Related provisions for INSPRU 1.5.13A
1 - 20 of 27 items.
The transferor will need to provide the appropriate regulator8 with the information that the Home State regulator requires from the appropriate regulator8. This information includes:88(1) the transfer agreement or a draft, with:(a) the names and addresses of the transferor and transferee; and(b) the classes of insurance business and details of the nature of the risks or commitments to be transferred;(2) for the business to be transferred (both before and after reinsurance):(a)
If the transferor is a8UK insurer and the business to be transferred includes a long-term insurance contract (other than reinsurance) for which the state of the commitment is an EEA state other than the United Kingdom, then the appropriate regulator8 has to consult the Host State regulator. If the transferor is a8UK insurer and the business to be transferred includes a general insurance contract (other than reinsurance) for which the state of the risk is an EEA state other than
The scheme report should comply with the applicable rules on expert evidence and contain the following information:(1) who appointed the independent expert and who is bearing the costs of that appointment;(2) confirmation that the independent expert has been approved or nominated by the appropriate regulator8;8(3) a statement of the8independent expert's professional qualifications and (where appropriate) descriptions of the experience that fits him for the role;(4) whether the
The purpose of the scheme report is to inform the court and the independent expert, therefore, 8has a duty to the court. However reliance will also be placed on it by policyholders, by reinsurers,8 by others affected by the scheme and by the regulators8. The amount of detail that it is appropriate to include will depend on the complexity of the scheme, the materiality of the details themselves and the circumstances.88
The summary of the terms of the scheme should include:(1) a description of any reinsurance arrangements that it is proposed should pass to the transferee under the scheme; and(2) a description of any guarantees or additional reinsurance that will cover the transferred business or the business of the transferor that will not be transferred.
Under the Financial Services and Markets Act 2000 (Control of Business Transfers)(Requirements on Applicants) Regulations 2001 (SI 2001/3625), unless the court directs otherwise, notice of the application must be sent to all policyholders of the parties and reinsurers (or a person acting on its behalf) any of whose contracts of reinsurance are proposed to be transferred as part of the insurance business transfer scheme.It may also be appropriate to give notice to others affected,
The assessment is a continuing process, starting when the scheme promoters first approach the appropriate regulator8 about a proposed scheme. Each regulator will have an interest in assessing the scheme.8Among the considerations that may be relevant to both the depth of consideration each gives to, and each regulator's8 opinion on, a scheme are:88(1) the potential risk posed by the transfer to its statutory objectives8;8(2) the purpose of the scheme;(3) how the security of policyholders'
8Under section 114 of the Act the court must direct that notice of the transfer be published by the transferee in any EEA State other than the United Kingdom which is the state of the commitment or the state of the risk as regards any policy included in the transfer which evidences a contract of insurance (other than a contract of reinsurance). The regulators would expect the transferee to publish notice in at least one national newspaper in each relevant EEA State. Such publication
INSPRU 3.1 addresses the impact of market risk on insurance business in the ways set out below:(1) Any firm that carries on long-term insurance business which is a regulatory basis only life firm2must comply with the resilience capital requirement. This requires the firm to hold capital to cover market risk. The resilience capital requirement is dealt with in INSPRU 3.1.9 G to INSPRU 3.1.26 R.(2) For a firm that carries on long-term insurance business, the assets that it must
A firm must cover its index-linked liabilities with:(1) either:(a) the assets which represent that index; or(b) assets of appropriate security and marketability which correspond, as closely as possible, to the assets which are comprised in, or which form, the index or other reference of value to which those liabilities are linked; or(2) a portfolio of assets whose value or yield is reasonably expected to correspond closely with the index-linked liability; or(3) an index-linked
A pure reinsurer must invest its assets in accordance with the following requirements:(1) the assets must take account of the type of business carried out by the firm, in particular the nature, amount and duration of expected claims payments, in such a way as to secure the sufficiency, liquidity, security, quality, profitability and matching of its investments;(2) the firm must ensure that the assets are diversified and adequately spread and allow the firm to respond adequately
The Insurance Mediation Directive has in part been implemented through various amendments to the Regulated Activities Order. These include article 4(4A) (Specified activities: general) which precludes a person who, for remuneration, takes up or pursues insurance mediation or reinsurance mediation in relation to a risk or commitment situated in an EEA State from making use of certain exclusions. In other cases, some of the exclusions provided in relation to particular regulated
This section requires firms other than pure reinsurers to limit non-insurance activities to those that directly arise from their insurance business, e.g. investing assets, employing insurance staff etc. It also requires that an adequate provision be established for non-insurance liabilities. pure reinsurers must limit their activities to the business of reinsurance and related operations.
(1) A firm other than a pure reinsurer must not carry on any commercial business other than insurance business and activities directly arising from that business.(2) (1) does not prevent a friendly society which was on 15 March 1979 carrying on long-term insurance business from continuing to carry on savings business.
2A firm must contact the FCA as soon as is reasonably practicable to make arrangements to discuss what actions may be required to ensure the fair treatment of with-profits policyholders if, in relation to any with-profits fund it operates:(1) the firm reasonably expects, or if earlier, there has been, a sustained and substantial fall in either the volume of new non-profit insurance contracts, or in the volume of new with-profits policies (effected other than by reinsurance), or
(1) 2The aim of the discussions in COBS 20.2.41A R is to:(a) allow the FCA to comment on the adequacy of the firm's planning; and(b) seek agreement with the firm on any other appropriate actions to ensure with-profits policyholders are treated fairly.(2) If the firm is no longer effecting a material volume of new with-profits policies (other than by reinsurance) into a with-profits fund; or if it is ceding by way of reinsurance most or all of the new with-profits policies which
A firm will be taken to have ceased to effect new contracts of insurance in a with-profits fund:(1) when any decision by the governing body to cease to effect new contracts of insurance takes effect; or(2) where no such decision is made, when the firm is no longer:(a) actively seeking to effect new contracts of insurance in that fund; or(b) effecting new contracts of insurance in that fund, except by increment; or2(3) if the firm:2(a) (i) is no longer effecting a material volume
SUP 4.3.13 R is not intended to be exhaustive of the professional advice that a firm should take whether from an actuary appointed under this chapter or from any other actuary acting for the firm. Firms should consider what systems and controls are needed to ensure that they obtain appropriate professional advice on financial and risk analysis; for example:11(1) risk identification, quantification and monitoring;1(2) stress and scenario testing;1(3) ongoing financial conditions;1(4)
1An actuary appointed to perform the with-profits actuary function must:(1) advise the firm's management, at the level of seniority that is reasonably appropriate, on key aspects of the discretion to be exercised affecting those classes of the with-profits business of the firm in respect of which he has been appointed;(2) where the firm is a realistic basis life firm advise the firm's governing body as to whether the assumptions used to calculate the with-profits insurance component
A firm's run-off plan should explain how it will use and manage reinsurance (if it will), including:(1) any new inwards or outwards reinsurance it proposes to enter into as a result of the closure of the with-profits fund identifying, in each case, the proposed counterparty and the counterparty's relationship to the firm's group (if any); and(2) how it will manage the risk that the reinsurance in (1) will not perform as expected.
These tables belong to SUP App 2.15.8 G
Table 1 - forecast summary revenue account for the relevant with-profits fund |
|
(1) |
Premiums and claims (gross and net of reinsurance) analysed by major class of insurance business |
(2) |
Investment return |
(3) |
Expenses |
(4) |
Other charges and income |
(5) |
Taxation |
(6) |
Increase (decrease) in fund in financial year |
(7) |
Fund brought forward |
(8) |
Fund carried forward |
Table 2 - forecast summary balance sheet and statement of solvency for the relevant with-profits fund |
|
Assets analysed by type (excluding implicit items): |
|
(1) |
Equities |
(2) |
Land and buildings |
(3) |
Fixed interest investments |
(4) |
All other assets |
(5) |
Total assets (excluding implicit items) |
(6) |
Policyholder liabilities |
(7) |
Other liabilities |
(8) |
Total liabilities |
(9) |
Excess/(deficiency) of assets over liabilities before implicit items |
(10) |
Implicit items allocated to the with-profits fund |
(11) |
Long-term insurance capital requirement for the with-profits fund |
(12) |
|
(13) |
With-profits insurance capital component (for realistic basis life firms only) |
(14) |
Net excess/(deficiency) of assets in the with-profits fund |
Table 3 - forecast summary balance sheet and statement of solvency for the firm |
||
L1 |
||
L2 |
||
L3 |
L1+L2 |
|
L4 |
Total long-term insurance liabilities (excluding resilience capital requirement) |
|
L5 |
Total long-term insurance fund surplus |
L3-L4 |
L6 |
Shareholder fund assets |
|
L7 |
||
L8 |
||
L9 |
Excess of regulatory assets over long-term insurance capital requirement |
L5+L6+L7-L8 |
L10 |
For realistic basis life firms only. |
