Term
Definition
Letter: A
accepting deposits
- 01/02/2014
accounting principles
means in the case of:
- a firm which is a company, the applicable accounting requirements for the company concerned specified in Part 15 of the Companies Act 2006 or in any provision made under that Act;
- an overseas firm, the accounting requirements as would be applicable if that firm was a company with its registered or head office in the UK; or
- any other firm, the applicable accounting requirements for the type of firm concerned as specified in any relevant legislation;
and for this purpose ‘accounting requirements’ means accounting requirements for the purposes of external financial reporting and ‘company’ has the same meaning as in section 1(1) of the Companies Act 2006.
- 22/12/2023
accounting reference date
(1) in relation to a company incorporated in the UK under the Companies Acts, means the accounting reference date of that company determined in accordance with section 391 of the Companies Act 2006; and
(2) in relation to any other body, means the last day of its financial year.
- 02/04/2015
Accounts Directives
means Council Directives 2013/34/EC, 91/674/EEC and 83/349/EEC.
- 01/01/2016
Accounts Regulations
means the Friendly Society (Accounts and Related Provisions) Regulations 1994.
- 01/01/2016
accumulating with-profits policies
means a with-profits policy which has a readily identifiable current benefit, whether or not this benefit is currently realisable, which is adjusted by an amount explicitly related to the amount of any premium payment and to which additional benefits are added in respect of participation in profits by additions directly related to the current benefit, or a policy with similar characteristics.
- 01/01/2016
actuarial body
means the Institute and Faculty of Actuaries.
- 19/06/2014
actuarial health insurance
means health insurance which meets all the conditions set out in Insurance Company – Capital Resources Requirements 13.1.
- 01/01/2016
actuarial investigation
means an investigation to which Insurance Company – Reporting 5.8 – 5.12 applies.
- 01/07/2016
actuarial valuation date
means the date as which the mathematical reserves are calculated.
- 01/01/2016
actuary
means a fellow of an actuarial body or (in connection with general insurance business) a Fellow of the Casualty Actuarial Society who is a member of an actuarial body.
- 19/06/2014
administering a benchmark
means the regulated activity specified in article 63S of the Regulated Activities Order.
- 29/06/2018
admissible assets
(1) (in relation to an insurer which is not a pure reinsurer) has the meaning in Insurance Company – Capital Resources 13; or
(2) (in relation to a pure reinsurer) means an asset the holding of which is consistent with compliance by the firm with Insurance Company – Risk Management 5.
- 01/01/2016
admission to trading
means the process by which the exchange permits members of the exchange to enter into transactions in that investment under and subject to the rules of the exchange.
- 01/01/2016
advising on investments
means the regulated activity, specified in article 53 of the Regulated Activities Order (Advising on investments).
- 03/08/2015
advising on pension transfers and pension opt-outs
means advising on investments in respect of pension transfers and pension opt-outs.
- 03/08/2015
affected market participant
has the meaning given in regulation 2(1) of The Insurers (Reorganisation and Winding Up) (Lloyd’s) Regulations 2005 (2005/1998).
- 19/09/2023
affiliated company
means (in relation to a person) an undertaking in the same group as that person.
- 01/02/2014
agreeing to carry on a regulated activity
means the regulated activity, specified in article 64 of the Regulated Activities Order (Agreeing to carry on specified kinds of activity).
- 03/08/2015
AIF
means an alternative investment fund.
- 03/08/2015
AIFM
- 03/08/2015
AIFM investment management functions
- 03/08/2015
AIFMD
means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.
- 03/08/2015
aircraft
means the class of contract of insurance, specified in paragraph 5 of Part I of Schedule 1 to the Regulated Activities Order.
- 03/07/2015
aircraft liability
means the class of contract of insurance, specified in paragraph 11 of Part I of Schedule 1 to the Regulated Activities Order.
- 03/07/2015
alternative investment fund
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a collective investment undertaking, including investment compartments thereof which:
(1) raises capital from a number of investors, with the intention of investing it in accordance with a defined investment policy for the benefit of those investors; and
(2) does not require authorisation pursuant to article 5 of the UCITS Directive.
- 31/12/2020
alternative investment fund manager
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a legal person whose regular business is managing one or more alternative investment funds.
- 31/12/2020
analogous non-reinsurance financing agreement
means analogous non-reinsurance financing agreements, including contingent loans, securitisations and any other arrangements in respect of contracts of insurance that are analogous to contracts of reinsurance in terms of the risks transferred and the finance provided.
- 01/01/2016
ancillary activity
means an activity which is not a regulated activity but which is:
(1) carried on in connection with a regulated activity; or
(2) held out as being for the purposes of a regulated activity.
- 19/06/2014
ancillary insurance services undertaking
(1) (in the Financial Conglomerates Part of the PRA Rulebook) has the meaning given in Financial Conglomerates 1.4;
(2) (in relation to the Group Supervision Part of the PRA Rulebook) means, in relation to any undertaking in a group, an undertaking complying with the following conditions:
(a) its principal activity consists of:
(i) owning or managing property;
(ii) managing data-processing services;
(iii) providing health and care services; or
(iv) any other similar activity;
(b) the activity in (a) is ancillary to the principal activity of one or more insurance undertakings; and
(c) those insurance undertakings are also members of that group.
- 07/07/2023
ancillary own funds
- 31/12/2020
ancillary service
The changes to this defined term are effective from 23:00 on 31/12/2020.
means any of the services listed in Part 3A of Schedule 2 to the Regulated Activities Order.
- 31/12/2020
ancillary services undertaking
- 01/01/2016
Annex II benchmark administrator
has the meaning given in the Glossary to the FCA Handbook.
- 29/06/2018
annual report and accounts
means
(1) (in relation to a company incorporated in the UK) an annual report and annual accounts as those terms are defined in section 471 of the Companies Act 2006 together with an auditor's report prepared in relation to those accounts under sections 495 to 497A of the same Act;
(2) (in relation to any other body) any similar or analogous documents which it is required to prepare whether by its constitution or by the law under which it is established.
- 03/08/2015
appointed representative
has the meaning given in s39(2) FSMA.
- 02/04/2015
approved counterparty
means any of the following:
(1) an approved credit institution;
(2) a firm whose permission including dealing in investments as principal with respect to derivatives which are not listed;
(3) a MiFID investment firm whose authorisation (as referred to in Article 5 of MiFID II) authorises it to carry on activities of the kind referred to in (2); or
(4) in respect of a transaction involving a new issue of securities which are to be listed, the issuer or a MiFID investment firm acting on behalf of the issuer.
- 03/01/2018
approved credit institution
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a credit institution recognised or permitted under the law of the UK to carry on any of the activities set out in Annex 1 to the CRD.
- 31/12/2020
approved derivative
means a derivative in respect of which the conditions in Insurance Company – Risk Management 6.2 are met.
- 01/01/2016
approved financial institution
The changes to this defined term are effective from 23:00 on 31/12/2020.
means any of the following:
(1) the European Central Bank;
(2) the central bank of an EEA State;
(3) the International Bank for Reconstruction and Development;
(4) the European Bank for Reconstruction and Development;
(5) the International Finance Corporation;
(6) the International Monetary Fund;
(7) the Inter-American Development Bank;
(8) the African Development Bank;
(9) the Asian Development Bank;
(10) the Caribbean Development Bank;
(11) the European Investment Bank;
(12) the EU;
(13) the European Atomic Energy Community; and
(14) the Bank of England.
- 31/12/2020
approved person
means a person in relation to whom the FCA or the PRA has given its approval under section 59 of FSMA (Approval for particular arrangements) for the performance of a controlled function.
- 19/06/2014
approved quasi-derivative
means a quasi-derivative in respect of which the conditions in Insurance Company – Risk Management 6.2 are met.
- 01/01/2016
approved reinsurance to close
means;
(1) a reinsurance to close effected before 1 January 2005; or
(2) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with the members of that syndicate in a later syndicate year or the members of one other syndicate ("the reinsuring members") that the reinsuring members will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year that is:
(a) effected after 1 January 2005; and
(b) not a balance transfer between two syndicate years where the syndicate has only one member and the member is the same in each of those years; or
(3) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with a subsidiary of the Society that that subsidiary will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year ("the reinsured liabilities") and where:
(a) that subsidiary is wholly owned by the Society and if from time to time the subsidiary has an asset or cash flow deficiency such that the subsidiary is unable to meet any of the liabilities which it has reinsured, the Society is legally obliged to pay to the subsidiary a sum equal to that deficiency; and
(b) at the effective date of the agreement, the relevant syndicate year has been open for at least two years after the date at which it would normally have been closed in accordance with the policies and practices in relation to the syndicate concerned.
- 01/01/2016
approved security
means any of the following:
(1) any security issued or guaranteed by, or the repayment of the principal of which, or the interest of which, is guaranteed by, and any loans to or deposits with, any government, public or local authority or national industry or undertaking, which belongs to an approved State;
(2) any loan to, or deposit with, an approved financial institution; and
(3) any debenture issued before 31 December 1994 by the Agricultural Mortgage Corporation Limited on the Scottish Agricultural Securities Corporation Limited.
- 01/01/2016
approved State
- 31/12/2020
approved stock lending transaction
means a stock lending transaction in respect of which the conditions in Insurance Company – Risk Management 8.2 have been met.
- 01/01/2016
arranging (bringing about) deals in investments
means the regulated activity specified in article 25(1) of the Regulated Activities Order.
- 03/08/2015
arranging safeguarding and administration of assets
that part of safeguarding and administering investments which consists solely of arranging for one or more other persons to carry on both:
(a) the safeguarding of assets belonging to another; and
(b) the administration of those assets.
- 03/08/2015
Article 109 undertaking
- 29/12/2020
Article 18(5) relationship
means a relationship where undertakings are linked by participations or capital ties other than those referred to in paragraphs (1) and (4) of Article 18 of the CRR.
- 29/12/2020
Article 18(6) relationship
means a relationship of one of the following kinds:
(1) where an institution exercises a significant influence over one or more institutions or financial institutions, but without holding a participation or other capital ties in these institutions; or
(2) where two or more institutions or financial institutions are placed under single management other than pursuant to a contract or clauses of their memoranda or articles of association.
- 01/01/2016
asset management company
The changes to this defined term are effective from 23:00 on 31/12/2020.
means an undertaking with a Part 4A permission under Article 51ZA of the Regulated Activities Order (Managing a UCITS) or an undertaking, the registered office of which is outside the UK and which would require such permission if it had its registered office within the UK.
- 31/12/2020
asset type
means a category of assets that have similar features and/or similar methodologies for the purposes of determining the credit rating or internal credit assessment for that type of asset.
- 30/06/2024
assigned asset
means an asset contained in the relevant portfolio of assets, that falls within the scope of Matching Adjustment 4.4(1).
- 30/06/2024
associate
means (in relation to a person ("A")):
(1) an affiliated company of A;
(2) an appointed representative of A, or a tied agent of A, or of any affiliated company of A; and
(3) any other whose business or domestic relationship with A or A’s associate might reasonably be expected to give rise to a community of interest between them which may involve a conflict of interest in dealings with third parties.
- 02/04/2015
audit committee
means a committee established in accordance with Audit Committee 2.1.
- 01/01/2019
authorised contractual scheme
This term is defined externally, please refer to:
s237(3) FSMA
- 01/01/2016
authorised electronic money institution
has the meaning given in regulation 2(1) of the Electronic Money Regulations.
- 12/03/2023
authorised payment institution
has the meaning given in regulation 2(1) of the Payment Services Regulations.
- 12/03/2023
authorised person
This term is defined externally, please refer to:
s417(1) FSMA
- 02/04/2015
authorised UK representative
- 01/01/2016
authorised unit trust scheme
This term is defined externally, please refer to:
s237(3) FSMA
- 01/01/2016
Letter: B
bank
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a firm with a Part 4A permission to carry on the regulated activity of accepting deposits and is a credit institution, but is not a credit union, friendly society or a building society.
- 31/12/2020
Bank of England
This term is defined externally, please refer to:
Schedule 1 Interpretation Act 1978
- 01/01/2014
banking and investment services conglomerate
means a financial conglomerate that is identified in paragraph 3.1 of Annex 2 (Capital Adequacy Calculations for Financial Conglomerates) of the Financial Conglomerates part of the PRA Rulebook as a ‘banking and investment services conglomerate’.
- 12/08/2022
basic own funds
- 31/12/2020
basic relevant risk-free interest rate term structure
means the relevant risk-free interest rate term structure without:
- (1) a matching adjustment;
- (2) a volatility adjustment; or
- (3) a risk-free interest rate transitional measure.
- 30/06/2024
basic SCR
- 01/01/2016
benchmarking activities
means the following activities:
(1) the regulated activity of administering a benchmark; or
(2) contribution of input data to a BMR benchmark administrator.
- 29/06/2018
benchmarks regulation
means Regulation (EU) No. 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014.
- 29/06/2018
beneficiary
means any person who is entitled to a right under a contract of insurance.
- 01/01/2016
best estimate
means the best estimate of future cash-flows, calculated in accordance with Technical Provisions 3.
- 01/01/2016
BMR benchmark administrator
means a person who:
(1) is an administrator within the meaning of article 3.1(6) of the benchmarks regulation; and
(2) has been authorised or registered (whether in the UK or elsewhere) in accordance with article 34 of the benchmarks regulation.
- 29/06/2018
body corporate
- 01/02/2014
branch
The changes to this defined term are effective from 23:00 on 31/12/2020.
means
(1) (in relation to a credit institution) a place of business which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of credit institutions.
(2) (in relation to an investment firm) a place of business which:
(a) is not the firm’s head office;
(b) is part of the firm;
(c) has no legal personality; and
(d) provides investment services and/or activities; and
(e) may also perform ancillary services for which the investment firm has permission under Part 4A of FSMA.
(3) (in relation to an insurance undertaking) any permanent presence of the insurance undertaking in the UK which:
(a) is managed by the insurance undertaking's own staff; or
(b) is an agency of the insurance undertaking; or
(c) is managed by a person who is independent of the insurance undertaking, but has permanent authority to act for the insurance undertaking as an agency would.
(4) (in relation to an IDD insurance intermediary) a place of business which is a part of an IDD insurance intermediary, not being the principal place of business, which has no separate legal personality and which provides insurance distribution for which the IDD insurance intermediary has been registered.
(5) (in relation to an IDD reinsurance intermediary) a place of business which is a part of an IDD reinsurance intermediary, not being the principal place of business, which has no separate legal personality and which provides reinsurance distribution for which the IDD reinsurance intermediary has been registered.
- 31/12/2020
brought forward amount
means an amount, as defined in Insurance Company – Capital Resources Requirements 10.1 to 10.3 in the Non-Solvency II Firms Sector, used in the calculation of the general insurance capital requirement.
- 01/01/2016
BRRD
means Directive 2014/59/EU of the European Parliament and the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU , and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council.
- 19/01/2015
BRRD undertaking
means a CRR firm or a qualifying parent undertaking of a CRR firm.
- 19/01/2015
building society
- 01/01/2014
business day
means:
(1) (in relation to anything done or to be done in (including to be submitted to a place in) any part of the UK) any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in that part of the UK;
(2) (in relation to anything done or to be done by reference to a market outside the UK) any day on which that market is normally open for business.
- 19/06/2014
byelaw
means any byelaw, direction, regulation, or other instrument made using the powers of the Council under section 6 of Lloyd's Act 1982 (including any regulation ratified by the Council by special resolution) and any condition or requirement made under any such byelaw, direction, regulation or other instrument.
- 03/07/2015
Letter: C
capital add-on
- 01/01/2016
capital redemption
means the class of contract of insurance, specified in paragraph VI of Part II of Schedule 1 to the Regulated Activities Order.
- 01/01/2016
Capital Requirements Regulations
- 19/06/2014
capital resources
means the firm’s capital resources as calculated in accordance with Insurance Company – Capital Resources 2.1.
- 01/01/2016
capital resources table
means the capital resources calculation table at Insurance Company – Capital Resources Table 2.1.
- 01/01/2016
carrying out contracts of insurance
means the regulated activity specified in article 10(2) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).
- 19/06/2014
cash-flows that are not fixed
means any cash-flows that are not fixed or that are capable of being changed by issuers of the assets or any third parties, but excluding any cash-flows that fall within the scope of regulation 4(9)(b) or (c) of the IRPR regulations.
- 30/06/2024
central assets
means the Society's own assets that are available at its discretion to meet a member's liabilities in respect of insurance business.
- 01/01/2016
central bank
This term is defined externally, please refer to:
Article 4(1)(46) CRR.
- 01/01/2022
central bank claim
means a firm’s exposures to a central bank that are denominated in the national currency of the central bank and represented by:
- (1) banknotes and coins constituting legal currency in the jurisdiction of the central bank;
- (2) reserves held by the firm at the central bank;
- (3) reserves held by or on behalf of the firm in an omnibus account at the central bank; or
- (4) any assets representing debt claims on the central bank with a maturity of no longer than three months.
- 05/08/2024
central counterparty
This term is defined externally, please refer to:
Article 4(1)(34) CRR
- 01/01/2019
Central Fund
means the Central Fund established under Lloyd's Central Fund Byelaw (No 4 of 1986) and the New Central Fund established under Lloyd's New Central Fund Byelaw (No 23 of 1996).
- 03/07/2015
central liabilities
- 01/01/2016
central requirement
means the calculation made by the Society pursuant to the requirements of Solvency Capital Requirement – General Provisions 7.3.
- 01/01/2016
certificate
means a certificate issued under section 63F(1) of FSMA (Issuing of certificates).
- 07/03/2016
certification employee
means an employee (within the meaning in section 63E(9) of FSMA (certification of employees by authorised persons)) of a firm who has a valid certificate issued by that firm.
- 10/12/2018
certification function
The changes to this defined term are effective from 23:00 on 31/12/2020.
means:
(1) for a CRR firm, a credit union and a third country CRR firm in relation to the activities of its establishment in the UK or if it does not have an establishment in the UK its activities in the UK, has the meaning given in Certification 2.2 – 2.4;
(2) for a UK Solvency II firm, the Society, a managing agent, a third country branch undertaking (other than a Swiss general insurer) and a UK ISPV has the meaning given in Insurance – Certification 2;
(3) for a large non-directive insurer and a Swiss general insurer has the meaning given in Large Non-Solvency II Firms – Certification 2; and
(4) for a small non-directive insurer has the meaning given in Non-solvency II Firms – Certification 2.
- 31/12/2020
certification regime
means the requirements of the regulatory system which apply to authorised persons insofar as they relate to persons performing certification functions including those set out in Certification, Fitness and Propriety, Insurance – Certification, Insurance – Fitness and Propriety, Large Non-Solvency II Firms – Certification, Large Non-Solvency II Firms – Fitness and Propriety, Non-Solvency II Firms – Certification and Non-Solvency II Firms – Fitness and Propriety and the corresponding FCA requirements in SYSC 27 and FIT of the FCA Handbook.
- 10/12/2018
Chair of Audit Committee function
has the meaning given in Senior Management Functions 4.4.
- 10/12/2018
Chair of Remuneration Committee function
has the meaning given in Senior Management Functions 4.5.
- 10/12/2018
Chair of Risk Committee function
has the meaning given in Senior Management Functions 4.3.
- 10/12/2018
Chair of the Governing Body function
has the meaning given in Senior Management Functions 4.2.
- 10/12/2018
Chief Risk function
has the meaning given in Senior Management Functions 3.4.
- 01/01/2019
claims amount
means an amount, as defined in Insurance Company – Capital Resources Requirements 9.1 in the Non-Solvency II Firms Sector, used in the calculation of the general insurance capital requirement.
- 01/01/2016
class
means (in relation to a contract of insurance) any class of contract of insurance listed in Schedule 1 to the Regulated Activities Order.
- 01/01/2016
clearing member
This term is defined externally, please refer to:
Article 300(3) CRR
- 01/01/2019
client
has the meaning given in the FCA Handbook other than for the purposes of the part of the FCA Handbook in Specialist sourcebooks that has the title Professional Firms.
- 02/04/2015
close links
(in the Solvency II Firms Sector of the PRA Rulebook) means a situation in which two or more persons are linked by control or participation, or a situation in which two or more persons are permanently linked to one and the same person by a control relationship.
- 01/01/2016
collateral
means
(1) (in relation to any transaction) a mortgage, charge, pledge or other security interest or, as the context may require, an asset that is subject to a mortgage, charge, pledge or other security interest; and
(2) (in relation to a stock lending, repo or derivative transaction only):
(a) a transfer of assets (other than by way of sale) subject to a right of the transferor to have transferred back to it the same, or equivalent, assets or, as the context may transferor; or
(b) a letter of credit,
where the assets are transferred, or the letter of credit is issued, to secure the performance of the obligations of one of the parties to that transaction.
- 01/01/2016
collective investment scheme
This term is defined externally, please refer to:
s235(1) FSMA
- 01/01/2016
commodity future
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
commodity option
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
common management relationship
- 31/12/2020
compensation funds
The changes to this defined term are effective from 23:00 on 31/12/2020.
means any policyholder compensation scheme in the UK.
- 31/12/2020
compensation scheme
means the Financial Services Compensation Scheme established under section 213 of FSMA.
- 03/07/2015
competent authority
The changes to this defined term are effective from 23:00 on 31/12/2020.
means:
(1) the PRA, in respect of PRA-authorised persons within the meaning of section 2B(5) of FSMA;
(2) in relation to a MiFID investment firm the authority designated before IP completion day by the UK in accordance with Article 67 of MiFID II;
- 31/12/2020
composite firm
means a firm that carries on both long-term insurance business and general insurance business.
- 01/01/2016
Conduct Rules non-executive director
means, in relation to a firm, a person who:
(1) is a member of the board of directors of the firm or, if there is no such board, the equivalent body responsible for the management of the firm;
(2) is not an approved person in relation to the firm; and
(3) does not perform an executive function in relation to that firm.
- 03/07/2017
conduct standards
- 31/12/2020
consolidated basis
has the meaning given in point (48) of Article 4(1) of the CRR.
- 12/08/2022
Consolidated Life Directive
means the Council Directive of 5 November 2002 on the taking-up and pursuit of the business of life assurance (No 2002/83/EC), which consolidates the provisions of the First Life Directive, the Second Life Directive and the Third Life Directive.
- 19/06/2014
consolidated situation
This term is defined externally, please refer to:
Article 4(1)(47) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012
- 31/03/2022
consolidating supervisor
This defined term is effective from 23:00 on 31/12/2020.
means the competent authority responsible for the exercise of supervision on a consolidated basis of:
(1) a UK parent institution; or
(2) an institution controlled by a UK parent financial holding company or UK parent mixed financial holding company.
- 31/12/2020
consolidation group
- 30/03/2018
contract for differences
means the investment specified in article 85 of the Regulated Activities Order.
- 01/01/2016
contract of differences
means the investment specified in article 85 of the Regulated Activities Order.
- 03/08/2015
contract of insurance
(in relation to a specified investment) the investment, specified in article 75 of the Regulated Activities Order (Contracts of insurance), which is rights under a contract of insurance in (2) below.
(in relation to a contract) has the meaning given in Article 3(1) of the Regulated Activities Order.
- 03/08/2015
contracts of general insurance
has the meaning given in article 3(1) of the Regulated Activities Order.
- 19/06/2014
contracts of long-term insurance
has the meaning given in article 3(1) of the Regulated Activities Order.
- 19/06/2014
contractually based investment
has the meaning provided in Article 3(1) of the Regulated Activities Order.
- 03/08/2015
contribution of input data
has the meaning given in article 3.1(8) of the benchmarks regulation.
- 29/06/2018
control
The changes to this defined term are effective from 23:00 on 31/12/2020.
(in the Solvency II Firms Sector of the PRA Rulebook) means the relationship between a parent undertaking and a subsidiary undertaking where that relationship falls within (1) to (6) of the definition of parent undertaking, or a similar relationship between any person and an undertaking.
- 31/12/2020
controlled function
means a function, relating to the carrying on of a regulated activity by a firm, which is specified by either the FCA or the PRA, under section 59 of FSMA (Approval for particular arrangements).
- 19/06/2014
conversion notification
means a notice required to be sent to the PRA under article 2(1) or 11(b) of the Transitional Order including any update to such a notice.
- 10/12/2018
coordinator
The changes to this defined term are effective from 23:00 on 31/12/2020.
has the meaning given in regulation 1(2) of The Financial Conglomerates Regulations.
- 31/12/2020
core UK group
means all counterparties that:
(a) are listed in a firm’s core UK group permission;
(b) in relation to a firm, satisfy the conditions in Article 113(6) of the CRR; and
(c) in respect of which exposures are exempted, under Article 400(1)(f) of the CRR, from the application of Article 395(1) of the CRR.
- 03/08/2015
- 03/08/2015
Council
means the governing body of the Society constituted by section 3 of the Lloyd’s Act 1982.
- 19/06/2014
countercyclical leverage ratio buffer
means the amount of common equity tier 1 capital as defined in Article 50 of the CRR a firm or CRR consolidation entity must calculate in accordance with 4.1 and 4.2 of the Leverage Ratio – Capital Requirements and Buffers Part.
- 01/01/2022
counterparty
means in relation to an insurer:
(1) any one individual;
(2) any one unincorporated body of persons;
(3) any one undertaking not being a member of a group;
(4) any group undertakings excluding any undertakings within the group which are subsidiaries of the firm; or
(5) any government of a State together with all the public bodies, local authorities or nationalised industries of that State,
in which the firm has made investments or against whom it has rights whether under of a contract entered into by the firm or otherwise.
- 01/01/2016
covered bonds
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a debenture that is issued by a credit institution which:
(1) has its head office in the UK; and
(2) is subject by law to special official supervision designed to protect the holders of the debenture; in particular, sums deriving from the issue of the debenture must be invested in accordance with the law in assets which, during the whole period of validity of the debenture, are capable of covering claims attaching to the debenture and which, in the event of failure of the issuer, would be used on a priority basis for the reimbursement of the principal and payment of the accrued interest.
- 31/12/2020
CR Requirement
means an amount of capital resources that a firm must hold as set out in Insurance Company – Capital Resources Requirements 4 and 5.
- 01/01/2016
CRD
means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
- 01/01/2014
CRD credit institution
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a credit institution that has its registered office (or, if it has no registered office, its head office) in the UK, excluding an institution to which the CRD does not apply under Article 2 of the CRD.
- 31/12/2020
credit institution
- 12/08/2022
credit quality step
means the credit quality steps 0 to 6 set out in the Annex to Commission Implementing Regulation 2016/1800.
- 30/06/2024
credit quality step pair
means, a sequential pair of credit quality steps, paired in the order in which they are set out in the Annex to Commission Implementing Regulation 2016/1800.
- 30/06/2024
credit rating
has the meaning given to that term in regulation 2(1) of the IRPR regulations.
- 30/06/2024
credit rating agency
has the meaning given to that term in Regulation 2(1) of the IRPR regulations.
- 30/06/2024
credit risk
The changes to this defined term are effective from 23:00 on 31/12/2020.
means the risk of loss, or of adverse change, in the financial situation, resulting from fluctuations in the credit standing of issuers of securities, counterparties and any debtors to which a UK Solvency II firm is exposed, in the form of counterparty default risk, or spread risk, or market risk concentrations.
- 31/12/2020
credit union
means a credit union as defined by:
(1) the Credit Unions Act 1979; or
(2) the Credit Unions (Northern Ireland) Order 1985
which is an authorised person.
- 06/09/2016
credit union non-executive director
means a non-executive director of a credit union who is not an approved person in relation to that credit union.
- 07/03/2016
Credit Union Senior Manager function
has the meaning given in Senior Management Functions 6.2.
- 07/03/2016
critical functions
has the meaning in section 3(1) and (2) of the Banking Act 2009.
- 01/01/2023
critical services
means activities, functions or services performed for one or more business units of the firm or for the firm and another member of its group, whether by the firm itself, any other group member or a person outside the firm’s group, the failure of which would lead to the collapse of or present a serious impediment to the performance of the firm’s critical functions.
- 01/01/2019
CRR
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.
- 01/01/2014
CRR consolidation entity
means the PRA approved parent holding company, the PRA designated parent holding company or the PRA designated institution or where there is not one for the group concerned, the UK parent institution for that group.
- 17/09/2021
CRR firm
- 01/01/2014
CRR permission
- 01/01/2016
CRR rules
has the same meaning as in section 144A of FSMA.
- 01/01/2022
CSD
has the meaning given in Article 2(1)(1) of CSDR.
- 08/12/2023
CSDR
means Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012.
- 08/12/2023
Letter: D
data element
means a discrete fact or individual piece of information relating to a particular field within a data item.
- 01/10/2018
data item
means one or more related data elements that are:
(1) grouped together into a prescribed format or grouped together and "no standard format" is specified; and
(2) required to be submitted by a firm.
- 01/01/2019
dealing
- 01/01/2016
dealing in investments as agent
means the regulated activity, specified in article 21 of the Regulated Activities Order (Dealing in investments as agent).
- 03/08/2015
dealing in investments as principal
- 19/06/2014
debenture
means the investment, specified in article 77 of the Regulated Activities Order.
- 01/01/2016
debt
includes an obligation to pay a sum of money under a negotiable instrument.
- 01/01/2016
debts due or to become due
includes any debts which would become due if the friendly society were to exercise any right to which it is entitled to require payment or repayments of the same.
- 01/01/2016
default
has the meaning given to that term in Article 4(4) of Commission Implementing Regulation 2016/1799.
- 30/06/2024
deferred acquisition costs
has the meaning in the insurance accounts rules.
- 01/01/2016
deficit reduction amount
means in respect of a defined benefit occupational pension scheme, the sum, determined by a firm in conjunction with the defined benefit occupational pension scheme’s actuaries or trustees (or both), of the additional funding (net of tax) that will be required to be paid into that scheme by the firm over the following five year period for the purpose of reducing the firm’s defined benefit liability.
- 01/01/2016
defined benefit asset
means the excess of the value of the assets in a defined benefit occupational pension scheme over the present value of the scheme liabilities, to the extent that a firm, as employer, in accordance with the accounting principles applicable to it, should recognise that excess as an asset in its balance sheet.
