Motor Accident Injuries Act 2019

This section applies if the MAI commission is deciding whether to approve or reject a premium under—

section 317 (Licensed insurer to apply for approval of premiums); or

section 320 (MAI commission may reconsider rejected premiums); or

section 321 (Mediation of rejected premiums); or

section 322 (Arbitration of unresolved premiums).

The MAI commission may reject a premium for an MAI policy only if the MAI commission considers that—

having regard to actuarial advice and to other relevant financial information available to the MAI commission—

the premium will not fully fund the present and likely future liability under this Act of the licensed insurer; or

the premium is excessive; or

the premium does not comply with the MAI guidelines.

An MAI premium will fully fund the present and likely future liability under this Act of a licensed insurer if the MAI premium is sufficient—

to pay all acquisition and policy administration expenses of the licensed insurer; and

to provide an amount of money that together with anticipated investment income is equal to the best estimate of the cost of—

applications for defined benefits (in inflated dollars) at the assumed date of payment; and

motor accident claims plus motor accident claim settlement expenses (in inflated dollars) at the assumed date of settlement; and

to provide a profit margin in excess of all applications for defined benefits and motor accident claims, costs and expenses that represents an adequate return on capital invested and compensation for the risk taken; and

to provide for other matters that a prudent insurer should, in all the circumstances, make provision for.

For subsection (3) (b) and (c), the cost of motor accident claims does not include the treatment, care and support costs of a participant in the LTCS scheme.

LTCS Act—see the dictionary.