1. A non-technical
guide to Financial
Condition Report in
Bahrain
JABRAN NOOR, FSA FIA
Executive Director - Actuarial & Risk Management
Tajweez Advisory
tajweezactuarial.com
NON-TECHNICAL GUIDE SERIES
2. Tajweez Actuarial provides a brief synopsis of the
Insurance Regulations in the GCC through the
“Non-Technical Guide Series”
We aim to bring clarity and achieve common
understanding of compliance requirements.
NON-TECHNICAL GUIDE SERIES
Our consultancy services are based around
insightful simplification of complex ideas.
tajweezactuarial.com
4. Implemented the detailed
Financial Condition Report
(FCR) in 2014.
Companies have to comply
with AA-4.1.5 requirement by
submitting detailed FCR
starting year end 2014
BAHRAIN
4
5. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
FCR Overview
5
2015
under both current
financial status and future
risk scenarios
increases disclosure level
certified by actuary
Detailed Report on
solvency condition
2015
Professional actuarial
bodies
Regulations
Best practices (Solvency
II, APRA etc)
Guidance available from
6. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
FCR Overview
6
1. What is an FCR?
Financial Condition Report (FCR) is a report on the solvency condition of an insurance company that takes
into account both the current financial status, as reflected in the balance sheet, and the assessment of the
ability of the company to survive future risk scenarios. The assessment is usually made by the actuary.
2. What are some of the countries which have a FCR Requirement?
FCR is becoming an essential part of insurance regulations. FCR is a requirement for many solvency
regimes e.g. Solvency II, APRA (Australia), Ireland, CBB (Bahrain), SAMA (KSA), QFC (Qatar), UAE,
Pakistan, India etc.
7. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
FCR Overview
7
3. Is FCR Required for Long Term Business only?
Traditional FCR was only required for long term business (e.g. Life Insurance) in many regulatory regimes.
However, there is a global move towards requiring FCR for all insurance companies i.e. both long term and
short term business (e.g. non-life). The frequency of reporting may however vary between long term and
short term business in some regimes.
4. Why is a FCR needed when companies already disclose position in prudential forms?
FCR is usually prepared by an actuary who provides opinion on the current and future position of the
company. This is frequently done qualitatively, although quantitative approaches are not precluded. The
prudential forms are a static assessment of the current financial position of the company. FCR has a higher
level of disclosure than prudential forms.
8. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
FCR Requirements
8
Annually for long-term (life) business and once every two years for short-term (non-life)
business.
Must be signed by Registered Actuary or Signing Actuary
Central Bank of Bahrain (CBB) may require a FCR on more frequent basis than
requirement specified
CBB may appoint an actuary to conduct special purpose review of insurance firm’s
operations, risk management, financial affairs or other areas specified by CBB.
9. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
FCR Report Considerations
9
Professional Standards
Business Overview
Recent Profitability
Liabilities
Adequacy of past estimates
Assessment of liabilities
Assumptions
Data
Model
Variability and Sensitivity
Surplus / Deficit
Takaful specific issues
Transfer to shareholders
Asset / Liability Management
Investment Strategy
Capital Management / Strategy
Pricing / Premium Adequacy
Reinsurance
Recommendations
Corporate structure
Actual Requirements for contents specified in AA-4.3.1. Following is a snapshot of key requirements.
10. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
FCR Report Considerations
10
Financial Condition Report should be an objective assessment of the overall financial
condition of the firm.
Professional standards and contents prescribed by CBB should be taken into account.
It is important for actuary to gain an holistic view of the company before addressing
specific issues e.g. liabilities, reinsurance, pricing etc. Data visualisation and dashboards
may provide insights.
Actuaries should make assessment of the current and future financial position.
Companies should use FCR beyond regulatory compliance. FCR can be used as an
important management tool as well.
11. Tajweez Advisory CO WLL - FCR Requirements in Bahrain - Jabran Noor
Our Services
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Approved Actuary Role
CBB Compliance & Signoff
Prudential Form Dashboards
Reinsurance Optimisation
Business overview
Capital Modeling
12. • The guide has been prepared to
describe the regulation in a simple
manner. It is in no means a substitute
to the original regulation.
• No liability is assumed regarding the
accuracy of the information
contained. We welcome your
feedback on any aspect of the report.
• The report should not be reproduced ,
published or disseminated, in part of
full, without explicit permission of
Tajweez Advisory.
• We love exchanging ideas and look
forward to hearing from you. Quote
the pass phrase “TAJ5DISC” at time
of project approval and you qualify for
a 5% discount on consulting
Information Usage
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13. tajweezactuarial.com
Jabran Noor, FSA FIA
Executive Director -
Actuarial & Risk Management
jabran.noor@tajweez.com
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