- 01/01/2016
defined benefit liability
means the shortfall of the value of the assets in a defined-benefit occupational pension scheme below the present value of the scheme liabilities, to the extent that a firm, as employer, in accordance with the accounting principles applicable to it, should recognise that shortfall as a liability in its balance sheet.
- 22/12/2023
defined benefit occupational pension scheme
means an occupational pension scheme which is not a defined contribution occupational pension scheme.
- 01/01/2016
defined contribution occupational pension scheme
means an occupational pension scheme into which a firm, as employer, pays regular fixed contributions and will have no legal or constructive obligation to pay further contributions if the scheme does not have sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
- 01/01/2016
deposit
means the investment, specified in article 74 and defined in articles 5(2) and 5(3) of the Regulated Activities Order.
- 01/01/2016
deposit back arrangement
(in relation to any reinsurance contract) means an arrangement whereby an amount is deposited by the reinsurer with the cedant.
- 01/01/2016
derivative
means a contract for differences, a future or an option.
- 01/01/2016
designated additional information
means such information in such form as may be required pursuant to Article 4 of the Commission Delegated Regulation (EU) 2017/1943 of 14 July 2016 supplementing MiFID II of the European Parliament and of the Council with regard to regulatory technical standards on information and requirements for the authorisation of investment firms as amended from time to time.
- 03/01/2018
designated investment
means a security or a contractually-based investment (other than a funeral plan contract and a right to or interest in a funeral plan contract), that is, any of the following investments, specified in Part III of the Regulated Activities Order (Specified Investments), and a long-term care insurance contract which is a pure protection contract:
(1) life policy (subset of article 75 (Contracts of insurance));
(2) share;
(3) debenture (article 77);
(4) alternative debenture (article 77A);
(5) government and public security (article 78);
(6) instruments giving entitlements to investments (article 79);
(7) certificate representing certain securities (article 80);
(8) unit in a collective investment scheme (article 81);
(9) rights under a stakeholder pension scheme (article 82(1))
(10) rights under a personal pension scheme (article 82(2));
(11) Greenhouse gas allowances which are auctioned (article 82A), where they are a financial instrument.
(12) option; for the purposes of the permission regime, this is sub-divided into:
(a) option (excluding a commodity option and an option on a commodity future);
(b) commodity option and option on a commodity future;
(13) future; for the purposes of the permission regime, this is sub-divided into:
(a) future (excluding a commodity future and a rolling spot forex contract);
(b) commodity future;
(c) rolling spot forex contract;
(14) contract for differences; for the purposes of the permission regime, this is sub-divided into:
(a) contract for differences (excluding a spread bet and a rolling spot forex contract);
(b) spread bet;
(c) rolling spot forex contract;
(15) rights to or interests in investments in (1) to (14) (article 89) but not including rights to or interests in rights under a long-term care insurance contract which is a pure protection contract.
- 03/08/2015
designated investment business
means any of the following activities, specified in Part II of the Regulated Activities Order (Specified Activities), which is carried on by way of business:
(1) dealing in investments as principal, but disregarding the exclusion in article 15 (Absence of holding out etc);
(2) dealing in investments as agent but only in relation to designated investments;
(3) the regulated activity of bidding in emissions auctions (article 24A of the Regulated Activities Order) where it is carried on by a MiFID investment firm (other than a UCITS investment firm, as defined in the FCA Handbook) in relation to a financial instrument;
(4) arranging (bringing about) deals in investments, but only in relation to designated investments;
(5) making arrangements with a view to transactions in investments, but only in relation to designated investments;
(6) operating a multilateral trading facility;
(7) managing investments, but only if the assets consist of or include (or may consist of or include) designated investments;
(8) assisting in the administration and performance of a contract of insurance, but only if the contract of insurance is a designated investment;
(9) safeguarding and administering investments, but only if the assets consist of or include (or may consist of or include) designated investments; for the purposes of the permission regime, this is sub-divided into:
(a) safeguarding and administration of assets (without arranging);
(b) arranging safeguarding and administration of assets;
(10) sending dematerialised instructions (article 45(1));
(11) causing dematerialised instructions to be sent (article 45(2));
(12) establishing, operating or winding up a stakeholder pension scheme);
(13) establishing, operating or winding up a personal pension scheme;
(14) providing basic advice on a stakeholder product (article 52B);
(15) advising on investments, but only in relation to designated investments; for the purposes of the permission regime, this is sub-divided into:
(a) advising on investments (except pension transfers and pension opt-outs);
(b) advising on pension transfers and pension opt-outs;
(16) agreeing to carry on a regulated activity in (1) to (11) and (15) (article 64);
(17) managing a UCITS;
(18) acting as trustee or depositary of a UCITS (article 51ZB);
(19) managing an AIF;
(20) acting as trustee or depositary of an AIF (article 51ZD);
(21) establishing, operating or winding up a collective investment scheme.
- 03/08/2015
designated investment firm
means an investment firm that has been designated by the PRA under Article 3 of Financial Services and Markets Act 2000 (PRA-regulated Activities) Order (S.I. 2013/556).
- 05/09/2014
direct EU legislation
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given in section 3(2) of the European Union (Withdrawal) Act 2018.
- 31/12/2020
director
means (in relation to any of the following (whether constituted in the UK or under the law of a country or territory outside it)):
(a) an unincorporated association;
(b) body corporate;
any person appointed to direct its affairs, including a person who is a member of its governing body and (in accordance with section 417(1) of FSMA):
(i) a person occupying in relation to it the position of a director (by whatever name called); and
(ii) a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of that body are accustomed to act.
- 01/02/2014
disciplinary action
has the meaning given in section 64C of FSMA.
- 10/12/2018
diversification effects
- 01/01/2016
domestic liquidity sub-group
- 01/01/2022
dormant account fund operator
a person with a Part 4A permission for operating a dormant account fund.
- 03/08/2015
Letter: E
EBA
means the European Banking Authority.
- 01/01/2014
EEA State
has the meaning given in the Interpretation Act 1978 and, where the context requires, includes references to Gibraltar as appropriate.
- 01/10/2015
effecting contracts of insurance
means the regulated activity specified in article 10(1) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).
- 19/06/2014
EIOPA
means the European Insurance and Occupational Pensions Authority established in accordance with Regulation (EU) No. 1094/2010 of the European Parliament and of the Council of 24 November 2010.
- 01/01/2016
Electronic Money Regulations
means the Electronic Money Regulations 2011 (SI 2011/99).
- 12/03/2023
eligible counterparty
has the meaning given in the FCA Handbook as amended from time to time for the purposes other than for the purposes of the part of the FCA Handbook in High Level Standards that has the title Principles for Businesses.
- 03/01/2018
eligible deposit
has the meaning given in Depositor Protection 2.
- 03/02/2016
eligible own funds
- 31/12/2020
eligible Tier 2 own funds
- 01/01/2016
eligible Tier 3 own funds
- 01/01/2016
employee
for the purposes of SYSC 4.15, means an individual:
(1) who is employed or appointed by a person in connection with that person's business, whether under a contract of service or for services or otherwise; or
(2) whose services, under an arrangement between that person and a third party, are placed at the disposal and under the control of that person.
- 07/09/2016
employee
means an individual:
(1) who is employed or appointed by a person in connection with that person's business, whether under a contract of service or for services or otherwise; or
(2) whose services, under an arrangement between that person and a third party, are placed at the disposal and under the control of that person.
- 19/06/2014
employers’ liability
means a contract of insurance against risks of the persons insured incurring liabilities to their employees.
- 01/01/2016
equity share capital
means issued share capital excluding any part of that capital which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.
- 01/01/2016
equivalent securities
means securities issued by the same issuer being of an identical type and having the same nominal value, description and amount.
- 01/01/2016
established surplus
means an excess of assets representing the whole or a particular part of the long-term insurance fund or funds over the liabilities, or a particular part of the liabilities of the insurer attributable to that business as shown by an actuarial investigation.
- 01/01/2016
establishing, operating or winding up a personal pension scheme
means the regulated activity, specified in article 52(b) of the Regulated Activities Order (Establishing etc. a pension scheme).
- 03/08/2015
establishing, operating or winding up a stakeholder pension scheme
means the regulated activity, specified in article 52 (a) of the Regulated Activities Order (Establishing etc. a pension scheme).
- 03/08/2015
establishing, operating or winding-up a collective investment scheme
means the regulated activity specified in article or 51ZE of the Regulated Activities Order (Establishing etc a collective investment scheme).
- 03/08/2015
EU
This term is defined externally, please refer to:
s1(2) Interpretation Act 1978
- 01/01/2016
EU directive
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given in section 20(1) of the European Union (Withdrawal) Act 2018.
- 31/12/2020
EU-derived domestic legislation
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given in section 2(2) of the European Union (Withdrawal) Act 2018.
- 31/12/2020
European Economic Area
means the area established by the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as it has effect for the time being and which consists of the EEA States.
- 02/04/2015
exceptional adverse situation
means situations where the financial situation of a firm representing a significant share of the market or the affected lines of business is seriously or adversely affected by one or more of the following:
(1) a fall in financial markets which is unforeseen, sharp and steep;
(2) a persistent low interest rate environment;
(3) a high impact catastrophic event.
- 01/01/2016
Excluded Activities and Prohibitions Order
means the Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014 (SI 2014/2080).
- 01/01/2019
excluded assets
means, in relation to a with-profits fund, those assets which the firm has clearly identified in its policy documentation, PPFM, other policyholder communication or otherwise in accordance with any relevant provision of the FCA Handbook as:
(1) available to cover the firm’s liabilities arising from with-profits policies only in particular circumstances; and
(2) not forming part of that with-profits fund.
- 01/01/2016
excluded credit union
for the purposes of SYSC 4.15, means a credit union which has average total gross assets of £250 million or less, determined on the basis of the annual average amount of gross assets calculated across a rolling period of five years or, if it has been in existence for less than five years, across the period during which it has existed (in each case, calculated with reference to the credit union's annual accounting reference date).
- 07/09/2016
expense risk
means the risk of loss, or of adverse change, in the value of insurance obligations, resulting from changes in the level, trend or volatility of the expenses incurred in servicing contracts of insurance or reinsurance contracts.
- 30/06/2024
Letter: F
FCA
This term is defined externally, please refer to:
FSMA s417
- 29/04/2014
FCA activities
means a function which would, except for SUP 10C.9.8R or SUP TP 11.2.11R of the FCA Handbook, be an FCA governing function.
- 10/12/2018
FCA activities notification
means:
(1) in respect of a PRA senior management approval application that was made prior to 10 December 2018, the notification required by SUP 10A.11.12R(4) of the FCA Handbook;
(2) in respect of a PRA senior management approval application made on or after 10 December 2018, the notification required by SUP 10C.9.8R(4) of the FCA Handbook.
- 10/12/2018
FCA approval
means at any time an approval granted to and in effect for a person by the FCA under section 59 of FSMA (Approval for particular arrangements) for the performance of a controlled function specified by the FCA.
- 07/03/2016
FCA controlled function
means a controlled function specified by the FCA under section 59 of FSMA.
- 07/03/2016
FCA controlled function
means a controlled function specified by the FCA under section 59 of FSMA (Approval for particular arrangements).
- 07/03/2016
FCA governing function
means any of the FCA controlled functions labelled as FCA governing functions in the table of FCA-designated senior management functions in SUP 10C.4.3R of the FCA Handbook.
- 10/12/2018
FCA Handbook
means the FCA’s Handbook of rules and guidance as amended from time to time.
- 02/04/2015
FCA responsibilities
means any of:
(1) the responsibilities set out in SYSC 24.2.6R (Table of FCA-prescribed senior management responsibilities) of the FCA Handbook; and
(2) the responsibilities allocated under SYSC 26.3 of the FCA Handbook;
(3) [Deleted.]
(4) [Deleted.]
- 10/12/2018
FCA-authorised person
means (in accordance with section 31 of FSMA (Authorised persons)) an authorised person who is not a PRA-authorised person.
- 07/03/2016
FCA-authorised person
means (in accordance with section 31 of FSMA (Authorised persons)) an authorised person who is not a PRA-authorised person.
- 07/03/2016
FCA-designated senior management function
means an FCA controlled function specified in SUP 10C.4.3R of the FCA Handbook.
- 07/03/2016
final bonus
(in relation to with-profits policy) means a discretionary payment which might be made by a long-term insurer, in addition to the guaranteed benefits, when the benefits under the with-profits policy become payable.
- 01/01/2016
finance scheme
means the finance scheme required to be provided by a UK Solvency II firm to the PRA under Undertakings in Difficulty 4.1(2).
- 01/01/2016
financial conglomerate
has the meaning given in Financial Conglomerates 2.1.
- 01/01/2016
Financial Conglomerates Regulations
This defined term is effective from 23:00 on 31/12/2020.
means the Financial Conglomerates and Other Financial Groups Regulations 2004 (SI 2004/1862).
- 31/12/2020
Financial Groups Directive
means Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate.
- 03/08/2015
financial holding company
has the meaning given in point (20) of Article 4(1) of the CRR.
- 12/08/2022
financial institution
has the meaning given in point (26) of Article 4(1) of the CRR.
- 12/08/2022
financial instruments
The changes to this defined term are effective from 23:00 on 31/12/2020.
means those instruments specified in Part 1 of Schedule 2 to the Regulated Activities Order, read with Part 2 of that Schedule.
- 31/12/2020
financial year
means the period at the end of which the balance of the accounts of the insurer is struck, or, if no balance is struck, the calendar year.
- 01/01/2016
firm
- 01/01/2014
First Life Directive
means the Council Directive of 5 March 1979 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life assurance (No 79/267/EEC).
- 19/06/2014
First Non-Life Directive
the Council Directive of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life insurance (No 73/239/EEC).
- 19/06/2014
fixed interest securities
means securities which under their terms of issue provide for fixed amounts of interest.
- 01/01/2016
flat rate benefits business friendly society
means a friendly society whose insurance business is restricted to the provision of benefits which vary according to the resources available and in which the contributions of members are determined on a flat rate basis.
- 01/01/2016
former member
- 03/07/2015
friendly society
This term is defined externally, please refer to:
s417(1) FSMA
- 01/01/2016
FSCS
means the body corporate established under section 212 of FSMA to administer the compensation scheme.
- 03/07/2015
FSMA
means the Financial Services and Markets Act 2000.
- 01/01/2014
full scope regulatory reference firm
means:
(1) a CRR firm,
(2) a credit union,
(3) a third country CRR firm in relation to the activities of its establishment in the UK,
(4) a UK Solvency II firm,
(5) the Society,
(6) a managing agent,
(7) a third country branch undertaking (other than a Swiss general insurer) in relation to the activities of its establishment in the UK,
(8) a UK ISPV,
(9) a large non-directive insurer,
(10) a small non-directive insurer.
- 10/12/2018
function
means, within a system of governance, an internal capacity to undertake practical tasks.
- 01/01/2016
Fundamental Rules
- 01/10/2015
funds at Lloyd’s
means the assets (not being syndicate assets) provided by or on behalf of a member to meet the liabilities arising from the member’s insurance business at Lloyd's which are held in a Lloyd's trust fund and managed by the Society as trustee.
