in rates of exchange.
(g)
Further Information : The following information shall be appended--
(i)
Returns on Assets as specified under Regulation 5.
(ii)
Distribution of surplus as specified under Regulation 6.
(iii)
Principles adopted in distribution of surplus as specified under
Regulation 7.
(iv)
Negative Reserves and Guaranteed Surrender Value Deficiency Reserves
as specified under Regulation 9.
(v)
Miscellaneous, if any.
5.
Returns on assets
(1)
The average gross rates of interest yielded by the assets may be
determined expressing the investment income as percentage of the
mean fund. [i = 2 x I / (A + B--I); where i is the gross yield;
I = Investment Income; A = the assets at the beginning of the financial
year, and B = the assets at the end of the financial year; Investment
Income (shown in the Revenue Account) should include the amount
of the unrealised gain taken into revenue account, A and B have
to be adjusted value of assets shown in the Balance Sheet].
(2)
The average gross rates of interest, referred to under sub-regulation
(1), shall be furnished for each fund maintained by an insurer.
6.
Distribution of surplus
The
basis adopted in the distribution of surplus as between the shareholders
and the policyholders, and whether such distribution was determined
by the instruments constituting the company, or by its regulations
or by-laws or how otherwise shall be mentioned.
7.
Principles adopted in distribution of profits
The
general principles adopted in distribution of profits among policyholders,
including statements on following points, shall be furnished:
(i)
Whether the principles were determined by instruments constituting
the insurer, or by its regulations or by-laws or how otherwise.
(ii)
The number of years premium to be paid, period to elapse
and other conditions to be fulfilled before a bonus is allotted.
(iii)
Whether
the bonus is allocated in respect of each year's premium paid, or
in respect of each calendar year or year of assurance or how otherwise,
and
(iv)
Whether the bonus vests immediately on allocation, or, if
not, conditions of vesting.
8.
Statement of composition of surplus and distribution of surplus
in respect of policyholders' funds
(1)
A statement, showing total amount of surplus arising during the
inter-valuation period, and the allocation of such surplus, shall
be furnished separately for participating business and for non-participating
business, with the particulars as mentioned below:
Composition
of surplus:
(a) Surplus shown under Form I;
(b) Interim bonuses paid during the inter-valuation period;
(c) Terminal bonuses paid during the inter-valuation period;
(d)
Loyalty additions or other forms of bonuses, if any, paid
during the inter-valuation period;
(e)
Sum transferred from shareholders' funds during the inter-valuation
period;
(f)
Amount of surplus, from policyholders' funds, brought forward
from preceding valuation;
(g) Total surplus [total of the items (a) to (f)].
Distribution
of surplus:
Policy
holders' Fund--
(a)
To Interim Bonuses paid;
(b)
To Terminal Bonuses;
(c)
To Loyalty Additions or any other forms of bonuses, if any;
(d)
Among policyholders with immediate participation giving the
number of policies which participated and the sums assured thereunder
(excluding bonuses);
(e)
Among policyholders with deferred participation, giving the
number of policies which participated and the sums assured thereunder
(excluding bonuses);
(f)
Among policyholders in the discounted bonus class giving
the number of policies which participated and the sums assured thereunder
(excluding bonuses);
(g)
To every reserve fund or other fund or account (any such
sums passed through the accounts during the inter-valuation period
to be separately stated);
(h)
As carried forward un-appropriated.
Shareholders'
Fund:
(i)
To the shareholders' funds (any such sums passed through
the accounts during the inter-valuation period to be separately
stated);
Totals:
(j)
Total Surplus allocated: [total of the items (a) to (i)].
(2)
Specimen of bonuses allotted to policies for one thousand rupees
together with the amounts apportioned under the various manners
in which the bonus is receivable, for each type of participating
product, shall be furnished.
9.
Negative Reserves and Guaranteed Surrender Value Deficiency Reserves
A
brief description of treatment adopted for negative reserves and
guaranteed surrender value deficiency reserves shall be furnished.
10.
Notes applicable to all Forms
(1)
Each form mentioned under sub-regulation (2) of Regulation 4 shall
have the following description:
Classification;
Category;
Division;
Sub-Class;
and
Group;
(2)
There shall be two Classifications, namely, Business within India,
and Total Business (consisting of Business within India and Business
outside India), with Classification Codes 1 and 2 respectively.
(3)
There shall be three Categories, namely, Linked Business, Non-linked
Business and Health Insurance Business, with Category Codes 1, 2
and 3 respectively, under each Classification;
(4)
There shall be two Divisions, namely, Individual Business and Group
Business, with Division Codes 1 and 2 respectively under Category
Codes 1, 2 and 3;
(5)
There shall be three sub-classes, namely, Life Business, General
Annuity and Pension, with sub-class codes 1, 2 and 3 respectively,
under Category Codes 1 and 2, and two sub-classes, namely, Linked
Business, Non-linked Business, with sub-class codes 1 and 2 respectively,
under Category Code 3.
