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Glossary

The Rulebook Glossary contains defined terms used in more than one Part across the PRA Rulebook.

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Term Definition Legal instruments for this definition

ICAAP rules

01/01/2019

means the rules in Chapter 3 (Strategies, processes and systems), Chapter 12 (Stress test and scenario analysis) and Chapter 13 (Documentation or risk assessments) of the Internal Capital Adequacy Assessment Part.

ICVC

03/07/2015

means a body incorporated under the Open-Ended Investment Companies Regulations 2001(SI 2001/1228).

IDD insurance intermediary

01/10/2018

has the meaning given in Article 2(1)(3) of the Insurance Distribution Directive.

IDD reinsurance intermediary

01/10/2018

has the meaning given in Article 2(1)(5) of the Insurance Distribution Directive.

incoming EEA firm

19/06/2014

means an EEA firm which is exercising, or has exercised, its right to carry on a regulated activity in the UK in accordance with Schedule 3 of FSMA.

incoming firm

01/02/2014

means an incoming firm within the meaning of section 193 of FSMA.

incoming Treaty firm

19/06/2014

means a Treaty firm which is exercising, or has exercised, its right to carry on a regulated activity in the UK in accordance with Schedule 4 of FSMA.

index-linked benefits

01/01/2016

means benefits:

(1) provided for under a linked long-term contract of insurance; and

(2) determined by reference to an index of the value of property of any description (whether specified in the contract or not).

index-linked liabilities

01/01/2016

means insurance liabilities in respect of index-linked benefits.

individual capital resources requirement

01/01/2016

means:

(1) in relation to an undertaking with a Part 4A permission, any capital requirement imposed by relevant provisions in the PRA Rulebook or FCA Handbook; or

(2) in relation to any other subsidiary the shares of which a firm elects to value in accordance with Insurance Company – Overall Resources and Valuation 8.1, zero.

individual conduct requirements

10/12/2018

means: 

(1) the Individual Conduct Rules and Senior Manager Conduct Rules in Conduct Rules 2 and 3;
(2) the Individual Conduct Standards and Senior Manager Conduct Standards in Insurance – Conduct Standards 3;
(3) the Individual Conduct Standards and Senior Manager Conduct Standards in Large Non-Solvency II Firms – Conduct Standards 3;
(3A) the Individual Conduct Standards in Non-Solvency II Firms – Conduct Standards 2.

individual member

03/07/2015

includes a member which is a limited liability partnership or a body corporate whose members consist only of, or of the nominees for, a single natural person or a group of connected persons.

initial margin

01/01/2016

in respect of a derivative or a contract or asset having the effect of a derivative means assets which, before or at the time the contract is entered into, are transferred by the firm subject to a condition that such assets (or, where the assets transferred are securities, equivalent securities) will be returned to the firm on completion of that contract.

institution-specific countercyclical capital buffer rate

14/12/2016

has the meaning given in Capital Buffers 3.1(1A).

insurance accounts rules

01/01/2016

means Schedule 1 to the Companies Act 1985 (Insurance Companies Accounts) Regulations 1993 (Form and Content of Accounts of Insurance Companies and Groups) where these provisions are applicable, otherwise Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) (Insurance Companies: Companies Act Individual Accounts).

insurance business

19/06/2014

means the regulated activities of effecting contracts of insurance or carrying out contracts of insurance.

insurance death risk capital component

01/01/2016

means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 15.2.

Insurance Directives

02/04/2015

means the Consolidated Life Directive and the First Non-Life Directive, Second Non-Life Directive and Third Non-Life Directive.

insurance distribution

01/10/2018

has the meaning given in Article 2(1)(1) of the Insurance Distribution Directive.

Insurance Distribution Directive

01/10/2018

means the European Parliament and Council Directive of 20 January 2016 on insurance distribution (No 2016/97/EC).

insurance expense risk capital component

01/01/2016

means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 17.2.