- 01/01/2016
funeral plan contract
means the investment specified in articles 59(2), 60 and 87 of the Regulated Activities Order.
- 03/08/2015
future
means the investment specified in article 84 of the Regulated Activities Order.
- 01/01/2016
future policy-related liabilities
means, in relation to a with-profits fund, the aggregate of the following amounts (to the extent each constitutes a liability) less the aggregate of such amounts (to the extent each constitutes an asset):
(1) planned deductions for the costs of guarantees, options, smoothing and provision of life cover and other benefits from the amount calculated in accordance with Surplus Funds 3.3 or, where a firm is required under Surplus Funds 3.2 to use the calculation method in Surplus Funds 3.4, in accordance with Surplus Funds 3.4;
(2) planned deductions for other costs deemed chargeable to the amount calculated in accordance with Surplus Funds 3.3 or, where a firm is required under Surplus Funds 3.2 to use the calculation method in Surplus Funds 3.4, in accordance with Surplus Funds 3.4;
(3) future costs of contractual guarantees (other than financial options);
(4) future costs of financial options, including guaranteed annuity and cash options;
(5) future costs or proceeds of smoothing;
(6) future liabilities to repay financing costs of a with-profits fund where the firm expects to have to meet such liabilities; and
(7) other future costs related to the provision of the benefits referred to in Surplus Funds 3.4(4) (regardless of whether the firm is required to effect the calculation in Surplus Funds 3.4),
but only to the extent that they are not already included in the amount calculated in accordance with Surplus Funds 3.3 or, if applicable, Surplus Funds 3.4.
- 01/01/2016
Letter: G
GDPR
means Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC.
- 07/03/2019
general insurance business
the business of effecting contracts of insurance or carrying out contracts of insurance in each case in relation to contracts of general insurance only.
- 19/06/2014
general insurance capital requirement
means the highest of the premiums amount, claims amount and brought forward amount as set out in Insurance Company – Capital Resources Requirements 7.1.
- 01/01/2016
general insurance liabilities
means liabilities arising from general insurance business.
- 01/01/2016
general insurer
means an insurer with permission to effect contracts of insurance or carry out contracts of insurance that are contracts of general insurance.
- 01/01/2016
general liability
means the class of contract of insurance, specified in paragraph 13 of Part I of Schedule 1 to the Regulated Activities Order.
- 01/01/2016
GENPRU
means the General Prudential sourcebook for Banks, Building Societies, Insurers and Investment Firms in the PRA Handbook as at 31 July 2015.
- 03/08/2015
goods in transit
means the class of contract of insurance specified in paragraph 7 of Part I of Schedule 1 to the Regulated Activities Order.
- 03/07/2015
governing body
- 07/03/2016
gross earned premiums
means (in relation to a financial year) such proportion of gross written premiums as is attributable to risk borne by the firm during that financial year.
- 01/01/2016
gross written premiums
means the amounts required by the insurance accounts rules to be shown in the profit and loss account of a firm:
(1) (for general insurance business) at general business technical amount item I.1.(a); and
(2) (for long-term insurance business) at long-term business technical account item II.1.(a).
- 01/01/2016
group
The changes to this defined term are effective from 23:00 on 31/12/2020.
(in the Solvency II Firms Sector of the PRA Rulebook) means a group of undertakings that:
(1) consists of a participating undertaking, its subsidiary undertakings and the undertakings in which it holds a participation, as well as undertakings linked to each other by a common management relationship; or
(2) consists of a mutual-type group.
- 31/12/2020
group death in service dependants’ annuity
means a contract of insurance covering a specified group of persons which provides benefits in the form of regular payments to nominated dependant(s) upon the death of a person in that group, to the extent of and in accordance with the terms of that contract of insurance.
- 30/06/2024
group provider
in relation to a firm, means
(1) a member of its group that provides critical services to it; or
(2) the firm itself if one of its business units provides the critical services to it.
- 01/01/2019
group recovery plan
means a group recovery plan drawn up by a BRRD undertaking in accordance with Recovery Plans 3.
- 01/01/2019
group SCR
means the solvency capital requirement calculated at the level of the group, in accordance with Group Supervision 4 to 15.
- 01/01/2016
G-SII
has the meaning given in point (133) of Article 4(1) of the CRR.
- 12/08/2022
guarantee fund
means the amount calculated in accordance with Friendly Society – Friendly Society Overall Resources and Guarantee Fund 5.
- 01/01/2016
guidance
means guidance given by the PRA in the form of supervisory statements or otherwise.
- 19/06/2014
Letter: H
Head of Internal Audit function
has the meaning given in Senior Management Functions 3.5.
- 01/01/2019
Head of Third Country Branch function
has the meaning given in 6.2.
- 07/03/2016
health revision risk
means the risk of loss, or of adverse change, in the value of insurance obligations, resulting from changes in the level, trend or volatility of the revision rates applied to annuities, due to changes in inflation, the legal environment or in the state of health of the person insured.
- 30/06/2024
Holloway sickness policy
means a contract of long-term insurance offered or effected by a friendly society under the Holloway system, providing permanent health benefits and, in addition, investment benefits, where the investment benefits:
(1) are derived from surpluses accrued by the friendly society and apportioned to policyholders; and
(2) are payable to policyholders at maturity, on retirement, on death, or as otherwise specified by contractual provisions or individual society rules.
- 01/01/2016
Letter: I
ICAAP rules
- 01/01/2019
ICR consolidation entity
- 29/11/2024
ICR firm
- 29/11/2024
ICVC
means a body incorporated under the Open-Ended Investment Companies Regulations 2001(SI 2001/1228).
- 03/07/2015
IDD insurance intermediary
- 01/10/2018
IDD reinsurance intermediary
has the meaning given in Article 2(1)(5) of the Insurance Distribution Directive.
- 01/10/2018
immediate group
This term is defined externally, please refer to:
Section 421ZA FSMA
- 08/12/2023
income protection policy
means a contract of insurance covering a person or specified group of persons that provides benefits in the form of regular payments to that person or those persons if they are unable, or have reduced capacity, to work because of illness or injury, to the extent of and in accordance with the terms of that contract of insurance.
- 30/06/2024
index-linked benefits
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).
- 01/01/2016
index-linked liabilities
means insurance liabilities in respect of index-linked benefits.
- 01/01/2016
individual capital resources requirement
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.
- 01/01/2016
individual conduct requirements
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.
- 10/12/2018
individual member
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.
- 03/07/2015
initial margin
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.
- 01/01/2016
Institution
has the meaning given in point (3) of Article 4(1) of the CRR.
- 12/08/2022
institution-specific countercyclical capital buffer rate
has the meaning given in Capital Buffers 3.1(1A).
- 14/12/2016
insurance accounts rules
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).
- 01/01/2016
insurance business
- 19/06/2014
insurance conglomerate
means a financial conglomerate that is identified in paragraph 3.1 of Annex 2 of the Financial Conglomerates Part as an insurance conglomerate.
- 12/08/2022
insurance death risk capital component
means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 15.2.
- 01/01/2016
Insurance Directives
means the Consolidated Life Directive and the First Non-Life Directive, Second Non-Life Directive and Third Non-Life Directive.
- 02/04/2015
insurance distribution
has the meaning given in Article 2(1)(1) of the Insurance Distribution Directive.
- 01/10/2018
Insurance Distribution Directive
means the European Parliament and Council Directive of 20 January 2016 on insurance distribution (No 2016/97/EC).
- 01/10/2018
insurance expense risk capital component
means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 17.2.
- 01/01/2016
Insurance Groups Directive
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).
- 19/06/2014
insurance health risk and life protection reinsurance capital component
means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 16.1.
- 01/01/2016
insurance holding company
means a parent undertaking, other than a UK Solvency II firm 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 UK Solvency II firms, third country insurance undertakings, third country reinsurance undertakings or ancillary insurance services undertakings: the subsidiary undertakings of a parent undertaking are mainly UK Solvency II firms, third country insurance undertakings, third country reinsurance undertakings or ancillary insurance services undertakings where more than 50% of two or more of:
(a) the parent undertaking’s consolidated assets;
(b) the parent undertaking’s consolidated revenues;
(c) the group SCR (as if calculated at the level of the parent undertaking),
are derived from subsidiaries that are UK Solvency II firms, third country insurance undertakings, third country reinsurance undertakings or ancillary insurance services undertakings; and
(2) at least one of those subsidiary undertakings is a UK Solvency II firm.
- 07/07/2023
insurance liabilities
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.
- 01/01/2016
insurance market activities
means a regulated activity relating to contracts of insurance written at Lloyd's.
- 12/10/2016
insurance market risk capital component
means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 18.1.
- 01/01/2016
insurance risk transformation
means the regulated activity specified in Article 13A of the Regulated Activities Order (Transformer vehicles: insurance risk transformation).
- 08/12/2017
insurance special purpose vehicle
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a UK ISPV.
- 31/12/2020
insurance undertaking
- 08/12/2017
insurer
means a firm with permission to effect contracts of insurance or carry out contracts of insurance.
- 08/12/2017
insurer under write-down
means an insurer other than a friendly society, in respect of which a write-down order has effect.
- 19/09/2023
intermediary
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.
- 01/01/2016
internal controls
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).
- 19/06/2014
internal model
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.
- 01/01/2016
internal model approval
- 01/01/2016
internal model significant risk profile deviation
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.
- 01/01/2016
intra-group transaction
- 31/12/2020
investment
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.
- 03/08/2015
investment firm
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.
- 02/04/2015
investment holding company
has the meaning given in point (22A) of Article 4(1) of the CRR.
- 12/08/2022
investment services and/or activities
The changes to this defined term are effective from 23:00 on 31/12/2020.
means any of the services and activities listed in Part 3 of Schedule 2 to the Regulated Activities Order, insofar as they relate to any of the instruments listed in Part I of Schedule 2 to that Order.
- 31/12/2020
IP completion day
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given in section 39(1) of the European Union (Withdrawal Agreement) Act 2020.
- 31/12/2020
IRPR regulations
means the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 (2023/1347).
- 30/06/2024
issuer
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.
- 01/01/2016
Letter: J
joint account
- 03/02/2016
jointly controlled body
means a body that friendly society has joint control of in accordance with section 13 of the Friendly Societies Act 1992.
- 01/01/2016
Letter: K
key function
The changes to this defined term are effective from 23:00 on 31/12/2020.
(1) in relation to a UK Solvency II firm, the Society, a managing agent, a UK ISPV and a large non-directive insurer means each of the following in relation to the carrying on of a regulated activity by the firm:
(a) the risk-management function;
(b) the compliance function;
(c) the internal audit function;
(d) the actuarial function;
(e) the function of effectively running the firm; and
(f) any other function which is of specific importance to the sound and prudent management of the firm;
(2) in relation to a third country branch undertaking means, in relation to the carrying on of a regulated activity by the third country branch undertaking, each of the following functions performed in relation to the operations effected by the third country branch:
(a) the risk-management function;
(b) the compliance function;
(c) the internal audit function;
(d) the actuarial function;
(e) the function of effectively running the operations effected by the third country branch;
(f) the function of being the authorised UK representative; and
(g) any other function which is of specific importance to the sound and prudent management of the third country branch;
(3) in relation to a third country insurance service provider means, in relation to the carrying on of a regulated activity by the third country insurance services provider in the UK:
(a) the risk-management function;
(b) the compliance function;
(c) the internal audit function;
(d) the actuarial function;
(e) the function of effectively running the operations effected by the third country insurance services provider; and
(f) any other function which is of specific importance to the sound and prudent management of the third country insurance services provider.
- 31/12/2020
key function holder
(1) means any person who is responsible for discharging a key function;
(2) in the Regulatory Reporting Part, means an individual who has significant influence over the direction of the activities of the branch, but who is neither a member of the management body nor the CEO.
- 29/12/2020
Letter: L
large firm
means:
(1) a firm with a Part 4A permission to:
(a) effect contracts of insurance; or
(b) carry out contracts of insurance;
(2) the Society; or
(3) a managing agent
in respect of which:
(a) the amount of the firm’s gross written premiums exceeds £1 billion in each annual report and accounts prepared by the firm for each of the previous three financial years; or
(b) the amount of the firm’s assets relating to all regulated activities carried on by the firm exceeds £10 billion in each annual report and accounts prepared by the firm for each of the previous three financial years;
and:
(i) where the firm has not produced annual report and accounts for three financial years, the amounts in (a) and (b) are the amounts reported by the firm in those annual report and accounts that have been published by the firm; and
(ii) where the firm is a third country branch undertaking, the amounts in (a) and (b) are only those amounts relating to the operations effected by the third country branch.
- 10/12/2018
large non-directive insurer
means a non-directive insurer in respect of which the value of assets relating to all regulated activities carried on by the firm as included in its two most recent reported annual accounts is more than £25,000,000.
- 01/01/2016
leverage ratio
has the meaning given in Article 429(2) of Chapter 3 of the Leverage Ratio (CRR) Part.
- 01/01/2022
liabilities to policyholders
means (in relation to a firm carrying out contracts of insurance) any liability or obligations of that firm to, or in respect of, a policyholder.
- 01/01/2016
liability of ships
means the class of contract of insurance, specified in paragraph 12 of Part I of Schedule 1 to the Regulated Activities Order.
- 03/07/2015
life revision risk
means the risk of loss, or of adverse change, in the value of insurance obligations, resulting from changes in the level, trend or volatility of the revision rates applied to annuities, due to changes in the legal environment or in the state of health of the person insured.
- 30/06/2024
line of business
- 30/06/2024
linked benefit
means a benefit payable under a linked long-term contract of insurance or a regulated collective investment scheme the amount of which is determined by reference to:
(1) the value of the property of any description (whether specified or not);
(2) fluctuations in the value of any such property;
(3) income from such property; or
(4) fluctuations in an index of the value of such property.
- 01/01/2016
linked long-term
means (in relation to a contract of insurance) a contract of long-term insurance where the benefits are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified).
- 01/01/2016
linked long-term liabilities
means the insurance obligations in respect of linked benefits under a linked long-term contract of insurance.
- 01/01/2016
listed
The changes to this defined term are effective from 23:00 on 31/12/2020.
means:
(1) included in the official list; or
(2) in respect of which facilities for dealing on a regulated market have been granted.
- 31/12/2020
Lloyd's trust deed
means a trust deed in the form prescribed by the Society and notified to the PRA, for execution by a member in respect of his insurance business.
- 01/01/2016
Lloyd's trust fund
means a fund held on the terms of a Lloyd's trust deed.
- 01/01/2016
longevity risk
means the risk of loss, or of adverse change, in the value of insurance obligations, resulting from changes in the level, trend or volatility of mortality rates, where a decrease in the mortality rate leads to an increase in the value of insurance obligations.
- 30/06/2024
long-term care insurance contract
a long-term insurance contract:
(a) which provides, would provide at the policyholder's option, or is sold or held out as providing, benefits that are payable or provided if the policyholder's health deteriorates to the extent that he cannot live independently without assistance and that is not expected to change; and
(b) under which the benefits are capable of being paid for periodically for all or part of the period that the policyholder cannot live without assistance;
where 'benefits' are services, accommodation or goods necessary or desirable for the continuing care of the policyholder because he cannot live independently without assistance.
