Guidelines on the Differential Premium Systems - PIDM

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Ref No DI/GL2-A1/2011(DPS) Issued on 4 March 2011TITLE<strong>Guidelines</strong> on The Differential Premium SystemsSECTION 1:INTRODUCTION1.1 BACKGROUND1.1.1 Perbadanan Insurans Deposit Malaysia (“PIDM”) implemented the DifferentialPremium Systems (“DPS”) framework in 2008 with the objective of introducinggreater fairness into the premium assessment process and providing incentives for adeposit-taking member (“member”) to enhance their risk management practices andminimise excessive risk taking. Prior to that, the premiums were calculated on a flatrate basis, which did not differentiate a member according to their risk profiles. TheDPS framework is also in line with PIDM’s mandate of promoting sound riskmanagement and contributing to the soundness of the financial system.1.1.2 The objectives of implementing DPS are:(a)(b)(c)(d)To provide incentives for a member to adopt sound risk managementpractices;To differentiate a member according to their risk profiles;To introduce greater fairness into the premium assessment process; andTo promote stability of the financial system.1.1.3 The objectives of the <strong>Guidelines</strong> on the Differential Premium Systems (“<strong>Guidelines</strong>”)are to assist a member in computing quantitative information, completing forms forsubmission to PIDM and such other matters for the purpose of complying with thereporting requirements under the DPS.1.1.4 This <strong>Guidelines</strong> shall also supersede the <strong>Guidelines</strong> on the Differential PremiumSystems issued in 2008 and Amendment to Section 6 of the <strong>Guidelines</strong> on theDifferential Premium Systems issued in 2009.1.1.5 This <strong>Guidelines</strong> will be effective beginning premium assessment year 2011.Page 1
Ref No DI/GL2-A1/2011(DPS) Issued on 4 March 2011TITLE<strong>Guidelines</strong> on The Differential Premium Systems1.2 FOR ENQUIRIES1.2.1 Enquiries on the <strong>Guidelines</strong> may be directed to:General ManagerInsurance, Risk Assessment and Monitoring DivisionPerbadanan Insurans Deposit MalaysiaLevel 12, Quill 7No. 9, Jalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala LumpurMalaysiaGeneral Lines: 03 21737436Fax: 03 21737494Email: dps@pidm.gov.myPage 2
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Guidelines on the Differential Premium Systems - PIDM

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