IA issues E-forms to monitor compliance by the companies with the financial instructions and to promote market growth
Abu Dhabi on May 24, 2015
The Insurance Authority (IA) issued the electronic financial forms (E-forms) related to the financial instructions for the traditional and Takaful insurance companies, which were issued by the IA by the end of 2014 to ensure optimum application of the instructions and boost supervision and oversight over the insurance sector according to the best practices applicable worldwide.
The IA requested the traditional and Takaful insurance companies, through a circular issued in this regard, to provide any relevant remarks or perspectives after completing the forms, which are available in Arabic and English on the IA's website, with the financial statements of 2014 and quarterly statements available for 2015.
The electronic financial forms include full analysis of the technical aspects related to traditional and Takaful insurance which include the analysis of financial data, investments, insurance premiums, commissions, expenses, technical provisions, reinsurance, receivables and transactions with related parties, as well as analyses related to the operations of the Takaful insurance companies, which help in decision making at all levels.
By adopting such e-forms, the IA aims at boosting the elements of stability and sustainable growth of the UAE insurance market by ensuring the solvency of the insurance companies and their capabilities to meet all of their obligations in view of the vital role of the insurance sector in the national economy's structure, in addition to protecting the rights of policyholders and policy beneficiaries.
The electronic financial forms represent an essential element in determining capital solvency requirements, minimum indemnity amount, and minimum capital that should be maintained by the companies. They include forms to measure the capital required to face the underwriting risks, investment risks, credit risks and operational risks.
Further, by adopting the e-forms, the IA seeks to conduct regular review to ensure the companies' compliance with the financial instructions issued by the IA and the new standards included therein, in addition to the solvency requirements that should be met by the companies in accordance with a risk-based approach, by having the insurance companies submit annual and quarterly reports to the IA.
Supervisory e-forms enable the formation of a consistent and standard approach for the financial and technical indicators applied to all insurance companies in line with the goal of the financial instructions to provide an early warning system to monitor the financial conditions of the insurance companies. Accordingly, there will be an enhanced ability to proactively address the financial flaws in early stages, reinforce control and oversight systems over the insurance companies, and improve the insurance companies' ability to absorb financial shocks and crises they may be subject to, in addition to ensuring stability for the UAE insurance market and boosting its competitiveness.
- End -