- 03/08/2015
long-term insurance assets
has the meaning set out in Insurance Company – Internal Contagion Risk 4.2.
- 01/01/2016
long-term insurance business
the business of effecting contracts of insurance or carrying out contracts of insurance in each case in relation to contracts of long-term insurance only.
- 19/06/2014
long-term insurance business asset
in relation to a friendly society, means the assets of a firm which are, for the time being, identified as representing the long-term insurance business fund or funds maintained by that firm in respect of its long-term insurance business.
- 01/01/2016
long-term insurance capital requirement
means the amount determined in accordance with Insurance Company – Capital Resources Requirement 14.1, being the sum of the insurance death risk capital component, the insurance health risk and life protection reinsurance capital component, the insurance expense risk capital component, the insurance market risk capital component and the resilience capital requirement.
- 01/01/2016
long-term insurance contract
means a “contract of long-term insurance” as defined in Article 3(1) of the Regulated Activities Order.
- 03/08/2015
long-term insurance fund
has the meaning set out in Insurance Company – Internal Contagion Risk 4.3.
- 01/01/2016
long-term insurance liabilities
means liabilities arising from long-term insurance business.
- 01/01/2016
long-term insurance or reinsurance obligations
means insurance or reinsurance obligations falling within lines of business 29 to 36.
- 30/06/2024
long-term insurer
means an insurer with permission to effect contracts of insurance or carry out contracts of insurance that are contracts of long-term insurance.
- 01/01/2016
LREQ basis
means, in respect of an LREQ firm, the basis or bases of application on which the Leverage Ratio – Capital Requirements and Buffers Part applies to that LREQ firm.
- 01/01/2022
LREQ firm
means a firm or CRR consolidation entity to which the Leverage Ratio – Capital Requirements and Buffers Part applies in accordance with rule 1.1 of that Part.
- 01/01/2022
Letter: M
major business unit
- 01/01/2016
making arrangements with a view to transactions in investments
means the regulated activity, specified in article 25(2) of the Regulated Activities Order (Arranging deals in investments).
- 03/08/2015
management body
- 01/02/2014
management expenses
means all expenses, other than commission, incurred in the administration of a firm or its business.
- 01/01/2016
management responsibilities map
has the meaning given in Allocation of Responsibilities 6.
- 07/03/2016
managing a UCITS
means the regulated activity, specified in article 51ZA of the Regulated Activities Order (Managing a UCITS).
- 03/08/2015
managing agent
has the meaning given in article 3(1) of the Regulated Activities Order.
- 19/06/2014
managing an AIF
means the regulated activity, specified in article 51ZC of the Regulated Activities Order (Managing an AIF).
- 03/08/2015
managing investments
means the regulated activity, specified in article 37 of the Regulated Activities Order (Managing investments).
- 03/08/2015
mandatory disclosure
means an obligation in any applicable laws, regulations or rules to declare or disclose information to the public.
- 07/03/2017
margin of solvency
means the excess of the value of the friendly society’s assets over the amount of its liabilities, that value and amount being determined in accordance with Friendly Society – Asset Valuation, Friendly Society – Liability Valuation and Friendly Society – Overall Resources and Guarantee Fund 8.
- 01/01/2016
market risk
(1) (except in the Solvency II Firms and Non-Solvency II Firms Sectors of the PRA Rulebook) means the risk that arises from fluctuations in values of, or income from assets, or in interest or exchange rates.
(2) (in the Solvency II Firms and Non-Solvency II Firms Sectors of the PRA Rulebook) means the risk of loss or of adverse change in the financial situation resulting, directly or indirectly, from fluctuations in the level and in the volatility of market prices of assets, liabilities and financial instruments.
- 01/01/2016
market value
means the market value as determined in accordance with generally accepted accounting practice.
- 01/01/2016
matching adjustment
means the adjustment to the relevant risk-free interest rate term structure to calculate the best estimate of a relevant portfolio of insurance or reinsurance obligations in accordance with:
- (1) the Matching Adjustment Part; and
- (2) [deleted]
- (3) [deleted]
- (4) relevant technical information published by the PRA in accordance with regulation 3(1) of the IRPR regulations.
- 30/06/2024
matching adjustment eligibility conditions
means:
- (1) the conditions contained in regulation 4(3) to (9) and (11) of the IRPR regulations; and
- (2) the conditions contained in 2.2 to 2.4 (inclusive) of the Matching Adjustment Part.
- 30/06/2024
matching adjustment permission
means the permission granted to a firm by the PRA pursuant to section 138BA of FSMA to apply a matching adjustment for the purposes of calculating the best estimate in relation to a relevant portfolio of insurance or reinsurance obligations.
- 30/06/2024
matching adjustment permission application
means an application by a firm for a matching adjustment permission.
- 30/06/2024
matching adjustment portfolio
means a relevant portfolio of insurance or reinsurance obligations and the corresponding relevant portfolio of assets.
- 30/06/2024
material outsourcing
- 01/10/2015
material risk taker
- 10/12/2018
mathematical reserves
the provision made by an insurer to cover liabilities (excluding liabilities which have fallen due and liabilities arising from deposit back arrangements) arising under or in connection with contracts of long-term insurance.
- 01/01/2016
MCR
- 01/01/2016
member
- 19/06/2014
MiFID business
means investment services and activities and, where relevant, ancillary services carried on by a MiFID investment firm.
- 02/04/2015
MiFID II
means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast).
- 19/01/2015
MiFID investment firm
The changes to this defined term are effective from 23:00 on 31/12/2020.
has the meaning given in paragraph 2.1A of MiFIR.
- 31/12/2020
MiFIR
means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.
- 19/01/2015
minimum guarantee fund
means an amount calculated in accordance with Friendly Society - Overall Resources and Guarantee Fund 6 for long-term insurance business and Friendly Society - Overall Resources and Guarantee Fund 7 for general insurance business, whether the required margin of solvency is greater or less than that amount.
- 01/01/2016
mixed financial holding company
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a parent undertaking other than a regulated entity, which together with its subsidiaries, at least one of which is a regulated entity which has its head office in the UK, and other entities constitutes a financial conglomerate.
- 31/12/2020
mixed-activity holding company
has the meaning given in point (22) of Article 4(1) of the CRR.
- 12/08/2022
MODR
means the Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing MiFID II of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.
- 03/01/2018
money
means any form of money, including cheques and other payable orders.
- 01/01/2016
money-market instruments
means those classes of financial instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and commercial papers and excluding instruments of payment.
- 01/01/2016
month
This term is defined externally, please refer to:
Schedule 1, Interpretation Act 1978
- 01/01/2016
mortality risk
means the risk of loss, or of adverse change, in the value of insurance obligations, resulting from changes in the level, trend or volatility of mortality rates, where an increase in the mortality rate leads to an increase in the value of insurance obligations.
- 30/06/2024
motor vehicle liability
means the class of contract of insurance, specified in paragraph 10 of Part I of Schedule 1 to the Regulated Activities Order.
- 01/01/2016
MTF
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments – in the system and in accordance with non-discretionary rules – in a way that results in a contract in accordance with provisions implementing Title II of MiFID II.
- 31/12/2020
mutual
means an insurer which:
(1) if it is a body corporate has no share capital (except a wholly owned subsidiary with no share capital but limited by guarantee); or
(2) is a friendly society; or
(3) is a society registered or deemed to be registered under Co-operative and Community Benefit Societies Act 2014 or the Industrial and Provident Societies (Northern Ireland) Act 1969.
- 01/10/2015
mutual-type group
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a group of undertakings that is based on the establishment, contractually or otherwise, of strong and sustainable financial relationships among those undertakings, and that may include mutual or mutual-type associations, provided that:
(1) one of those undertakings effectively exercises, through centralised coordination, a dominant influence over the decisions, including financial decisions, of the other undertakings that are part of the group of undertakings; and
(2) the establishment and dissolution of such relationships are subject to prior approval by the PRA,
where the undertaking exercising the centralised coordination shall be considered as the parent undertaking, and the other undertakings shall be considered as subsidiary undertakings.
- 31/12/2020
Letter: N
national specific template
- 01/01/2016
net premium
means the premium that is calculated to provide the basic sum assured under a with-profits policy taking into consideration only the mortality and interest rate risks and using the same assumptions as used in the calculation of the mathematical reserves.
- 01/01/2016
non-core large exposures group or NCLEG
has the meaning given in the Large Exposures Part.
- 03/08/2015
non-directive firm
The changes to this defined term are effective from 23:00 on 31/12/2020.
means (in accordance with the Financial Services and Markets Act 2000 (Controllers)(Exemption) Order 2009 (SI 2009/774)) a UK domestic firm other than:
(1) a credit institution authorised under provisions which implemented the Banking Consolidation Directive;
(2) an investment firm authorised under provisions which implemented MiFID II;
(3) a management company as defined in article 2(1)(b) of the UCITS Directive, authorised under provisions which implemented that directive;
(4) a UK Solvency II firm, the Society and managing agents.
- 31/12/2020
non-directive friendly society
means a friendly society that is not a UK Solvency II firm.
- 01/01/2016
non-directive insurer
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a firm with a Part 4A permission to effect contracts of insurance or carry out contracts of insurance, other than:
(1) a UK Solvency II firm;
(2) a third country branch undertaking; or
(3) where the firm has the permission by reason only of the operation of the EEA Passport Rights (Amendment etc., and Transitional Provisions) (EU Exit) Regulations 2018.
- 31/12/2020
non-executive director
- 07/03/2016
non-listed institution
means an institution that has not issued securities that are admitted to trading on a regulated market.
- 01/01/2024
non-profit insurance business
means the business of effecting contracts of insurance or carrying out contracts of insurance that are non-profit policies.
- 01/01/2016
non-profit policy
means a contract of long-term insurance which is not a with-profits policy.
- 01/01/2016
non-Solvency I firm
means a firm that immediately before the Solvency II implementation date fell outside the scope of each of the Solvency I Directives.
- 01/01/2016
non-UCITS retail scheme
The changes to this defined term are effective from 23:00 on 31/12/2020.
means an ICVC, authorised unit trust scheme, or an authorised contractual scheme which is not a collective investment scheme falling within provisions implementing the UCITS Directive or a qualified investor scheme.
- 31/12/2020
non-UK credit institution
means a credit institution whose registered office or, if it does not have a registered office, whose head office, is outside the UK.
- 08/12/2023
non-UK G-SII
has the meaning given in point (134) of Article 4(1) of the CRR.
- 12/08/2022
notified non-executive director
means a non-executive director of a firm who is not an approved person in relation to that firm.
- 07/03/2016
notified non-executive director
means a non-executive director of a CRR firm who is not an approved person in relation to that firm.
- 07/03/2016
notional life MCR
- 01/01/2016
notional life SCR
- 01/01/2016
notional non-life MCR
- 01/01/2016
notional non-life SCR
- 01/01/2016
NSFR provisions
means:
- (a) Article 413(2);
- (b) Article 415, as it relates to Articles 428a-428ah;
- (c) Articles 416-428ah;
- (d) Article 17 of the Reporting (CRR) Part; and
- (e) Article 447(g) of the Disclosure (CRR) Part.
- 01/07/2024
Letter: O
occupational pension scheme
has the meaning set out in article 3(1) of the Regulated Activities Order.
- 01/01/2016
officer
means, in relation to a body corporate:
(1) a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity; and
(2) an individual who is a controller of the body.
- 19/06/2014
official list
- 31/12/2020
offsetting transaction
means, in accordance with Insurance Company – Risk Management 7.8 and 7.9:
(1) an approved derivative, approved stock lending transaction or an approved quasi-derivative; or
(2) a covered transaction with an approved counterparty for the purchase of assets.
- 01/01/2016
omnibus account
means an account at a central bank in which comingled funds can be held by, or on behalf of, more than one entity.
- 05/08/2024
ONA system
means the PRA’s online notification and applications system, by whatever name known.
- 19/06/2014
operating a dormant account fund
means any of the regulated activities specified in:
(1) article 63N(1)(a) of the Regulated Activities Order (meeting of repayment claims); or
(2) article 63N(1)(b) of the Regulated Activities Order (managing dormant account funds (including the investment of such funds)).
- 03/08/2015
operating a multilateral trading facility
means the regulated activity in article 25D of the Regulated Activities Order.
- 03/08/2015
operational risk
(in the Solvency II Firms Sector of the PRA Rulebook) means the risk of loss arising from inadequate or failed internal processes, personnel or systems, or from external events, including legal risks which, for the purposes of Solvency Capital Requirement – General Provisions 3.3(1), includes legal risks but excludes risks arising from strategic decisions and reputational risks.
(in the Non-Solvency II Firms Sector of the PRA Rulebook) means the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, including legal risk.
- 01/01/2016
Operator
in relation to a payment system has the same meaning as in Part 5 of the Banking Act 2009 (see section 183 of that Act).
- 08/12/2023
option
means the investment specified in article 83 of the Regulated Activities Order.
- 01/01/2016
ORSA
means the own risk and solvency assessment carried out from time to time, as detailed in Conditions Governing Business 3.8 to 3.11.
- 01/01/2016
O-SII
- 01/01/2022
OTC derivative
means a derivative traded solely over the counter.
- 01/01/2016
OTF
This defined term is effective from 23:00 on 31/12/2020.
means a multilateral system which is not a regulated market or an MTF and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract in accordance with provisions implementing Title II of MiFID II.
- 31/12/2020
outsourcing
- 01/10/2015
overseas firm
- 01/02/2014
overseas regulator
This defined term is effective from 23:00 on 31/12/2020.
means a regulator outside the United Kingdom.
- 31/12/2020
own funds
- 31/12/2020
Letter: P
parent undertaking
This term is defined externally, please refer to:
s420 FSMA
- 01/01/2014
parent undertaking
The changes to this defined term are effective from 23:00 on 31/12/2020.
(in the Solvency II Firms Sector of the PRA Rulebook) means, in accordance with section 420 of FSMA (Parent and subsidiary undertaking) and section 1162 of the Companies Act 2006 (Parent and subsidiary undertakings), an undertaking which has the following relationship to another undertaking ("S"):
(1) it holds a majority of the voting rights in S; or
(2) it is a member of S and has the right to appoint or remove a majority of its board of directors; or
(3) it has the right to exercise a dominant influence over S through:
(a) provisions contained in S's memorandum or articles; or
(b) a control contract; or
(4) it is a member of S and controls alone, under an agreement with other shareholders or members, a majority of the voting rights in S; or
(5) (a) it has the power to exercise, or actually exercises, dominant influence or control over S; or
(b) it and S are managed on a unified basis; or
(6) it is a parent undertaking of a parent undertaking of S; or
(7) where, in the opinion of the PRA, it effectively exercises a dominant influence over S;
and:
(8) in relation to (2) and (4), the undertaking will be treated as a member of S if any of its subsidiary undertakings is a member of S, or if any shares in S are held by a person acting on behalf of the undertaking or any of its subsidiary undertakings;
(9) the provisions of Schedule 7 to the Companies Act 2006 (Parent and subsidiary undertakings: supplementary provisions) explain the expressions used in and supplement paragraphs (1) to (6).
