SUP App 2

Insurers: Regulatory intervention points and run-off plans

SUP App 2.1

Application

SUP App 2.1.1

See Notes

handbook-rule
SUP App 2.1 to 2.15 apply to an insurer, unless it is:
(3) an incoming EEA firm; or

SUP App 2.1.2

See Notes

handbook-guidance
SUP App 2.1 to 2.15 apply to every friendly societythat is an insurer.

SUP App 2.1.3

See Notes

handbook-rule
SUP App 2.16 applies to the Society.

SUP App 2.1.4

See Notes

handbook-guidance
SUP App 2.15 applies to an insurer carrying on with-profits business, but only if COBS 20.2.53 R (Ceasing to effect new contracts of insurance in a with-profits fund) also applies.

SUP App 2.2

Interpretation

SUP App 2.2.1

See Notes

handbook-rule

For the purpose of SUP App 2.1 to 2.14:

  1. (1) "capital resources":
    1. (a) in relation to a non-directive friendly society, has the meaning given to "margin of solvency" in rule 4.1(4) of IPRU(FSOC);
    2. (b) in relation to a participating insurance undertaking, means P+T, where P and T have the meanings given by INSPRU 6.1.45R (3)(a) and (e) respectively, as calculated in accordance with INSPRU 6.1.43 R ; and
    3. (c) in relation to any other firm, means the firm's capital resources as calculated in accordance with GENPRU 2.2.17 R;
  2. (2) "guarantee fund":
    1. (a) in relation to a non-directive friendly society, has the meaning given to that term in IPRU(FSOC);
    2. (b) in relation to a participating insurance undertaking, means the amount of capital resources which that firm must hold to comply with INSPRU 6.1.45R (2);
    3. (c) in relation to a firm which is not covered by (a) or (b), carrying on general insurance business, means the amount of capital resources which that firm must hold to comply with GENPRU 2.2.34 R; and
    4. (d) in relation to a firm which is not covered by (a) or (b), carrying on long-term insurance business, means the amount of capital resources which that firm must hold to comply with GENPRU 2.2.33 R;
  3. (3) "material transaction" means a transaction (when aggregated with any similar transactions) in which:
    1. (a) the price actually paid or received for the transfer of assets or liabilities or the performance of services; or
    2. (b) the price which would have been paid or received had that transaction been negotiated at arm's length between unconnected parties;
    3. exceeds:
    4. (c) in the case of a firm which carries on long-term insurance business, but not general insurance business, the sum of €20,000 and 5% of the firm's liabilities arising from its long-term insurance business, excluding property-linked liabilities and net of reinsurance ceded; or
    5. (d) in the case of a firm which carries on general insurance business, but not long-term insurance business, the sum of €20,000 and 5% of the firm's liabilities arising from its general insurance business, net of reinsurance ceded; or
    6. (e) in the case of a firm which carries on both long-term insurance business and general insurance business:
      1. (i) where the transaction is in connection with the firm's long-term insurance business, the sum of €20,000 and 5% of the firm's liabilities arising from its long-term insurance business, excluding property-linked liabilities and net of reinsurance ceded; and
      2. (ii) in all other cases, the sum of €20,000 and 5% of the firm's liabilities arising from its general insurance business, net of reinsurance ceded; and
  4. (4) "required margin of solvency":
    1. (a) in relation to a non-directive friendly society, has the meaning given to that term in IPRU(FSOC);
    2. (b) in relation to a participating insurance undertaking, means R-S-U, where R, S and U have the meanings given by INSPRU 6.1.45R (3)(c), (d) and (f) respectively;
    3. (c) in relation to a firm which is not covered by (a) or (b), carrying on general insurance business, means the general insurance capital requirement applicable to that firm; and
    4. (d) in relation to a firm which is not covered by (a) or (b), carrying on long-term insurance business, means the long-term insurance capital requirement applicable to that firm.

SUP App 2.2.2

See Notes

handbook-guidance

The calculation of each of the base capital resources requirement, the long-term insurance capital requirement and the general insurance capital requirement is set out in GENPRU 2.1 . The calculation of each of the "guarantee fund" and "required margin of solvency" for non-directive friendly societies is set out in chapter 4 of IPRU(FSOC).

