Cap. 403 Art. 18ETechnical provisions.

(1) Authorised insurance and reinsurance undertakings shall establish and maintain technical provisions with respect to all of their insurance and reinsurance obligations towards policyholders and insureds of insurance or reinsurance contracts.

(2) The value and calculation of technical provisions shall be determined in accordance with Insurance Rules made for the purposes of this article.

(3) Without prejudice to anything contained in any other provisions under the Act, the competent authority may, whenever it deems it necessary, require the authorised insurance or reinsurance undertaking concerned to demonstrate the appropriateness of the level of the undertaking’s technical provisions, as well as, the applicability and relevance of the methods applied, and the adequacy of the underlying statistical data used.

(4) To the extent that the calculation of technical provisions of an authorised insurance or reinsurance undertaking does not comply with the Insurance Rules made for the purposes of this article, the competent authority may require the insurance or reinsurance undertaking concerned to increase the amount of technical provisions so that they correspond to the level determined by such Insurance Rules.

(5) Where an authorised insurance or reinsurance undertaking fails to comply with the provisions of this article, the competent authority may prohibit the free disposal of its assets after having communicated its intentions to the European regulatory authority of the host Member State or the overseas regulatory authority. The competent authority shall designate the assets to be covered by such measures.