An insurer's reinsurance and other forms of risk transfer policy must—
| (a) |
outline appropriate strategies and procedures for the selection of suitable reinsurance programs and other risk transfer techniques, proportionate to the nature, scale and complexity of the insurer's risks, and to the capabilities of the insurer to manage and control the risk transfer technique used; |
| (b) |
ensure transparent reinsurance arrangements that enable the Authority to understand the economic impact of reinsurance and other forms of risk transfer arrangements in place; |
| (c) |
provide for processes and procedures for ensuring that the strategies referred to in paragraph (a) are implemented and complied with, and that the insurer has in place appropriate systems and controls over its risk transfer transactions; |
| (d) |
identify the level of risk transfer appropriate to the insurer's approach to risk; |
| (e) |
identify the types of reinsurance arrangements most appropriate to effectively manage the insurer's risk profile; |
| (f) |
identify principles for the selection of reinsurance counterparties; |
| (g) |
provide for procedures for assessing the creditworthiness and diversification of reinsurance counterparties; |
| (h) |
provide for procedures for assessing the effectiveness of the risk transfer; |
| (i) |
set concentration limits for credit risk exposure to reinsurance counterparties and appropriate systems for monitoring these exposures; and |
| (j) |
provide for liquidity management to address any timing mismatch between claims payments and reinsurance recoveries. |
Statistics Act, 1999
