Executive Rule No. 43 Concerning the inspection of Incorporated Bodies performing insurance activities

There are three types of reserve in Incorporated Bodies performing insurance activities:

1. Reserve for unexpired risks

   It is an expense at the end of the previous year, which is carried forward as revenue at the beginning of the current year. This item is acceptable as a specific percentage of net premiums as follows:

   Marine insurance	25%
   Fire insurance	40%
   Motor and other insurance	40%

2. Outstanding claims reserve

   Genuinely, it is not accepted whether it is an expense at the end of the current year or revenue at the beginning of the current year. However, if the Incorporated Body has reported outstanding claims reserve as part of paid claims, only paid claims are acceptable to the extent of the supporting documents as per each type of policies after the excluding outstanding claims of the Incorporated Body at the beginning and end of the year.

3. Additional reserve

   It is not accepted whether it is an expense at the end of the current year or revenue at the beginning of the current year.

Second: Reinsurance from abroad

To accept reinsurance from abroad, the amount paid for reinsurance shall be compared to the amount of the claims recovered plus the commission received from reinsurance. In case the amount of the claims recovered together with the commission received is more than the amount paid for reinsurance, it is accepted. If not, the following shall be done:

1. Disallow an appropriate percentage of reinsurance premiums abroad after verifying the correctness of the documents thereof.

2. In case the Incorporated Body does not present an appropriate value of the recovered, these shall be estimated as follows:

   1. In case the Incorporated Body does not maintain the required books and registers, the value of the claims recovered are estimated from paid claims compared to percentage of reinsurance premiums together with direct premiums. (facultative reinsurance).

   2. In case of treaty reinsurance, excess loss reinsurance, surplus reinsurance, the claims recovered shall be estimated after the study of the documents thereof.

Third: Reinsurance commission

In case the Incorporated Body does not report a commission collected from reinsurance abroad at an appropriate percentage, the following shall done: