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Application provision

1.1 Unless otherwise stated, this Part applies to a non-directive insurer which carries on long-term insurance business, other than a non-directive friendly society.

6.1

01/01/2016

  1. (1) A firm must establish mathematical reserves for a contract of insurance which are sufficient to ensure that, at any subsequent date, the mathematical reserves then required are covered solely by:
    1. (a) the assets covering the current mathematical reserves; and
    2. (b) the resources arising from those assets and from the contract itself.
  2. (2) For the purposes of (1), the firm must assume that:
    1. (a) the assumptions adopted for the current valuation of liabilities remain unaltered and are met; and
    2. (b) discretionary benefits and charges will be set so as to fulfil its regulatory duty to treat its customers fairly under any relevant provision of the FCA Handbook.
  3. (3) Subject to (4), the requirements in (1) may be applied to a group of similar contracts instead of to the individual contracts within that group.
  4. (4) The requirements in (1) must be applied to a group of contracts in relation to which mathematical reserves in respect of non-attributable expenses are established for that group of contracts in accordance with 4.1(2)(a), instead of to the individual contracts within that group.