- 31/12/2020
Part 4A permission
- 01/02/2014
partial internal model
- 01/01/2016
participating UK Solvency II firm
This defined term is effective from 23:00 on 31/12/2020.
means a UK Solvency II firm that holds a participation in another undertaking.
- 31/12/2020
participating undertaking
The changes to this defined term are effective from 23:00 on 31/12/2020.
means an undertaking that holds a participation in another undertaking or an undertaking linked with another undertaking by a common management relationship.
- 31/12/2020
participation
- 31/12/2020
partner
means (in relation to a firm which is a partnership) any person appointed to direct its affairs, including:
(1) a person occupying the position of a partner (by whatever name called); and
(2) a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the partners are accustomed to act.
- 02/04/2015
partnership
This term is defined externally, please refer to:
s417(1) FSMA
- 01/01/2016
partnership scheme
This term is defined externally, please refer to:
s235A(5) FSMA
- 01/01/2016
Payment Services Regulations
means the Payment Services Regulations 2017 (SI 2017/752).
- 12/03/2023
payment system
has the meaning given in section 182 of the Banking Act 2009.
- 08/12/2023
pension contract
means a contract under which rights to benefits are obtained by the making of contributions to an occupational pension scheme or to a personal pension scheme, where the contributions are paid to a regulated collective investment scheme.
- 01/01/2016
pension opt-out
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
pension policy
means a contract under which a right to benefits results from contributions made to an occupational pension scheme or to a personal pension scheme, where the contributions are paid to an insurer.
- 01/01/2016
pension scheme
means a scheme under which a right to benefits results from contributions made under a pension contract or pension policy.
- 01/01/2016
pension transfer
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
permanent health
means the class of contract of insurance, specified in paragraph 4 of Part 2 of Schedule 1 to the Regulated Activities Order.
- 01/01/2016
permanent share capital
has the meaning set out in Insurance Company – Capital Resources 5.1.
- 01/01/2016
permission
means permission to carry on regulated activities.
- 19/06/2014
person
This term is defined externally, please refer to:
Interpretation Act 1978 Schedule 1
- 29/04/2014
personal pension scheme
has the meaning provided in Article 3(1) of the Regulated Activities Order.
- 03/08/2015
policy
has the meaning given in article 2 of the Financial Services and Markets Act 2000 (Meaning of "Policy" and "Policyholder") Order 2001 (SI 2001/2361).
- 01/10/2015
policyholder
- 31/12/2020
policyholder protection scheme
means the compensation scheme for claims under contracts of insurance.
- 03/07/2015
PPFM
means the Principles and Practices of Financial Management which a firm carrying on with-profits insurance business must establish, maintain and record under COBS 20.3 of the FCA Handbook.
- 01/01/2016
PRA
means the Prudential Regulation Authority.
- 01/01/2014
PRA approved intermediate holding company
means a financial holding company or mixed financial holding company within the meaning of points (20) and (21) respectively of Article 4(1) of the CRR that this not a UK parent financial holding company or a UK parent mixed financial holding company and that is approved under Part 12B of FSMA.
- 12/08/2022
PRA approved parent holding company
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a UK parent financial holding company or UK parent mixed financial holding company that is approved under Part 12B of FSMA.
- 31/12/2020
PRA approved person
means a person approved by the PRA under section 59 of FSMA (Approval for particular arrangements) to perform a PRA senior management function.
- 07/03/2016
PRA designated institution
means a CRR firm that is designated under Part 12B of FSMA or regulation 5(5) of the Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020.
- 29/12/2020
PRA designated intermediate holding company
means a financial holding company or mixed financial holding company within the meaning of points (20) and (21) respectively of Article 4(1) of the CRR that this not a UK parent financial holding company or a UK parent mixed financial holding company and that is designated under Part 12B of FSMA.
- 12/08/2022
PRA designated parent holding company
The changes to this defined term are effective from 23:00 on 31/12/2020.
means an UK parent financial holding company or UK parent mixed financial holding company that is designated under Part 12B of FSMA.
- 31/12/2020
PRA Handbook
means the PRA’s Handbook of rules and guidance.
- 19/06/2014
PRA senior management approval application
means an application to perform a PRA senior management function under section 59 of FSMA.
- 10/12/2018
PRA senior management function
The changes to this defined term are effective from 23:00 on 31/12/2020.
means:
(1) in respect of a CRR firm, a credit union and a third country CRR firm a function specified as a controlled function in Senior Management Functions 2 in relation to the carrying on of regulated activity by a firm.
(2) (in respect of a UK Solvency II firm, the Society, a managing agent, a third country branch undertaking (other than a Swiss general insurer) and a UK ISPV) that aspect of any key function relating to the carrying on of a regulated activity by the firm, which is specified by the PRA in Insurance – Senior Management Functions 3 to 10 pursuant to section 59 of FSMA.
(3) (in respect of a small non-directive insurer) any function which is specified by the PRA in Non-Solvency II Firms – Senior Management Functions 3 to 5 pursuant to section 59 of FSMA.
(4) (in respect of a large non-directive insurer and a Swiss general insurer) any function which is specified by the PRA in Large Non-Solvency II Firms – Senior Management Functions 3 to 9 pursuant to section 59 of FSMA.
(5) (in respect of a third country insurance service provider in relation to the carrying on by the firm of a regulated activity in the UK) any function specified in Insurance – Senior Management Functions 3 to 10.
- 31/12/2020
PRA senior management function holder
means a person who has been approved to perform a PRA senior management function in respect of the firm.
- 10/12/2018
PRA-authorised person
This term is defined externally, please refer to:
FSMA s2B(5)
- 15/02/2016
preference share
means a share conferring preference as to income or return of capital which does not form part of the equity share capital of an undertaking.
- 01/01/2016
premium
means the consideration payable under a contract of insurance by the policyholder to the insurer.
- 03/07/2015
premiums amount
means an amount, as defined in Insurance Company – Capital Resources Requirements 8.1, used in the calculation of the general insurance capital requirement.
- 01/01/2016
pre-Solvency II MCR
means the minimum capital requirement that applied to the UK Solvency II firm under PRA rules as at 31 December 2015.
- 01/01/2016
Principles for Financial Market Infrastructures
means the Principles for Financial Market Infrastructures issued by the Committee on Payment and Market Infrastructures and the International Organisation of Securities Commissions in April 2012.
- 05/08/2024
probability distribution forecast
means a mathematical function that assigns a probability of realisation to an exhaustive set of mutually exclusive future events.
- 01/01/2016
professional client
has the meaning given in the FCA Handbook as amended from time to time.
- 03/01/2018
proper valuation
means, in relation to land, a valuation made by a qualified valuer not more than three years before the relevant date which determined the amount which would be realised at the time of the valuation on an open market sale of the land free from any mortgage or charge.
- 01/01/2016
property-linked benefits
means benefits other than an index-linked benefit:
(1) provided for under a linked long-term contract of insurance; and
(2) determined by reference to the value of, or income from, property of any description (whether specified in the contract or not).
- 01/01/2016
property-linked liabilities
means insurance liabilities in respect of property-linked benefits.
- 01/01/2016
proportional share
means, in relation to an affiliated company, the percentage which is the percentage holding (directly or indirectly) in the affiliated company’s capital.
- 01/01/2016
protected claim
means a claim which is covered by the policyholder protection scheme as defined in Policyholder Protection 9.1.
- 03/07/2015
protected disclosure
a qualifying disclosure as defined in section 43B of the Employment Rights Act 1996 made by a worker in accordance with sections 43C to 43H of the Employment Rights Act 1996.
- 07/09/2016
prudential context
means, in relation to activities carried on by a firm, the context in which the activities have, or might reasonably be regarded as likely to have, a negative effect on:
(1) the safety and soundness of firms; or
(2) the ability of the firm to meet either:
(a) the "fit and proper" test in threshold conditions 4E and 5E (Suitability); or
(b) the applicable requirements and standards under the regulatory system relating to the firm’s financial resources.
- 02/04/2015
pure protection contract
means:
(1) a long-term insurance contract in respect of which the following conditions are met:
(a) the benefits under the contract are payable only on death or in respect of incapacity due to injury, sickness or infirmity;
(b) the contract has no surrender value, or the consideration consists of a single premium and the surrender value does not exceed that premium; and
(c) the contract makes no provision for its conversion or extension in a manner which would result in it ceasing to comply with (a) or (b); or
(2) a reinsurance contract covering all or part of a risk to which a person is exposed under a long-term insurance contract.
- 03/08/2015
pure reinsurer
means an insurer whose insurance business is restricted to reinsurance.
- 01/01/2016
Letter: Q
qualified investor scheme
means an ICVC, authorised unit trust scheme or an authorised contractual scheme whose instrument constituting the scheme contains the statement in COLL 8.2.6 R 1(2) of the FCA Handbook that it is a qualified investor scheme.
- 01/01/2016
qualifying parent undertaking
has the meaning given in section 192B of FSMA.
- 19/01/2015
quasi-derivative
a contract or asset having the effect of a derivative contract.
- 01/01/2016
Letter: R
railway rolling stock
- 04/11/2024
rating notch
means, in respect of each credit quality step, the additional sub-categories (if relevant) which differentiate the relative credit quality of assets within that credit quality step.
- 30/06/2024
real estate
means an interest in land, buildings or other immoveable property.
- 01/01/2016
recognised scheme
- 31/12/2020
recovery plan
means:
(1) (except in the Group Supervision Part of the PRA Rulebook), the Recovery Plans Part of the PRA Rulebook and the Operational Continuity Part of the PRA Rulebook), the recovery plan required to be provided by a firm to the PRA under Undertakings in Difficulty 3.1(2);
(2) (in the Group Supervision Part of the PRA Rulebook), the recovery plan required to be provided by a relevant insurance group undertaking to the PRA under Group Supervision 4.4(2); and
(3) (in the Recovery Plans Part of the PRA Rulebook and the Operational Continuity Part of the PRA Rulebook) a recovery plan drawn up by a firm in accordance with Recovery Plans 2.
- 01/01/2019
recovery time risk
means the risk of loss, or of adverse change in the value of insurance obligations, resulting from changes in the expected time until the cessation of payments to those currently unable to work due to illness, injury or disability.
- 30/06/2024
Regulated Activities Order
means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544).
- 01/02/2014
regulated activity
This term is defined externally, please refer to:
FSMA s22
- 07/03/2016
regulated affiliated company
means an affiliated company which has a Part 4A permission.
- 01/01/2016
regulated benchmark administrator
a person who has a Part 4A permission to carry on the regulated activity of administering a benchmark.
- 29/06/2018
regulated collective investment scheme
means:
(1) an ICVC;
(2) an authorised unit trust scheme;
(3) an authorised contractual scheme; or
(4) a recognised scheme.
- 03/07/2015
regulated institution
The changes to this defined term are effective from 23:00 on 31/12/2020.
means any of the following:
(1) a UK Solvency II firm, the Society, a managing agent or a third country branch undertaking; or
(2) a CRD credit institution; or
(3) a non-directive insurer; or
(4) a firm whose permission includes dealing in investments as principal with respect to derivatives which are not listed; or
(5) a MiFID investment firm whose authorisation (as referred to in article 5 of MiFID) authorises it to carry on activities of the kind referred to in (4).
- 31/12/2020
regulated market
The changes to this defined term are effective from 23:00 on 31/12/2020.
means:
(1) a regulated market as defined in Article 2(1) of MiFIR; or
(2) a market situated outside the UK which is characterised by the fact that:
(a) it meets comparable requirements to those set out in (1); and
(b) the financial instruments dealt in are of a quality comparable to those in a regulated market in the UK.
- 31/12/2020
regulatory system
The changes to this defined term are effective from 23:00 on 31/12/2020.
means the arrangements for regulating a firm or other person in or under FSMA, the Bank of England Act 1998, the Banking Act 2009, the Friendly Societies Act 1974, the Friendly Societies Act 1992, the Credit Unions Act 1979, including the threshold conditions, the Fundamental Rules and other rules, the Statements of Principle, codes and guidance given by the PRA, the Bank of England or the FCA and including any relevant provisions of an EU Regulation including those specified under section 204A(2) of FSMA.
- 31/12/2020
reinsurance
includes retrocession.
- 19/06/2014
reinsurance contract
means a contract of insurance covering all or part of a risk to which a person is exposed under a contract of insurance.
- 03/08/2015
Reinsurance Directive
means the Directive of 16 November 2005 of the European Parliament and of the Council (No 2005/68/EC) on reinsurance and amending the First Non-Life Directive and the Third Non-Life Directive as well as the Insurance Groups Directive and the Consolidated Life Directive.
- 19/06/2014
reinsurance distribution
has the meaning given in Article 2(1)(2) of the Insurance Distribution Directive.
- 01/10/2018
reinsurance to close
means:
(1) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with the members of that syndicate in a later syndicate year or the members of another syndicate ("the reinsuring members") that the reinsuring members will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year; or
(2) a similar reinsurance agreement or arrangement that has been approved by the Council as a reinsurance to close.
- 01/01/2016
reinsurance undertaking
means an insurance undertaking whose insurance business is restricted to reinsurance.
- 19/06/2014
reinsurer
means an insurance undertaking whose business includes effecting contracts of insurance or carrying out contracts of insurance that are reinsurance contracts; includes a retrocessionaire.
- 01/01/2016
relevant business
- 01/12/2004
relevant capital sum
means the sum under a contract of insurance which is:
(1) unless (2) applies;
(a) for whole life assurances, the sum assured;
(b) for contracts of insurance where a sum is payable on maturity (including contracts where a sum is also payable on earlier death), the sum payable on maturity;
(c) for deferred annuities, the capitalised value of the annuity at the vesting date (or the cash option if it is greater);
(d) for capital redemption contracts, the sum payable at the end of the contract period; and
(e) for linked long-term contracts of insurance, notwithstanding (a) to (d), the lesser of:
(i) the amount for the time being payable on death; and
(ii) the aggregate of the value for the time being of the units allocated to the contract (or, where entitlement is not denoted by means of units, the value for the time being of any other measure of entitlement under the contract equivalent to units) and the total amount of the premiums remaining to be paid during such of the term of the contract as is appropriate for zillmerising or, if such premiums are payable beyond the age of seventy-five, until that age;
but excluding in all cases any vested reversionary bonus; and
(2) for temporary assurances, the sum assured on the actuarial valuation date.
- 01/01/2016
relevant date
means, in relation to the valuation of any asset for any purpose for which the rules in Friendly Society – Asset Valuation apply, the date when the asset falls to be valued for that purpose.
- 01/01/2016
relevant insurance group undertaking
The changes to this defined term are effective from 23:00 on 31/12/2020.
means, in relation to a group falling within Group Supervision 2.1(1) or 2.1(2), each UK Solvency II firm within that group.