SUP App 2.3

Purpose

SUP App 2.3.1

See Notes

handbook-guidance
To fulfil its obligations under the Insurance Directives, and as part of the PRA's risk-based approach to supervision, there are certain times when the PRA needs to monitor a firm more closely than it normally would. This is so the PRA can fulfil its function of supervising the safety and soundness of firms properly and meet the statutory objective of securing an appropriate degree of protection for policyholders .

SUP App 2.3.2

See Notes

handbook-guidance
The rules in SUP App 2.1 to 2.14require a firm to submit reports and information to the PRA when:
(1) a firm is failing to satisfy threshold condition 4D or 5D as applicable, and its capital resources have fallen below its required margin of solvency, or its guarantee fund; or
(2) the capital resources of a firm have fallen below its capital resources requirement; or
(3) a firm has decided to cease to effect new contracts of insurance; or
(4) a firm is going through periods of potential uncertainty, for example, when it has come under the control of a new parent undertaking or following the grant or variation of permission.

SUP App 2.3.3

See Notes

handbook-guidance
The PRA may also ask a firm to submit reports and information to it when the firm's capital resources fall below the level advised in individual capital guidance given to the firm.

SUP App 2.3.4

See Notes

handbook-guidance
In accordance with the Insurance Directives, a firm whose capital resources have fallen below its required margin of solvency, or its guarantee fund, is required, by the rule set out in this appendix, to submit a scheme of operations, together with an explanation of how its capital resources will be adequately restored. In order to secure an appropriate degree of protection for policyholders , the PRA applies the rule in this appendix to firms to which the provisions of the Insurance Directives would not otherwise apply.

SUP App 2.3.5

See Notes

handbook-guidance
A firm which is entering into run-off is required to submit a scheme of operations, including an explanation of how its liabilities to policyholders will be met in full. Where the capital resources of such a firm subsequently fall below its required margin of solvency, the firm is required to submit a plan for restoration.

SUP App 2.3.6

See Notes

handbook-guidance
Following a change in control, or the grant or variation of permission, the reports submitted help the PRA to identify when a firm departs from the scheme of operations submitted as part of the notification of a change in control, or an application for the grant or variation of permission, and on which basis such notification or application was approved.

SUP App 2.3.7

See Notes

handbook-guidance
Principle 4 of the PRA's Principles for Businesses provides that firm's should hold adequate financial resources, while GENPRU 1.2.26 R requires a firm to maintain overall financial resources which are adequate to ensure that there is no significant risk that it cannot meet its liabilities as they fall due. In considering these requirements, a firm may decide to maintain capital resources above the level advised in individual capital guidance given by the PRA , or, if no individual capital guidance has been given, above its capital resources requirement. The amount of any such additional capital resources held is at the discretion of the firm. However, the extent to which a firm matches these additional capital resources to the volatility of its capital base, in conjunction with the strength of its systems and controls environment, is likely to affect the frequency with which it is subject to intervention under this appendix.

SUP App 2.3.8

See Notes

handbook-guidance
In relation to a firm carrying on with-profits insurance business, action which it takes either to restore its capital resources to the levels set by the intervention points in this appendix, or to prevent its capital resources falling below those points, should be consistent with Principle 6 of the FCA's Principles for Businesses. The FCA's Principle 6 requires a firm to pay due regard to the interests of its customers and treat them fairly.

SUP App 2.3.9

See Notes

handbook-guidance
These rules are in addition to the other rules and guidance in SUP, in particular SUP 2 (Information gathering by the appropriate regulator on its own initiative), SUP 15 (Notifications to the FCA or PRA), SUP 16(Reporting requirements) and the Principles for Businesses (PRIN).

SUP App 2.4

Capital resources below guarantee fund

SUP App 2.4.1

See Notes

handbook-rule
If a firm's capital resources fall below its guarantee fund, it must, within 14 days of the firm becoming aware of this event, submit to the PRA a short-term financial plan, including:
(2) an explanation of how, if at all, and by when, it expects its capital resources to be adequately restored to the guarantee fund.