(6)
There shall be four groups under each sub-class, with Group Codes
as specified under sub-regulation (7).
(7)
The details of Group Codes under each Category shall be as follows:
(a)
Category Code 1 - linked Business,--consisting of Insurance
Products,--
(1)
in respect of Division Code 1
Individual Business, and under each sub-class code--
Group Code
(i)
with guarantees--with participation in profits:
A
(ii)
with no guarantees with participation in profits:
B
(iii)
with guarantees--without participation in profits:
C
(iv)
with no guarantees--without participation in
profits:
D
(2)
in respect of Division Code 2--Group Business, and under each subclass
Code--
(i)
with guarantees--with participation in profits:
A
(ii)
with no guarantees--with participation in profits:
B
(iii)
with guarantees--without participation in profits:
C
(iv)
with no guarantees--without participation in profits:
D
(b)
Category Code 2--Non-linked Business,--consisting of Insurance
Products,--
(1)
in respect of Division Code 1
Individual Business,--
(I)
Sub-class Code 1--Sub-class--Life Business,--
(i)
with participation in profits:
A
(ii)
with deferred participation in profits:
B
(iii)
under discounted Bonus system:
C
(iv)
without participation in profits:
D
(II)
Sub-class Codes 2, 3--Sub-class--General Annuity/Pension, as the
case may be,--
(i)
Immediate Annuities with participation
(ii)
in profits:
A
(iii)
(ii) Immediate Annuities without participation
in
profits:
B
(iii)
Deferred Annuities with participation
in
profits:
C
(iv)
Deferred Annuities without participation
in
profits:
D
(2)
in respect of Division Code 2 - Group Business,--
(I)
Sub-class Code 1 sub-class
Life Business, where--
(i)
Premiums are guaranteed for not more than one year--
(a)
with participation in profits:
A
(b)
without participation in profits:
B
(ii)
Premiums are guaranteed for more than one year--
(a)
with participation in profits:
C
(b)
without participation in profits:
D
(II)
Sub-class Codes 2 and 3 sub-class--General
Annuity/Pension, as the case may be,
(i)
Immediate Annuities with participation
in
profits:
A
(ii)
Immediate Annuities without participation
in
profits:
B
(iii)
Deferred Annuities with participation
in
profits:
C
(iv)
Deferred Annuities without
participation
in profits:
D
(c) Category Code 3--Health Insurance Business, consisting of
Insurance Products,--
(1)
in respect of Division Code 1
Individual Business--
(I)
Sub-class Code I -Linked Business--
(i)
with guarantees--with participation in profits:
A
(ii)
with no guarantees--with participation
in
profits:
B
(iii)
with guarantees--without participation
in
profits:
C
(iv)
with no guarantees—without
participation
in profits:
D
(II)
Sub-class Code 2-Non-linked Business--
(i)
with participation in profits:
A
(ii)
with deferred participation in profits:
B
(iii)
under discounted bonus system:
C
(iv)
without participation in profits:
D
(2)
in respect of Division Code 2 - Group Business--
(I)
Sub-class Code 3 - Linked Business--
(i)
with guarantees--with participation in profits:
A
(ii)
with no guarantees--with participation in
profits:
B
(iii) with guarantees--without participation
in
profits:
C
(iv) with no guarantees--without participation
in
profits:
D
(II)
Sub-class Code 4-Non-linked Business—
(i)
Premiums are guaranteed for not more than one year--
(a)
with participation in profits:
A
(b)
without participation in profits:
B
(ii)
Premiums are guaranteed for more than one year--
(a)
with participation in profits:
C
(b)
without participation in profits:
D
(8)
"Nil" Statements shall be furnished for those forms where
the insurer has no transactions.
(9)
Information relating to insurance products shall be given in forms
in the following order of insurance products, wherever required:
Whole
Life Assurances,
Endowment
Assurances,
Anticipated
Endowment Plans (Money Back Plans),
Pure
Endowments,
Double
Endowments,
Term
Insurance Contracts, and
Others
(specifying each).
(10)
All figures shall be furnished in thousands and all amounts shall
be furnished in Indian Rupees.
(11)
In respect of Group Business, `the number of policies' in Forms,
wherever applicable, shall be read as `number of schemes'.
(12)
Rider Benefits shall be furnished in Forms, wherever required, in
the order of (a) Accident Covers -ÿdouble, triple, (b) Disability
Covers, (c) Dread Disease Covers, and (d) Others (specifying each).
(13)
Other Adjustments, shall be furnished in Forms, wherever necessary,
for instance, Provision for Deaths due to AIDS.
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