Insurance Groups Directive

19/06/2014

means Directive of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group (1998/78/EC).

insurance health risk and life protection reinsurance capital component

01/01/2016

means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 16.1.

insurance holding company

01/01/2016

means a parent undertaking, other than a Solvency II undertaking and a mixed financial holding company, the main business of which is to acquire and hold participations in subsidiary undertakings and which fulfils the following conditions:

(1) its subsidiary undertakings are either exclusively or mainly Solvency II undertakings, third country insurance undertakings or third country reinsurance undertakings; and

(2) at least one of those subsidiary undertakings is a Solvency II undertaking.

Additional Notes

[Note: Art. 212(1)(f) of the Solvency II Directive]

insurance liabilities

01/01/2016

in respect of a friendly society, means amounts calculated in accordance with Friendly Society – Liability Valuation in respect of those items shown at C and D under the heading “Liabilities” in Part I of Schedule 2 to the Accounts Regulations.

insurance market activities

12/10/2016

means a regulated activity relating to contracts of insurance written at Lloyd's.

insurance market risk capital component

01/01/2016

means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 18.1.

insurance risk transformation

08/12/2017

means the regulated activity specified in Article 13A of the Regulated Activities Order (Transformer vehicles: insurance risk transformation). 

insurance special purpose vehicle

01/01/2016

means an ISPV.

insurance undertaking

08/12/2017

means an undertaking or a member, that carries on insurance business, whether or not an insurer.

insurer

08/12/2017

means a firm with permission to effect contracts of insurance or carry out contracts of insurance.

intermediary

01/01/2016

means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with a friendly society, other than a person who only publishes such invitations on behalf of, or to the order of, some other person.

internal controls

19/06/2014

means the whole system of controls, financial or otherwise, established by the management of a firm in order to:

(1) carry on the business of the firm in an orderly and efficient manner;

(2) ensure adherence to management policies;

(3) safeguard the assets of the firm and other assets for which the firm is responsible; and

(4) secure as far as possible the completeness and accuracy of the firm’s records (including those necessary to ensure continuous compliance with the requirements or standards under the regulatory system relating to the adequacy of the firm’s financial resources).

internal model

01/01/2016

means the methodology used by a firm to calculate part or all of its SCR, or by a group to calculate part or all of its group SCR, in place of the standard formula.

internal model approval

01/01/2016

means:

(1) the approval granted to a firm by the PRA to use an internal model to calculate part (partial internal model) or all of its SCR;

(2) in relation to a UK Solvency II firm that is a member of a group, the approval granted to that firm by the PRA to use an internal model to calculate part (partial internal model) or all of its group SCR.

internal model significant risk profile deviation

01/01/2016

means the determination by the PRA of a significant deviation in the risk profile of a UK Solvency II firm, or a group (as appropriate), from the assumptions underlying the SCR (or group SCR, as appropriate) in circumstances where the firm’s SCR (or the group’s group SCR, as appropriate) is calculated using an internal model.

intra-group transaction

01/01/2016

has the meaning given in point (18) of Article 2 of the Financial Groups Directive.

investment

03/08/2015

means (in accordance with sections 22(4) of FSMA (Regulated activities) and section 93(2) of the Financial Services Act 2012) any investment, including any asset, right or interest.

investment firm

02/04/2015

means any person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.

investment services and/or activities

03/01/2018

means any of the services and activities listed in Section A of Annex I to MiFID II.

ISPV

08/12/2017

means:

(1) a UK ISPV; or 

(2) any other undertaking that is a Solvency II special purpose vehicle

issuer

01/01/2016

means:

(1) (in relation to any security) (other than a unit in a collective investment scheme) the person by whom it is or is to be issued;

(2) (in relation to a unit in a collective investment scheme) the operator of the collective investment scheme;

(3) (in relation to an interest in a limited partnership except for a partnership scheme) the partnership;

(4) (in relation to certificates representing certain securities) the person who issued or is to issue the security to which the certificate or other instrument relates; or

(5) an entity which issues transferable securities and, where appropriate, other financial instruments.