SUP App 2.4.2

See Notes

handbook-guidance
See SUP App 2.11.2 G for guidance on the period that the scheme of operations should cover.

SUP App 2.5

Capital resources below required margin of solvency

SUP App 2.5.1

See Notes

handbook-rule
Unless SUP App 2.5.3 R applies:
(1) if a firm's capital resources are such that they no longer equal or exceed its required margin of solvency; or
(2) if a firm no longer complies with GENPRU 2.2.32 R and GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b), as applicable;

it must, within 28 days of becoming aware of this event, submit to the PRA a plan for the restoration of a sound financial position, including:
(4) an explanation of how, if at all, and by when:
(a) it expects its capital resources to be restored to the required margin of solvency; or
(b) as the case may be, it expects to comply with GENPRU 2.2.32 R and GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b), as applicable.

SUP App 2.5.2

See Notes

handbook-guidance
See SUP App 2.11.2 G for guidance on the period that the scheme of operations should cover.

SUP App 2.5.3

See Notes

handbook-rule
If a firm:
(2) it has previously submitted either a run-off plan in accordance with SUP App 2.8.1 R or a scheme of operations in accordance with SUP App 2.5.1 R;

it must, within 28 days of becoming aware that it falls into SUP App 2.5.1 R (1) or SUP App 2.5.1 R (2):
(3) notify the PRA ; and
(4) submit a plan for restoration which:
(a) explains why the firm's capital resources have fallen below its required margin of solvency or, as the case may be, it no longer complies with GENPRU 2.2.32 R or GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b), as applicable; and
(b) demonstrates how, if at all, and by when, the firm will restore it or, as the case may be, resume compliance with GENPRU 2.2.32 R and GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b), as applicable.

SUP App 2.6

Capital resources below capital resources requirement

SUP App 2.6.1

See Notes

handbook-rule
Unless any of SUP App 2.4.1 R, SUP App 2.5.1 R or SUP App 2.5.3 R applies, if a firm's capital resources fall below its capital resources requirement, it must, within 28 days of becoming aware of this event:
(1) notify the PRA ; and
(2) submit a plan for restoration, which:
(a) explains why the firm's capital resources have fallen below its capital resources requirement; and
(b) demonstrates how, if at all, and by when, the firm will restore it.

SUP App 2.7

Capital resources below the level of individual capital guidance

SUP App 2.7.1

See Notes

handbook-guidance
Unless any of SUP App 2.4.1 R, SUP App 2.5.1 R, SUP App 2.5.3 R or SUP App 2.6.1 R applies, if a firm's circumstances change, such that its capital resources have fallen, or are expected to fall, below the level advised in individual capital guidance given to the firm by the appropriate regulator , then, consistent with PRIN 2.1.1 RPrinciple 11 (Relations with regulators), a firm should inform the appropriate regulator of this fact as soon as practicable, explaining why capital resources have fallen, or are expected to fall, below the level advised in individual capital guidance , and:
(1) what action the firm intends to take to increase its capital resources; or
(2) what modification the firm considers should be made to the individual capital guidance which it has been given.

SUP App 2.7.2

See Notes

handbook-guidance
In the circumstance set out in SUP App 2.7.1 G, the PRA may ask a firm for alternative or more detailed proposals and plans or further assessments and analyses of capital adequacy and risks faced by the firm. The PRA will seek to agree with the firm appropriate timescales and scope for any such additional work, in light of the circumstances which have arisen.

SUP App 2.7.3

See Notes

handbook-guidance
In relation to a firm carrying on with-profits insurance business, if it intends either (a) to remedy a fall in the level of capital resources advised in its individual capital guidance , or (b) to prevent a fall in the level advised in that guidance, for example, in either case, by taking management action to de-risk a with-profits fund or by reducing non-contractual benefits for policyholders, it should explain to the appropriate regulator how such proposed actions are consistent with the firm's obligations under the FCA's Principle 6 (Customers' interests).