|
L11 |
||
L12 |
Net excess assets |
L9-L10-L11 |
L13 |
FTSE level at which the long-term insurance capital requirement would be breached |
|
Notwithstanding SUP 10A.1.8 G, an incoming EEA firm (other than an EEA pure reinsurer) or incoming Treaty firm will have had to consider the impact of the Host State rules with which it is required to comply when carrying on a passported activity or Treaty activity through a branch in the United Kingdom. An incoming EEA firm (other than an EEA pure reinsurer) will have been notified of those provisions under Part II of Schedule 3 to the Act in the course of satisfying the conditions
In a prospective valuation, a firm must:(1) include in the cash flows to be valued the following:(a) future premiums (see INSPRU 1.2.35 G to INSPRU 1.2.47 G);(b) expenses, including commissions (see INSPRU 1.2.50 R to INSPRU 1.2.58 G);(c) benefits payable (see INSPRU 1.2.29 R); and(d) subject to (2), amounts to be received or paid in respect of the long-term insurance contracts under contracts of reinsurance or analogous non-reinsurance financing agreements (see INSPRU 1.2.77A
For the purposes of INSPRU 1.2.79R (2) and INSPRU 1.2.85 R, future surplus Future surplus may only be offset against future reinsurance cash outflow in respect of surplus on non-profit insurance contracts and the charges or shareholder transfers arising as surplus from with-profits insurance contracts. Such charges and transfers may only be allowed for to the extent consistent with the regulatory duty of the firm to treat its customers fairly.
An institution, an insurance undertaking (including an insurance undertaking that carries out reinsurance) or an export credit agency which fulfils the following conditions may be recognised as an eligible provider of unfunded credit protection which qualifies for the treatment set out in BIPRU 4.4.79 R:(1) the protection provider has sufficient expertise in providing unfunded credit protection;(2) the protection provider is regulated in a manner equivalent to the rules laid down
To be eligible for the treatment set out in BIPRU 4.4.79 R, credit protection deriving from a guarantee or credit derivative must meet the following conditions:(1) the underlying obligation must be to:(a) a corporate exposure, excluding an exposure to an insurance undertaking (including an insurance undertaking that carries out reinsurance); or(b) an exposure to a regional government, local authority or public sector entity which is not treated as an exposure to a central government
FCA controlled functions
Part 1 (FCA controlled functions for FCA-authorised persons and appointed representatives) |
||
Type |
CF |
Description of FCA controlled function |
1 |
||
2 |
||
3 |
||
4 |
||
5 |
||
6 |
||
8 |
||
10 |
||
10A |
||
11 |
||
40 |
||
50 |
||
28 |
||
29 |
||
30 |
||
Part 2 (FCA controlled functions for PRA-authorised persons) |
||
Type |
CF |
Description of FCA controlled function |
8 |
||
10 |
||
10A |
||
11 |
||
40 |
||
50 |
||
29 |
||
30 |
||
(1) CASS
5.8 applies to a firm (including
in its capacity as trustee under CASS
5.4) which in the course of insurance mediation activity takes into its
possession for safekeeping any client title documents (other than documents of
no value) or other tangible assets belonging to clients.(2) CASS
5.8 does not apply to a firm when: (a) carrying
on an insurance mediation activity which
is in respect of a reinsurance contract;
or(b) acting
in accordance with CASS 61 (Custody
rules
(1) CASS 5.1 to CASS
5.6 apply, subject to (2), (3) and CASS 5.1.3 R to CASS 5.1.6 R, to a firm that receives
or holds money in the course
of or in connection with its insurance mediation
activity.(2) CASS 5.1 to CASS
5.6 do not, subject to (3), apply:(a) to
a firm to the extent that it
acts in accordance with the client
money chapter; or64(b) to
a firm in carrying on an insurance mediation activity which is in
respect of a reinsurance contract;
or(c) to
an insurance undertaking
The regulators are likely to consider3 a novation or a number of novations as amounting to3an insurance business transfer only if their number or value were such that the novation was to be regarded as a transfer of part of the business. A novation is an agreement between the policyholder and two insurers whereby a contract with one insurer is replaced by a contract with the other. If3 an insurer agrees to meet the liabilities (this may include undertaking the administration of
The Society must establish and maintain effective arrangements to monitor and manage risk arising from:(1) conflicts of interest (including in relation to (2) to (4));(2) inter-syndicate transactions, including reinsurance to close and approved reinsurance to close;(3) related party transactions; and(4) transactions between members and itself.