Valuation of liabilities of general business
20A.—(1)  In determining the amount of insurance policy liabilities in respect of the general business of an insurer under section 37(1)(b) of the Act, the actuary shall calculate —
(a)for each line of business —
(i)a best estimate of the value of premium liabilities; and
(ii)a best estimate of the value of claims liabilities; and
(b)for each insurance fund established under the Act, an estimate of the provision for adverse deviations that relates to the inherent uncertainty in each of the best estimate values, calculated based on 75 per cent level of sufficiency.
(2)  For the purposes of paragraph (1)(a), the value of premium liabilities and claims liabilities shall be estimated for each line of business set out in Form 7 of the First Schedule to the Insurance (Accounts and Statements) Regulations (Rg 2).
(3)  For the purposes of paragraph (1), the insurance policy liabilities shall, subject to paragraph (4), be determined by the actuary either —
(a)on a gross basis, in which case a separate estimate of the reinsurance recoveries shall also be determined; or
(b)on a net of reinsurance recoveries basis.
(4)  Notwithstanding anything in paragraph (3), if there have been significant changes in the reinsurance arrangements, or if the outstanding reinsurance recoveries have a material impact on the actuary’s estimate of the value of the liabilities, the insurance policy liabilities shall be determined on both gross and net of reinsurance recoveries bases.
(5)  Without prejudice to any other factor that the actuary may consider necessary, the actuary shall, in determining insurance policy liabilities under paragraph (1), take into account the following:
(a)the probability of recovery of outstanding reinsurance recoveries; and
(b)the presence of non-reinsurance recoveries such as salvage and subrogation.
(6)  For the purposes of section 37(1)(c) of the Act, the actuary shall include in the actuarial report, each of the values as are required to be estimated under this regulation.