- 31/12/2020
relevant legislation
- 31/12/2020
relevant person
means any of the following:
(1) a director, partner or equivalent, manager or appointed representative (or where applicable, tied agent) of the firm;
(2) a director, partner or equivalent, or manager of any appointed representative (or where applicable, tied agent) of the firm;
(3) an employee of the firm or of an appointed representative (or where applicable, tied agent) of the firm; as well as any other natural person whose services are placed at the disposal and under the control of the firm or an appointed representative or a tied agent of the firm and who is involved in the provision by the firm of regulated activities; or
(4) a natural person who is directly involved in the provision of services to the firm or its appointed representative (or where applicable, tied agent) under an outsourcing arrangement, for the purpose of the provision by the firm of regulated activities.
- 02/04/2015
relevant portfolio of assets
means, in respect of a relevant portfolio of insurance or reinsurance obligations, the portfolio of assets, referred to in regulation 4(3) of the IRPR regulations, which is assigned to cover the best estimate of those insurance or reinsurance obligations.
- 30/06/2024
relevant portfolio of insurance or reinsurance obligations
means a portfolio of long-term insurance or reinsurance obligations, in respect of which:
- (1) a firm has been granted a matching adjustment permission; and
- (2) for the purposes of the Matching Adjustment Part only, a firm is applying for a matching adjustment permission.
- 30/06/2024
relevant risk-free interest rate term structure
- 30/06/2024
relevant senior management function
means, for the purposes of section 64A of FSMA and to the extent applicable, pursuant to the FCA Handbook, to a UK Solvency II firm, the Society, a managing agent, a third country branch undertaking (other than a Swiss general insurer), an ISPV, a large non-directive insurer or a small non directive insurer:
- an FCA governing function; and
- [Deleted.];
- [Deleted.];
- [Deleted.];
- [Deleted.];
- [Deleted.];
- Compliance oversight function (FCA controlled function SMF 16).
- 10/12/2018
remuneration
means any form of remuneration, including salary, discretionary pension benefits and benefits of any kind.
- 01/07/2015
repo
means:
(1) an agreement between a seller and buyer for the sale of securities, under which the seller agrees to repurchase the securities, or equivalent securities, at an agreed date and, usually, at a stated price; or
(2) an agreement between a buyer and a seller for the purchase of securities, under which they buyer agrees to resell the securities, or equivalent securities, at an agreed date and, usually, at a stated price.
- 01/01/2016
reportable concern
means a concern held by any person in relation to the activities of a firm, including:
(a) anything that would be the subject-matter of a protected disclosure, including a breach of any rule;
(b) a failure to comply with the firm's policy and procedures; and
(c) behaviour that has or is likely to have an adverse effect on the firm's reputation or financial well-being.
- 07/09/2016
required margin of solvency
means the amount calculated in accordance with Friendly Society – Overall Resources and Guarantee Fund 3.
- 01/01/2016
requirement
means a requirement included in a firm's Part 4A permission under section 55L FSMA (Imposition of requirements by the FCA), section 55M FSMA (Imposition of Requirements by the PRA) or section 55O FSMA (Imposition of requirements on acquisition of control).
- 01/01/2016
resilience capital requirement
means one of the components of the long-term insurance capital requirement as set out in Insurance Company – Capital Resources Requirements 20.
- 01/01/2016
retail client
means a client who is neither a professional client or an eligible counterparty.
- 03/08/2015
retained direct EU legislation
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given in section 20(1) of the European Union (Withdrawal) Act 2018.
- 31/12/2020
retained EU law
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given in section 6(7) of the European Union (Withdrawal) Act 2018.
- 31/12/2020
revision risk
means life revision risk and/or health revision risk, as the context requires.
- 30/06/2024
RFB sub-consolidated basis
means on the sub-consolidated basis of the sub-consolidation group.
- 01/01/2019
ring-fenced body
This term is defined externally, please refer to:
Section 417(1) FSMA
- 01/01/2019
ring-fenced holding company
means a body corporate falling within section 192JA(2) of FSMA that is the ultimate parent undertaking within a sub-consolidation group.
- 07/03/2019
risk concentration
The changes to this defined term are effective from 23:00 on 31/12/2020.
means all risk exposures with a loss potential which is large enough to threaten the solvency or the financial position in general of the regulated entities in a financial conglomerate, whether such exposures are caused by counterparty risk/credit risk, investment risk, insurance risk, market risk, other risks, or a combination or interaction of such risks.
- 31/12/2020
risk control rules
means the rules in Internal Capital Adequacy Assessment 4 to 11.
- 01/01/2019
risk margin
- 01/01/2016
risk measure
means a mathematical function which assigns a monetary amount to a given probability distribution forecast and increases monotonically with the level of risk exposure underlying that probability distribution forecast.
- 01/01/2016
risk-free interest rate transitional measure
means a transitional adjustment to the relevant risk-free interest rate term structure, referred to in Transitional Measures 10.1.
- 01/01/2016
risk-mitigation techniques
The changes to this defined term are effective from 23:00 on 31/12/2020.
means all techniques which enable a UK Solvency II firm to transfer part or all of its risks to another party.
- 31/12/2020
rolling spot forex contract
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
Letter: S
safeguarding and administering investments
means the regulated activity, specified in article 40 of the Regulated Activities Order (Safeguarding and administering investments).
- 03/08/2015
safeguarding and administration of assets (without arranging)
that part of safeguarding and administering investments which consists of both:
(a) the safeguarding of assets belonging to another; and
(b) the administration of those assets.
- 03/08/2015
SCR
means the solvency capital requirement calculated in accordance with the SCR Rules.
- 01/01/2016
SCR Rules
means the PRA rules contained in the Solvency Capital Requirement – General Provisions Part of the PRA Rulebook, the Solvency Capital Requirement – Standard Formula Part of the PRA Rulebook and the Solvency Capital Requirement – Internal Models Part of the PRA Rulebook.
- 01/01/2016
SDDT
has the meaning given in SDDT Regime – General Application 3.1.
- 01/01/2024
SDDT consolidation entity
has the meaning given in SDDT Regime – General Application 3.2.
- 01/01/2024
Second Life Directive
means the Council Directive of 8 November 1990 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC (No 90/619/EEC).
- 19/06/2014
Second Non-Life Directive
means the Council Directive of 22 June 1988 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No 88/357/EEC).
- 02/04/2015
section 59ZZA
This defined term is effective from 23:00 on 31/12/2020.
means:
(1) in relation to a SRO firm, section 59ZZA of FSMA as applied to such a firm by regulation 69 of the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulation 2018; and
(2) in all other cases, section 59ZZA of FSMA.
- 31/12/2020
section 59ZZA application
This defined term is effective from 23:00 on 31/12/2020.
means an application under section 60 of FSMA to the PRA made by an authorised person who could be given a notice under section 59ZZA of FSMA in relation to the person subject to the application.
- 31/12/2020
security
(in the Solvency II Firms Sector of the PRA Rulebook) has the meaning specified in article 3(1) of the Regulated Activities Order.
- 01/01/2016
senior insurance management function holder
means any person who is responsible for discharging a senior insurance management function.
- 07/03/2016
senior management
means those natural persons who exercise executive functions within a firm and who are responsible, and accountable to the management body, for the day-to-day management of the firm.
- 01/02/2014
senior management regime
means the requirements of the regulatory system, to the extent applicable to authorised persons, insofar as they relate to approved persons performing PRA senior management functions and relevant senior management functions.
- 10/12/2018
senior personnel
- 02/04/2015
SFCR
means the solvency and financial condition report, as detailed in Reporting 3 to 6.
- 01/01/2016
share
means the investment specified in article 76 of the Regulated Activities Order.
- 03/07/2015
ships
means the class of contract of insurance specified in paragraph 6 of Part I of Schedule 1 to the Regulated Activities Order.
- 03/07/2015
short-term deposit
- 01/01/2016
significant deviation from relevant assumptions
- 31/12/2020
significant system of governance deviation
means the determination by the PRA of a significant deviation by a UK Solvency II firm, or a group (as appropriate), from the system of governance requirements set out in Conditions Governing Business 2.2 to 7 (including pursuant to Group Supervision 17.1(1) where appropriate).
- 01/01/2016
skilled person
- 19/06/2014
small CRR firm
has the meaning given in the Remuneration Part.
- 01/01/2024
small electronic money institution
has the meaning given in regulation 2(1) of the Electronic Money Regulations.
- 12/03/2023
small non-directive insurer
means a non-directive insurer other than a large non-directive insurer.
- 01/01/2016
small payment institution
has the meaning given in regulation 2(1) of the Payment Services Regulations.
- 12/03/2023
small run-off firm
means a firm:
(1) whose Part 4A permission for effecting contracts of insurance has been cancelled as at the date on which the firm becomes a small run-off firm;
(2) which has not effected any new contracts of insurance in the 12 months before the date on which the firm becomes a small run-off firm;
(3) which has not participated as a transferee in a transfer of insurance business under Part VII of FSMA in the 12 months before the date on which the firm becomes a small run-off firm; and
(4) the value of whose technical provisions is less than £25 million, as reported in each of the firm’s two most recent annual reports and accounts published before the date on which it becomes a small run-off firm.
A firm remains a small run-off firm unless, after the date on which it becomes a small run-off firm, it:
(1) has a Part 4A permission for effecting contracts of insurance;
(2) effects a new contract of insurance; or
(3) participates as a transferee in a transfer of insurance business under Part VII of FSMA.
- 03/07/2017
Society
means the society incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.
- 19/06/2014
Solvency 2 Regulations
- 01/01/2016
solvency deficit
means the amount (if any) by which total capital after deductions fall short of individual capital resources requirements.
- 01/01/2016
Solvency I Directive
means each of:
(1) the Consolidated Life Directive;
(2) the First Non-Life Directive;
(3) the Second Non-Life Directive;
(4) the Third Non-Life Directive; and
(5) the Reinsurance Directive.
- 01/01/2016
Solvency I firm
means a firm that immediately before the Solvency II implementation date was an insurer that fell within the scope of a Solvency I Directive.
- 01/01/2016
Solvency II Directive
- 01/01/2016
Solvency II implementation date
means 1 January 2016.
- 01/01/2016
Solvency II Regulations
- 31/12/2023
specified investment
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
spread bet
has the meaning given in the PRA Handbook as at 31 July 2015.
- 03/08/2015
spread risk
- 01/01/2016
SRO firm
This defined term is effective from 23:00 on 31/12/2020.
means a firm to whom regulation 28 or 34 of Part 6 of the EEA Passport Rights (Amendment etc. and Transitional Provisions (EU Exit) Regulations 2018 applies.
- 31/12/2020
SRO insurer
This defined term is effective from 23:00 on 31/12/2020.
means a SRO firm with permission to effect contracts of insurance or carry out contracts of insurance.
- 31/12/2020
SSS
has the meaning given in Article 2(1)(10A) of CSDR.
- 08/12/2023
stakeholder pension scheme
has the meaning provided in Article 3(1) of the Regulated Activities Order.
- 03/08/2015
standard formula
means a methodology used by a firm to calculate its SCR according to the rules in the Solvency Capital Requirement – Standard Formula Part of the PRA Rulebook.
- 01/01/2016
standard formula significant risk profile deviation
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 the standard formula.
- 01/01/2016
standing data
means the information relating to a firm held by the PRA on the following matters:
(1) Communications with a firm:
(a) name;
(b) trading name(s);
(c) registered office;
(d) principal place of business;
(e) website address;
(f) complaints contact and complaints officer; and
(g) the name and email address of the primary compliance contact.
(2) Other information about a firm:
(a) name and address of the firm’s auditor;
(b) accounting reference date; and
(c) locum.
- 02/04/2015
Statement of Principle
- 19/06/2014
statement of responsibilities
means a statement of the aspects of the affairs of an authorised person for which it is intended that a person is (or will be) responsible including information required under section 60(2A) or section 62A of FSMA.
- 10/12/2018
statement of responsibilities form
(1) for a UK Solvency II firm, the Society, a managing agent, a UK ISPV and a third country branch undertaking (other than a UK-deposit insurer or a Swiss general insurer), means the form to be completed by a firm containing:
(a) the information referred to in Insurance – Allocation of Responsibilities 5.1(3);
(b) in respect of Insurance – Senior Managers Regime - Applications and Notifications 2.7, 4A.1, 5.3 and 6.3(1), the information required by section 60(2A) of FSMA; and
(c) in respect of Insurance – Allocation of Responsibilities 5.5 and for PRA senior management function holders only, the information required by section 60(2A) of FSMA.
(2) for a large non-directive insurer, means the form to be completed by a firm containing:
(a) the information referred to in Large Non-Solvency II Firms – Allocation of Responsibilities 5.1(3);
(b) in respect of Large Non-Solvency II Firms – Senior Managers Regime – Applications and Notifications 2.7, 4A.1, 5.3 and 6.3(1), the information required by section 60(2A) of FSMA; and
(c) in respect of Large Non-Solvency II Firms – Allocation of Responsibilities 5.5 and for PRA senior management function holders only, the information required by section 60(2A) of FSMA.
(3) for a small non-directive insurer, means the form to be completed by a firm containing:
(a) the information referred to in Non-Solvency II Firms – Fitness and Propriety 4.1(2); and
(b) in respect of Non-Solvency II Firms – Senior Managers Regime - Applications and Notifications 2.7, 4A.1, 5.3 and 6.3(1), the information required by section 60(2A) of FSMA.
- 10/12/2018
stock lending
means the disposal of a designated investment subject to an obligation or right to reacquire the same or a similar designated investment from the same counterparty.
- 01/01/2016
sub-consolidated basis
This term is defined externally, please refer to:
point (49) of Article 4(1) CRR
- 12/08/2022
sub-consolidation group
means the undertakings included in the scope of consolidation as a result of a requirement imposed on a ring-fenced body under Article 11(5) of CRR.
- 01/01/2019
subsidiary
This term is defined externally, please refer to:
s420(2) FSMA
- 01/01/2016
subsidiary undertaking
means an undertaking of which another undertaking is its parent undertaking.
- 12/10/2016
supervisory authority
The changes to this defined term are effective from 23:00 on 31/12/2020.
means the national authorities empowered by law or regulation of the UK to supervise UK Solvency II firms for the purposes of the provisions implementing the Solvency II Directive, being the PRA and FCA.
- 31/12/2020
supervisory function
means any function within a firm that is responsible for the supervision of its senior personnel.
- 02/04/2015
support arrangements
means arrangements under which the financial resources available to a with-profits fund include (or are intended in particular circumstances to include) financial resources from outside that with-profits fund.
- 01/01/2016
suretyship
- 04/11/2024
surplus assets
has the meaning given in Friendly Society – Asset Valuation 5.3.
- 01/01/2016
surrender value
means:
(1) where the contract is a contract of life assurance or a contract for an annuity, the amount (including a nil amount) payable by the firm or other body issuing the contract on surrender of the policy;
(2) where the contract is a personal pension scheme or a stakeholder pension scheme, the amount payable on the transfer of the investor’s accrued rights under that contract to another personal pension scheme or a stakeholder pension scheme; or
(3) where the contract is for any other matter, the amount payable by the firm on the surrender of the policy.
- 01/01/2016
Swiss general insurance company
has the meaning given in article 1(2) of the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 2001/2507).
