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RESOLUTION OF BOARD OF CENTRAL BANK OF THE AZERBAIJAN REPUBLIC

of December 27, 2023 No. 63/3

About approval "Contents, form and procedure for submission of the actuarial conclusion"

Based on article 81-6.6 of the Law of the Azerbaijan Republic "About insurance activity" and article 22.1.17 of the Law of the Azerbaijan Republic "About the Central bank of the Azerbaijan Republic" the Board of the Central bank of the Azerbaijan Republic DECIDES:

1. Approve "Content, form and procedure for submission of the actuarial conclusion" it (is applied).

2. Charge to Legal department (Rena Melikova) in 3-day time to provide submission of this Resolution to the Ministry of Justice of the Azerbaijan Republic for entering into the State register of legal acts of the Azerbaijan Republic.

Approved by the Resolution of Board of the Central bank of the Azerbaijan Republic of December 27, 2023 No. 63/3

Content, form and procedure for submission of the actuarial conclusion

1. General provisions

This Procedure is developed according to article 81-6.6 of the Law of the Azerbaijan Republic "About insurance activity" (further - the Law) and determines content, form and procedure for submission of the actuarial conclusion.

2. Concepts

2.1. The concepts used for the purposes of this Procedure have the following values:

2.1.1. reporting date - day of the termination of the respective quarter or calendar year;

2.1.2. the accounting period - 12 (twelve) months preceding reporting date;

2.1.3. active types of insurance - types of insurance on which during the accounting period insurance premiums were assessed or are made insurance payments;

2.1.4. main types of insurance - the types of active insurance having the largest weight in insurance portfolio during the accounting period (calculated in relation to insurance premiums or insurance payments) and which amount of weight constitutes the part exceeding 80% of all insurance portfolio;

2.1.5. the test of adequacy of the obligation - the test used for determination of whether it is necessary to increase book value of the obligation by the analysis of future cash flows.

2.2. Other concepts used in this Procedure express the values established by the insurance legislation of the Azerbaijan Republic.

2.3. Concept the "insurer" used in this Procedure includes also overcautious persons.

3. Form of the actuarial conclusion

The actuarial conclusion is constituted by the responsible actuary of the insurer in the form provided by Appendix No. 1 to this Procedure.

4. Contents of the actuarial conclusion

4.1. In the actuarial conclusion the following data taking into account requirements of part 5 of this Procedure are reflected:

4.1.1. information about the responsible actuary:

4.1.1.1. surname, name, middle name;

4.1.1.2. registration number and final date of action of the actuarial certificate which is available for it;

4.1.1.3. the name of the actuarial organizations or associations which member he is (in the presence).

4.1.2. General information:

4.1.2.1. place and date of creation of the actuarial conclusion;

4.1.2.2. the accounting period covering actuarial calculations.

4.1.3. Information about the insurer:

4.1.3.1. full name;

4.1.3.2. INN;

4.1.3.3. legal and actual address;

4.1.3.4. license number, permitting to perform insurance activity and, in the presence, reinsurance activities;

4.1.3.5. the types of compulsory insurance permitted to implementation;

4.1.3.6. size of the authorized capital.

4.1.4. Information on implementation of actuarial calculations and their results:

4.1.4.1. the used documents and data:

4.1.4.1.1. the list of legal acts to which reference when implementing actuarial calculations was made, and also data on the used methodological means, the principles of modeling and actuarial assumptions;

4.1.4.1.2. the list of the documents and data received from the insurer, state bodies and other persons for creation of the actuarial conclusion;

4.1.4.1.3. if any document or information necessary for creation of the actuarial conclusion were not provided by the insurer or it was revealed that they were hidden, the list of such documents or data and information on whether the responsible actuary informed on it the Central bank of the Azerbaijan Republic (further - the Central bank) based on the Law;

4.1.4.1.4. information on assessment of sufficiency, completeness and quality of the data used in actuarial calculations, and the work done at the insurer within year on their increase;

4.1.4.2. insurance premiums and insurance payments:

4.1.4.2.1. the analysis of dynamics of increase or reduction of insurance premiums and insurance payments for all types of insurance portfolio and main types of insurance on reporting date of the insurer, at least for the last 3 (three) years by their comparison with the same periods of previous years;

4.1.4.2.2. the analysis of concentration of the insurance premiums expected and the come losses on main types of insurance, and on actuarial assumptions in connection with accumulative life insurance and other insurance contracts signed for the term of more than 3 (three) years, - the expected and occurred losses according to various segments (with separation at least into insurance risk, products, years of agreements, the public and non-state sector, direct and insurance intermediaries, individual and group insurance contracts);

4.1.4.3. insurance reserves:

4.1.4.3.1. the analysis of dynamics of increase or reduction of the insurance reserves created by the insurer on reporting date including each type of net insurance reserves, at least for the last 3 (three) years by their comparison with the same periods of previous years;

4.1.4.3.2. in case of calculation of insurance reserves on the basis of individual approach of the responsible actuary - the description and reasons for methodology of calculation, and also the data specified in subitem 4.1.4.1.1 of this Procedure;

4.1.4.3.3. the description and the analysis of change of insurance reserves of the insurer within quarter (in comparison with the beginning of the current year according to the annual financial reporting) in the form specified in Appendix No. 2 to this Procedure (tables are constituted separately for all-insurance reserves and on main types of insurance, and on other types of insurance can be grouped in the types of insurance covering similar insurance risks);

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