SUP App 2.7.4

See Notes

handbook-guidance
If a firm's capital resources fall below the level advised in individual capital guidance given to the firm and, at the same time, any one or more of SUP App 2.4.1 R, SUP App 2.5.1 R, SUP App 2.5.3 R or SUP App 2.6.1 R applies, the firm should first comply with those rules. Those rules are concerned with circumstances where capital resources are likely to have fallen to levels much lower than the level advised in individual capital guidance and are, in some cases, requirements imposed by the Insurance Directives.

SUP App 2.7.5

See Notes

handbook-guidance
If a firm has not accepted individual capital guidance given by the PRA it should, nevertheless, inform the PRA as soon as practicable if its capital resources have fallen below the level suggested by that individual capital guidance . In such circumstances, the PRA may ask the firm for further explanation as to why it does not consider the individual capital guidance to be appropriate. The PRA may also consider using its powers under section 55M of the Act to, on its own initiative, require a firm to hold such capital as the PRA considers is necessary for the firm to comply with GENPRU 1.2.26 R .

SUP App 2.8

Ceasing to effect contracts of insurance

SUP App 2.8.1

See Notes

handbook-rule
If a firm decides to cease to effect new contracts of insurance, it must, within 28 days of that decision, submit a run-off plan to the appropriate regulator including:
(2) an explanation of how, or to what extent, all liabilities to policyholders (including, where relevant, liabilities which arise from the regulatory duty to treat customers fairly in setting discretionary benefits) will be met in full as they fall due.

SUP App 2.8.2

See Notes

handbook-guidance
SUP App 2.8.1 R only applies if a firm ceases to effecting new contracts of insurance in respect of the whole of its insurance business.

SUP App 2.8.3

See Notes

handbook-guidance
For the purposes of SUP App 2.8.1 R, a new contracts of insurance excludes contracts effected under a term in a subsisting contract of insurance.

SUP App 2.8.4

See Notes

handbook-guidance
Under Principle 11, the appropriate regulator normally expects to be notified by a firm when it decides to cease effecting new contracts of insurance in respect of one or more classes of contract of insurance (see SUP 15.3.8 G). At the same time, the appropriate regulator would normally expect the firm to discuss with it the need for the firm to apply to vary its permission (see SUP 6.2.6 G and SUP 6.2.7 G) and, if appropriate, to submit a scheme of operations in accordance with SUP App 2.8.1 R.

SUP App 2.8.5

See Notes

handbook-guidance
See SUP App 2.11.2 G for guidance on the period that the scheme of operations should cover.

SUP App 2.10

Grant or variation of permission

SUP App 2.10.1

See Notes

handbook-guidance
The PRA may ask a firm seeking a grant or variation of permission to provide a scheme of operations as part of the application process (see SUP 6.3.25 G). Such a firm is not required to submit to the PRA a further scheme of operations under this appendix unless SUP App 2.4, SUP App 2.5 or SUP App 2.8 applies. SUP App 2.13 and SUP 6 Annex 4 do, however, apply to such a firm.

SUP App 2.11

Submission of a scheme of operations or a plan for restoration

SUP App 2.11.1

See Notes

handbook-guidance
A firm should discuss its plan in draft with the PRA before submitting it. If a plan is submitted which does not satisfy the PRA that the firm can restore its capital resources (as appropriate), or meet its liabilities as they fall due, the PRA may use its own-initiative power to vary or cancel the firm's permission. If a firm submitting a plan is part of a group of companies, the PRA may ask that firm to provide additional information in relation to other companies in the group, if this is necessary to establish how the firm will restore its own sound financial position. The firm should agree in discussion with the PRA the nature of such additional information.

SUP App 2.11.2

See Notes

handbook-guidance
The schemes of operations required when a firm's capital resources have fallen below its required margin of solvency or its guarantee fund (see SUP App 2.5.1 R and SUP App 2.4.1 R, respectively) should cover a period which is sufficient to demonstrate that the firm's capital resources will be adequately restored. Typically this would be a period of at least three years. However, if a scheme of operations has expired, but SUP App 2.4.1 R or SUP App 2.5.1 R continues to apply, the firm should submit a new scheme of operations. The scheme of operations required by SUP App 2.8.1 R, when a firm ceases to effect new contracts of insurance, should cover the run-off period until all liabilities to policyholders are met.