- 01/01/2016
Swiss general insurer
means a Swiss general insurance company which has a Part 4A permission to effect contracts of insurance or carry out contracts of insurance of a kind which is subject to the Swiss Treaty Agreement.
- 01/01/2016
Swiss Treaty Agreement
means the agreement of 10 October 1989 between the European Economic Community and the Swiss Confederation on direct insurance other than life insurance, approved on behalf of the European Economic Community by the Council Decision of 20 June 1991 (No 91/370/EEC).
- 01/01/2016
syndicate
means one or more persons, to whom a particular syndicate number has been assigned by or under the authority of the Council, carrying out contracts of insurance or effecting contracts of insurance written at Lloyd's.
- 19/06/2014
syndicate assets
means the assets managed by or at the direction of a managing agent in respect of insurance business carried on through a syndicate and overseas business regulatory deposits funded from those assets.
- 01/01/2016
syndicate year
means a year of account of a syndicate.
- 01/01/2016
Letter: T
technical provisions
(1) (in the Solvency II Firms Sector) means the technical provisions established in accordance with Technical Provisions 2.1;
(2) (in the Non-Solvency II Firms Sector) means a technical provision established:
(a) for general insurance business, in accordance with Insurance Company - Technical Provisions 2.1; and
(b) for long-term insurance business, in accordance with Insurance Company - Technical Provisions 2.2.
- 01/01/2016
temporary high balance
means that part of an eligible deposit in excess of the coverage level set out in Depositor Protection 4.2 which meets the additional criteria set out in Depositor Protection 10.2.
- 01/07/2023
The EU
This term is defined externally, please refer to:
s1(2) Interpretation Act 1978
- 29/04/2014
third country
The changes to this defined term are effective from 23:00 on 31/12/2020.
means a territory or country other than the United Kingdom.
- 31/12/2020
third country branch
- 01/01/2016
third country branch undertaking
means:
(1) a third country insurance undertaking that has a third country insurance branch; or
(2) a third country insurance undertaking or third country reinsurance undertaking that has a third country pure reinsurance branch.
- 01/01/2016
third country CRR firm
The changes to this defined term are effective from 23:00 on 31/12/2020.
means an overseas firm that would be a CRR firm if it had been a UK undertaking, had carried on all of its business in the UK and had obtained whatever authorisations for doing so as are required under FSMA.
- 31/12/2020
third country financial conglomerate
has the meaning given in regulation 7 of the Financial Conglomerates Regulations.
- 12/08/2022
third country firm
The changes to this defined term are effective from 23:00 on 31/12/2020.
means an overseas firm.
- 31/12/2020
third country insurance branch
means a permanent presence in the UK of a third country insurance undertaking that has a permission to effect contracts of insurance or carry out contracts of insurance (except an undertaking which pursues only the business of reinsurance in the UK).
- 01/01/2016
third country insurance services provider
This defined term is effective from 23:00 on 31/12/2020.
means a third country insurance undertaking that has a permission to effect contracts of insurance or carry out contracts of insurance in the UK and does not have a permanent presence in the UK.
- 31/12/2020
third country insurance undertaking
- 31/12/2020
third country investment firm
The changes to this defined term are effective from 23:00 on 31/12/2020.
a firm which would be a MiFID investment firm if it had its head office in the UK.
- 31/12/2020
third country pure reinsurance branch
means a permanent presence in the UK of a third country insurance undertaking or third country reinsurance undertaking, that has a permission to effect contracts of insurance or carry out contracts of insurance and which pursues only the business of reinsurance in the UK.
- 01/01/2016
third country reinsurance undertaking
- 31/12/2020
Third Life Directive
means the Council Directive of 10 November 1992 on the coordination of laws, etc, and amending Directives 79/267/EEC and 90/619/EEC (No 92/96/EEC).
- 19/06/2014
Third Non-Life Directive
means the Council Directive of 18 June 1992 on the coordination of laws, etc, and amending Directives 73/239/EEC and 88/357/EEC (No 92/49/EEC).
- 19/06/2014
third-country CSD
has the meaning given in Article 2(1)(2) of CSDR.
- 08/12/2023
Threshold conditions
This term is defined externally, please refer to:
s417 FSMA (by reference to s55B(1) FSMA)
- 01/10/2015
tied agent
means a person who, under the full and unconditional responsibility of only one MiFID investment firm or third country investment firm on whose behalf it acts, promotes investment services and/or ancillary services to clients or prospective clients, receives and transmits instructions or orders from the client in respect of investment services or financial instruments, places financial instruments and/or provides advice to clients or prospective clients in respect of those financial instruments or investment services.
- 02/04/2015
Tier 1 capital
has the meaning it has in Article 25 of the CRR.
- 01/01/2022
tier 1 capital (leverage)
means tier 1 capital as defined in Article 25 of the CRR except that an additional tier 1 capital instrument can only be counted as tier 1 capital (leverage) if it either:
(a) converts into common equity tier 1 capital; or
(b) writes down,
when the common equity tier 1 capital ratio of the firm falls below a level equal to either:
(a) 7%; or
(b) a level higher than 7%,
as specified in the provisions governing the instrument.
In this definition:
(a) ‘additional tier 1 capital’ has the meaning given in Article 61 of the CRR;
(b) ‘common equity tier 1 capital’ has the meaning given in Article 50 of the CRR; and
(c) ‘common equity tier 1 capital ratio’ has the meaning given in Article 92(2)(a) of the CRR.
- 01/01/2022
Tier 1 own funds
- 01/01/2016
Tier 2 basic own funds
means an item of Tier 2 own funds that is an item of basic own funds.
- 01/01/2016
Tier 2 own funds
- 01/01/2016
Tier 3 own funds
- 01/01/2016
tier one capital
means an item of capital that is specified in stages A (Core tier one capital), B (Perpetual non-cumulative preference shares) or C (innovative tier one capital) of the capital resources table.
- 01/01/2016
tier two capital resources
means the sum calculated at stage I (Total tier two capital) of the calculation in the capital resources table.
- 01/01/2016
tontine
means the class of contracts of insurance specified in paragraph V of part II of Schedule 1 to the Regulated Activities Order.
- 01/01/2016
total assets
means:
(1) for a firm which is required to submit data item FSA001, the sum of the firm’s assets as recorded at Cells 20A plus 20B of that data item;
(2) for a firm which is required to submit data item template 1.01 of Annex III of the Supervisory Reporting ITS, the sum of the firm’s assets as recorded at row 380 of that data item; or
(3) for a firm which is required to submit data item template 1.01 of Annex IV of the Supervisory Reporting ITS, the sum of the firm’s assets as recorded at row 380 of that data item.
- 01/10/2018
total capital after deductions
(1) in relation to an undertaking with a Part 4A permission, the total capital after deductions calculated as if that undertaking were required to calculate its capital resources in accordance with Insurance Company – Capital Resources Table 2.1, but with such adjustments being made to secure that the undertaking’s calculation of its total capital after deductions complies with relevant capital provisions in the PRA Rulebook or FCA Handbook;
(2) in relation to any other subsidiary, the total capital after deductions of the undertaking calculated as if the undertaking were required to calculate its total capital resources in accordance with Insurance Company – Capital Resources Table 2.1.
- 01/01/2016
total exposure measure
has the meaning given in Article 429(4) of Chapter 3 of the Leverage Ratio (CRR) Part.
- 01/01/2022
transferable securities
means as defined in Article 4(1)(44) of MiFID II.
- 03/01/2018
transitional deduction
- 01/01/2016
Transitional Order
means the Financial Services (Banking Reform) Act 2013 (Transitional and Savings Provisions) Order 2015 (SI 2015/492).
- 10/12/2018
Treasury
This term is defined externally, please refer to:
Schedule 1, Interpretation Act 1978
- 01/01/2022
Letter: U
UCITS
The changes to this defined term are effective from 23:00 on 31/12/2020.
(1) an undertaking:
(a) with the sole object of collective investment in transferable securities or in other liquid financial instruments of capital raised from the public and which operate on the principle of risk-spreading; and
(b) with units which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of those undertakings' assets (and for these purposes, action taken by the undertaking to ensure that the stock exchange value of its units does not significantly vary from their asset value is to be regarded as equivalent to such repurchase or redemption).
(2) undertakings for collective investment in transferable securities that are established in the European Economic Area in accordance with the UCITS Directive.
- 31/12/2020
UCITS Directive
means the European Parliament and Council Directive of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (No 2009/65/EC) as amended.
- 03/08/2015
UK
means United Kingdom.
- 01/01/2014
UK bank
means a UK undertaking that has permission under Part 4A of FSMA to carry on the regulated activity of accepting deposits and is a credit institution, but is not a credit union, friendly society or a building society.
- 01/01/2014
UK designated investment firm
- 05/09/2014
UK firm
The changes to this defined term are effective from 23:00 on 31/12/2020.
(1) has the meaning given in paragraph 10 of Schedule 3 to FSMA (EEA Passport Rights);
(2) in the Depositor Protection part and Policyholder Protection part, means an authorised person who:
(a) has permission given under Part 4A of FSMA to carry on regulated activities that consist of or include one or more PRA-regulated activities; and
(b) is incorporated in the UK.
- 31/12/2020
UK ISPV
means an undertaking with a Part 4A permission to carry on the regulated activity of insurance risk transformation.
- 08/12/2017
UK parent financial holding company
This defined term is effective from 23:00 on 31/12/2020.
means a financial holding company firm in the UK which is not itself a subsidiary of an institution authorised in the UK, or of a financial holding company firm or mixed financial holding company set up in the UK.
- 31/12/2020
UK parent institution
This defined term is effective from 23:00 on 31/12/2020.
means a parent institution authorised in the UK which has an institution or financial institution as subsidiary or which holds a participation in such an institution or financial institution, and which is not itself a subsidiary of another institution authorised in the UK or of a financial holding company or mixed financial holding company set up in the UK.
- 31/12/2020
UK parent mixed financial holding company
This defined term is effective from 23:00 on 31/12/2020.
means a mixed financial holding company in the UK which is not itself a subsidiary of an institution authorised in the UK, or of a financial holding company firm or mixed financial holding company set up in the UK.
- 31/12/2020
UK parent undertaking
This defined term is effective from 23:00 on 31/12/2020.
means a UK parent institution, a UK parent financial holding company or a UK parent mixed financial holding company.
- 31/12/2020
UK Solvency II firm
has the meaning given in Insurance General Application 2.
- 01/01/2016
UK undertaking
means an undertaking within the meaning of section 1161(1) of the Companies Act 2006 (meaning of “undertaking” and related expressions) whose registered office or, if the undertaking does not have a registered office, whose head office is in any part of the UK.
- 01/01/2014
UK-adopted international accounting standards
This defined term is effective from 23:00 on 31/12/2020.
has the meaning given to it in section 474(1) of the Companies Act 2006.
- 31/12/2020
undertaking
means an undertaking within the meaning of section 1161(1) of the Companies Act 2006 (meaning of “undertaking” and related expressions).
- 01/02/2014
undertaking specific parameters
- 01/01/2016
underwriting risk
means the risk of loss or of adverse change in the value of insurance obligations, due to inadequate pricing and provisioning assumptions.
[Note: Art. 13(30) of the Solvency II Directive]
- 30/06/2024
unit
means:
(1) (in relation to a collective investment scheme) the investment, specified in article 81 of the Regulated Activities Order (Units in a collective investment scheme) and defined in section 237(2) of FSMA (other definitions); and
(2) (in relation to an alternative investment fund) the right or interest (however described) of an investor in an alternative investment fund.
- 01/01/2016
United Kingdom
This term is defined externally, please refer to:
Interpretation Act 1978 Schedule 1
- 29/04/2014
unregulated activity
means an activity that is not a regulated activity.
- 01/01/2014
Letter: V
volatility adjustment
- 30/06/2024
Letter: W
waiver
- 03/07/2015
with-profits fund
means the business of the firm, or a particular part of the business of the firm, in the profits of which certain with-profits policies are eligible to participate through discretionary distributions under such policies and the assets of which comprise the items set out in (1) to (6) less the outgoings in (7) and (8) (including the items and outgoings relating to both current and past business):
(1) premiums and other receivables in respect of with-profits policies;
(2) other receipts of the firm’s with-profits insurance business, including tax receipts;
(3) amounts which have been provided by the firm to facilitate the carrying on of its with-profits insurance business (other than excluded assets);
(4) all income and capital receipts in respect of the items in (1) to (3);
(5) assets into which the items in (1) to (4) have been converted, including assets representing investment in non-profit insurance business; and
(6) premiums, receivables, other receipts, income and capital receipts from non-profit insurance business falling within (5) or otherwise written for the benefit, in whole or in part, of the firm’s with-profits insurance business;
outgoings:
(7) outgoings in respect of the firm’s with-profits insurance business permitted in accordance with any relevant provision of the FCA Handbook or any other applicable regulatory requirement and, to the extent that incoming items have been included in (6), non-profit insurance business; and
(8) transfers permitted in accordance with any relevant provision of the FCA Handbook or any other applicable regulatory requirement;
and, where so required by COBS 20.1A.2R of the FCA Handbook, each distinct part of a firm’s with-profits fund identified in accordance with that rule shall constitute a separate with-profits fund.
- 01/01/2016
with-profits insurance business
means the business of effecting contracts of insurance or carrying out contracts of insurance that are with-profits policies.
- 01/01/2016
with-profits policy
means a contract of long-term insurance which provides benefits through eligibility to participate in discretionary distributions based on profits arising from the firm's business or from a particular part of the firm's business.
- 01/01/2016
with-profits policy liabilities
(1) (for a UK Solvency II firm) means, in relation to a with-profits fund, the value of policies liabilities attributable to with-profits policies (excluding any liabilities relating to non-profit insurance associated with such policies) set out in, and calculated on the basis prescribed by Surplus Funds 3.3 or, if applicable, 3.4 and (in either case) having also made adequate provisions for amounts representing future policy-related liabilities;
(2) (for a non-directive insurer other than a friendly society) means, in relation to a with-profits fund, the value of mathematical reserves attributable to with-profits policies (excluding any liabilities relating to non-profit insurance associated with such policies) determined in accordance with the rules in Insurance Company – Mathematical Reserves;
(3) (for a non-directive friendly society) means, in relation to a with-profits fund, the value of mathematical reserves attributable to with-profits policies (excluding any liabilities relating to non-profit insurance associated with such policies) determined in accordance with the rules in Friendly Society – Liability Valuation.
- 01/01/2016
worker
has the meaning as defined by section 230(3) of the Employment Rights Act 1996 and as extended under section 43K of the Employment Rights Act 1996.
- 07/09/2016
working day
means any day other than Saturday, Sunday, Good Friday, Christmas Day and any day which is a bank holiday in any part of the UK under section 1 of the Banking and Financial Dealings Act 1971.
- 01/01/2016
write-down manager
has the meaning given to the term ‘the manager’ in 377G(1) of FSMA (The manager).
- 19/09/2023
write-down order
has the meaning given in section 377A(1) of FSMA (Write-down orders).
- 19/09/2023
Letter: Z
zillmerising
means a method for modifying the net premium reserve method of valuing a contract of long-term insurance by increasing the part of the future premiums for which credit is taken so as to allow for initial expenses.
- 01/01/2016