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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.

2.1

01/01/2016

Subject to 2.5, a firm must calculate its capital resources in accordance with the capital resources table.

2.2

01/01/2016

A firm must only include in a lower stage of capital, capital resources which are eligible for inclusion in a higher stage of capital if:

  1. (1) 2.5 would prevent the use of that capital in that higher stage of capital;
  2. (1) the firm complies with 2.5 following the inclusion of that higher stage of capital included in the lower stage of capital; and
  3. (2) the firm complies with other rules in this Part governing the eligibility of capital in that lower stage of capital.

2.3

01/01/2016

A firm must have at least 50% of its tier one capital resources accounted for by core tier one capital.

2.4

01/01/2016

A firm must have no more than 15% of its tier one capital resources accounted for by innovative tier one capital.

2.5

01/01/2016

A firm must exclude from the calculation of its capital resources the following:

  1. (1) the amount (if any) by which tier two capital resources exceed the amount calculated at stage F (Total tier one capital after deductions) of the calculation in the capital resources table; and
  2. (2) the amount (if any) by which lower tier two capital resources exceed 50% of the amount calculated at stage F of the calculation in the capital resources table.

2.6

01/01/2016

A firm (other than a pure reinsurer) that carries on both long-term insurance business and general insurance business must apply the relevant limits in 2.5 separately for each type of business.