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Application provision

15.1 This Chapter does not apply to:

15.1

01/01/2016

This Chapter does not apply to:

  1. (1) a pure reinsurer; or
  2. (2) a mixed insurer;

in respect of life protection reinsurance business.

15.2

01/01/2016

The insurance death risk capital component is the aggregate of the amounts which represent the fractions specified by 15.3 of the capital at risk, defined in 15.4, for contracts of insurance which fall within long-term insurance business classes I, II, III, VII, VIII or IX, in respect of those contracts where the capital at risk is not a negative figure, multiplied by the higher of:

  1. (1) 50%; and
  2. (2) the ratio as at the end of the financial year in question of:
    1. (a) the aggregate capital at risk in respect of that category of contracts net of reinsurance cessions; to
    2. (b) the aggregate capital at risk in respect of that category of contracts gross of reinsurance cessions.

15.3

01/01/2016

For the purpose of 15.2, the fraction is:

  1. (1) for long-term insurance business classes I, II and IX, except for a pure reinsurer:
    1. (a) 0.1% for temporary insurance on death where the original term of the contract is three years or less;
    2. (b) 0.15% for temporary insurance on death where the original term of the contract is five years or less but more than three years; and
    3. (c) 0.3% in any other case;
  2. (2) 0.3% for long-term insurance business classes III, VII and VIII, except for a pure reinsurer; and
  3. (3) 0.1% for a pure reinsurer.

15.4

01/01/2016

For the purpose of 15.2, the capital at risk is:

  1. (1) where the benefit under a contract of insurance payable as a result of death includes periodic or deferred payments, the present value of the benefits payable; and
  2. (2) in any other case, the amount payable as a result of death,

less, in either case, the mathematical reserves for the contract.