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Application provision

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

8.1

01/01/2016

A firm must take account of 8.2 to 8.6 in determining the extent to which a firm’s margin of solvency covers the required margin of solvency, the guarantee fund and the minimum guarantee fund.

8.2

01/01/2016

A firm with variable contributions, carrying on general insurance business, must treat any claim which the firm has against its members by way of a call for supplementary contributions for a financial year as having no value.

8.3

01/01/2016

A firm must treat implicit items as having no value.

8.4

01/01/2016

A firm must treat an unpaid initial fund as having no value.

8.5

01/01/2016

Subject to 8.6, if a firm discounts or reduces its insurance liabilities for claims outstanding to take account of investment income, the margin of solvency must be reduced by the difference between:

  1. (1) the undiscounted insurance liabilities for claims outstanding or the insurance liabilities for claims outstanding before deductions; and
  2. (2) the discounted insurance liabilities for claims outstanding or the insurance liabilities for claims outstanding after deductions.

For these purposes, insurance liabilities must be calculated net of reinsurance.

8.6

01/01/2016

8.5 does not apply:

  1. (1) to risks in general insurance business classes 1 or 2; or
  2. (2) in respect of the discounting of annuities.