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Application provision

1.1 Unless otherwise stated, this Part applies to a non-directive insurer, other than a non-directive friendly society.

4.1

01/01/2016

A firm carrying on long-term insurance business must identify the assets relating to its long-term insurance business which it is required to hold by virtue of:

  1. (1) in the case of a pure reinsurer:
    1. (a) Insurance Company - Technical Provisions 4.1 or 4.2; and
    2. (b) Insurance Company - Risk Management 5.1; and
  2. (2) in any other case:
    1. (a) Insurance Company - Technical Provisions 4.1 or 4.2; and
    2. (b) Insurance Company - Risk Management 4.2 and 4.3.

4.2

01/01/2016

  1. (1) A firm's long-term insurance assets are the items in (2), adjusted to take account of:
    1. (a) outgoings in respect of the firm's long-term insurance business; and
    2. (b) any transfers made in accordance with 4.5.
  2. (2) The items referred to in (1) are:
    1. (a) the assets identified under 4.1 (including assets into which those assets have been converted) but excluding any assets identified as being held to cover liabilities in respect of subordinated debt;
    2. (b) any other assets identified by the firm as being available to cover its long-term insurance liabilities (including assets into which those assets have been converted) including, if the firm so elects, assets which are excluded under (a);
    3. (c) premiums and other receivables in respect of contracts of long-term insurance;
    4. (d) other receipts of the long-term insurance business; and
    5. (e) all income and capital receipts in respect of the items in (a) to (d).

4.3

01/01/2016

  1. (1) Unless (2) applies, all the long-term insurance assets of the firm constitute its long-term insurance fund.
  2. (2) Where a firm identifies particular long-term insurance assets in connection with different parts of its long-term insurance business, the assets identified in relation to each such part constitute separate long-term insurance funds of the firm.

4.4

01/01/2016

A firm must maintain a separate accounting record in respect of each of its long-term insurance funds.

4.5

01/01/2016

A firm may not transfer assets out of a long-term insurance fund unless:

  1. (1) the assets represent an established surplus; and
  2. (2) no more than three months have passed since the determination of that surplus.