SUP App 2.11.3

See Notes

handbook-guidance
The period to be covered by, and the details to be included in, the plan for restoration required by SUP App 2.5.3 R will depend on the circumstances of the firm, why its capital resources have fallen below its required margin of solvency and the degree of risk that that fall will be repeated, even if the firm restores its capital resources in accordance with its plan.

SUP App 2.11.4

See Notes

handbook-guidance
In relation to a firm which carries on with-profits insurance business and which submits a plan, the appropriate regulator would expect an explanation of how any actions it plans to take to restore capital resources to the level of the guarantee fund, required margin of solvency or capital resources requirement are consistent with the firm's obligations under the FCA's Principle 6 (Customers' interests).

SUP App 2.12

Content of a scheme of operations

SUP App 2.12.1

See Notes

handbook-rule
A scheme of operations must:
(1) describe the firm's business strategy;
(2) include financial projections (including appropriate scenarios and stress-tests) as follows:
(a) a forecast summary profit and loss account in accordance with SUP App 2.12.7 R;
(b) a forecast summary balance sheet in accordance with SUP App 2.12.8 R; and
(c) a forecast statement of capital resources in accordance with SUP App 2.12.9 R; and
(3) as at the end of each financial year which falls (in whole or part) within the period to which the scheme of operations relates:
(a) describe the assumptions which underlie those forecasts and the reasons for adopting those assumptions; and
(b) identify any material transactions proposed to be effected or carried out with, or in respect of, any associate.

SUP App 2.12.2

See Notes

handbook-guidance
The business strategy referred to at SUP App 2.12.1R (1) should include a description of the nature of the risks which the firm is underwriting, or intends to underwrite. It should also give an explanation of the firm's strategy for managing the risks associated with carrying on insurance business (including, in particular, reinsurance).

SUP App 2.12.3

See Notes

handbook-guidance
The amount of detail to be given on the firm's business strategy required by SUP App 2.12.1R (1) should be appropriate to the scale and complexity of the firm's operations and the degree of risk involved.

SUP App 2.12.4

See Notes

handbook-rule
The information required by SUP App 2.12.1R (1) must reflect the nature and content of the rules relating to capital resources applicable to a firm.

SUP App 2.12.5

See Notes

handbook-guidance
In relation to firms covered by SUP App 2.1 to 2.14, IPRU(FSOC) 4.1 sets out the rules relating to capital resources for non-directive friendly societies and GENPRU 2.1, GENPRU 2.2 and INSPRU 6.1 set out the rules relating to capital resources for every other firm. The capital resources which a firm is required to maintain vary according to whether the firm has its head office in the United Kingdom or overseas, and depending on the nature of the insurance business it carries on. The information which a firm is required to submit under SUP App 2.12.1 R should reflect the nature and content of the rules relating to capital resources identified above. For example, in order to satisfy SUP App 2.12.1 R, a firm with its head office outside the United Kingdom which is carrying on direct insurance business in the United Kingdom should submit separate information concerning its world-wide activities and its UK activities.

SUP App 2.12.6

See Notes

handbook-guidance
To reflect its obligations under GENPRU 2.2.22 G or IPRU(FSOC) 4.1(2) (as applicable), in order to comply with SUP App 2.12.1 R, a firm which carries on both long-term insurance business and general insurance business should submit separate information for each type of insurance business.

SUP App 2.12.7

See Notes

handbook-rule
Summary profit and loss account (see SUP App 2.12.1R (2)(a))

SUP App 2.12.8

See Notes

handbook-rule
Summary balance sheet (see SUP App 2.12.1R (2)(b))

SUP App 2.12.9

See Notes

handbook-rule
A forecast statement of capital resources (under SUP App 2.12.1R (2)(c)) must include the forecast capital resources and the forecast required margin of solvency at the end of each financial year or part financial year.

