Untitled Document
Staggered start to Automatic Enrollment
Demir Hayat now owned by EMF New Europe Insurance Fund
Government's plans for our sector in 2017
BES pension funds now as popular an investment as term bank deposits
Treasury reminds employers of their responsibilities under Automatic Enrollment
Tourism crisis and coup attempt hit unemployment
Takaful insurance trade association formed
Nothing's certain except death and taxes
Government rethinking their plans for mandatory private pensions
Translation of Sectoral Announcement no 2007/21
Untitled Document population premium waiver Aegon 2012 Katılım Hayat ve Emeklilik death 2023 health Islamic finance Asya Emeklilik
Untitled Document
Unearned Premium Reserves: Half a Day!


   Insurance policies in Turkey usually start at 12:00 midday on the commencement date and end at 12:00 midday. This small nuance has traditionally been ignored by insurance companies when calculating Unearned Premium Reserves, actuaries just accruing the premium on a 365ths (daily) basis.

 Sector Announcement 2009/09 dated 27 March 2009 puts an end to this practice, and requires actuaries to recognise this half a day when calculating the UPR. So, for a policy commencing on 31 March 2009, 0.5/365 of the premium is assumed to be earned in the first quarter 2009, with 364.5/365 of the premium being unearned.  

This does seem to be a little over-accurate. Pedants may suggest the next step would be to accrue the premium on an hourly basis, taking into account leap-years and daylight saving time in the summer!  

However, thanks to article 1 of the “Teknik Karşılıklarla İlgili Mevzuatın Uygulanmasına İlişkin Sektör Duyurusu” (Sector Announcement Related to the Application of Legislation Concerning Technical Reserves), it is now mandatory.

Tags: reserves | UPR |
No comments have been made on this article yet..

www.turkeyinsurance.info © Marion James 2014 All rights reserved.