Section 16: Technical reserves

16. Technical reserves (1) An insurer shall make adequate technical provisions in its accounts for its underwriting liabilities in respect of its insurance policies, whether long term or general, as the case may be, including liabilities for unexpired risks, outstanding and incurred claims, provisions for claims incurred but not reported, and liabilities for policy benefits which have not become claimable, computed in accordance with a method specified in solvency rules. (2) An insurer shall at all times hold unencumbered assets to the value of its technical provisions and after making adequate provisions for all its other liabilities. (3) The assets covering the technical provisions shall take account of the insurance business and the classes or part of classes of business carried on by the insurer in such a way as to secure the safety, yield and marketability of its investments, which the insurer shall ensure are diversified and adequately spread in accordance with solvency rules. (4) Solvency rules made for the purpose of this section may provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or shall be taken into account only to a specified extent. [S. 16 amended by s. 10 of Act 16 of 2007 w.e.f. 28 September 2007.]