UAE – Technical reserves will help control price competition
Wednesday, 11 23 2016, Category: Insurance and Reinsurance, Country: U.A.E
The Insurance Authority said that there are no penalty procedures against underpricing, which is practiced for competitive purposes. However, there are procedures that strengthen the financial side noting that there is no official specific tariffs except for motor insurance, so every company sets its own pricing policy.
The Insurance Authority told “Emarat Al Youm” that there are procedures enforced that compel the insurance company to appoint an actuary to evaluate the pricing policy of the company. Additionally, it requests from the company to strengthen its technical reserves in case reserves were insufficient due non-technical pricing.
In turn two insurance experts said “there are financial procedures represented by increase in the technical reserves, which will contribute to decrease the impact of price competition”. And they also called for an ongoing testing of the solvency of companies in order protect the policyholders’ rights.
Source: Emarat Al Youm