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Life insurers required from 2020 to set aside to a special reserve account for all current-year net profit after tax on disability income insurance

In recognition of the fact that disability income insurance products are affected by the dual uncertainties of the disability incidence rate (especially the incidence rate of disability due to illness) and the disabled mortality rate in future years, the FSC on 26 March 2021 announced that life insurers are required from 2020 forward to set aside to a special reserve account all current-year net profit after tax on disability income insurance. Any life insurer that sets aside to the special reserve account an insufficient portion of current-year net profit after tax on disability income insurance will be required to make up for the shortfall the following year. An insurer in any subsequent year that has a loss on disability income insurance will be allowed to reverse from the special reserve account within the original amount mentioned.
Visitor: 172   Update: 2021-06-04
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