SUP App 2.13

Obligations on firms which have previously submitted a scheme of operations

SUP App 2.13.1

See Notes

handbook-rule
A firm which has submitted a scheme of operations to the PRA, whether required by SUP App 2.4, SUP App 2.5 or SUP App 2.8, or as part of an application under SUP 6.3 (see SUP 6.3.25 G), SUP 6.4 (see SUP 6 Annex 4), or SUP 11.5 (see SUP 11.5.5 G), or an amended scheme of operations, must during the period covered by that scheme of operations:
(1) notify the PRA at least 28 days before entering into or carrying out any material transaction with, or in respect of, an associate, unless that transaction is in accordance with a scheme of operations which has been submitted to the PRA;
(2) submit a quarterly financial return to the PRA which must include for, or as at the end of, each quarter:
(a) a summary profit and loss account prepared in accordance with SUP App 2.12.7 R;
(b) a summary balance sheet prepared in accordance with SUP App 2.12.8 R; and
(c) a statement of capital resources prepared in accordance with SUP App 2.12.9 R;

and which must identify and explain differences between the actual results and the forecasts submitted in the scheme of operations; and
(3) notify the PRA promptly of any matter which has either happened or is likely to happen and which represents a significant departure from the scheme of operations; the firm must either:
(a) explain the nature of the departure and the reasons for it and provide revised forecast financial information in the scheme of operations for its remaining term; or
(b) include an amended scheme of operations and explain the amendments and the reasons for them.

SUP App 2.13.2

See Notes

handbook-rule
A report under SUP App 2.13.1R (2) must be submitted in accordance with the rules in SUP 16.3.6R to SUP 16.3.13R.

SUP App 2.13.3

See Notes

handbook-guidance
For the purpose of SUP App 2.13.1R (1), the PRA considers that transactions with, or in respect of, associates include:
(1) contracting (as either party), advancing, repaying, writing off or agreeing to change the terms of any loan;
(2) entering into (in any capacity), releasing, calling upon or agreeing to change the terms of any guarantee, pledge, security, charge or any off-balance-sheet transaction;
(3) entering into agreements to acquire or dispose of property or which otherwise affect the nature or value of the firm's assets;
(4) making an investment (directly or indirectly) in an associate;
(5) entering into (as either party), commuting or agreeing to change the terms of, any contract of reinsurance; and
(6) entering into, or changing the terms of, any agreement to give or provide services or to share costs.

SUP App 2.13.4

See Notes

handbook-guidance
The PRA considers that a significant departure referred to in SUP App 2.13.1R (3) includes:
(1) entry or withdrawal from a line of insurance business;
(2) significant revision of the firm's strategy for managing risks, in particular the basis upon which risks are reinsured;
(3) forecast premiums being exceeded, by more than 10%, for a single financial year (or part year if the period covered by the scheme of operations is or includes part of a financial year);
(4) claims experience being significantly worse than forecast for a single financial year (or part year if the period covered by the scheme of operations is or includes part of a financial year);
(5) the actual level of capital resources being significantly worse than forecast;
(6) paid or proposed dividends being greater than those forecast; and
(7) any other transaction or circumstance which is likely to have a material effect upon available assets (as defined in IPRU(INS) 11.1).

SUP App 2.14

Financial Recovery Plan

SUP App 2.14.1

See Notes

handbook-guidance
When:
(1) the PRA has required a financial recovery plan within the meaning of article 20a of the First Non-Life Directive;
(2) the PRA is of the view that policyholders' rights are threatened because the financial position of the firm is deteriorating; and
(3) the PRA decides to require the firm to hold more capital than would otherwise be required under the Handbook to ensure that the firm will be able to fulfil the required margin of solvency in the near future;

any such higher capital requirement will be based on the financial recovery plan.

SUP App 2.16

Regulatory intervention points for Lloyd's

Application

SUP App 2.16.1

See Notes

handbook-rule

Interpretation

SUP App 2.16.2

See Notes

handbook-rule
For the purpose of SUP App 2.16 and the application of SUP App 2 to the Society:
(1) "capital resources", as the context requires:
(a) in relation to the Society's own capital resources, means its own capital resources calculated in accordance with the capital resources table;
(b) in relation to a member's capital resources, means the member's capital resources calculated in accordance with GENPRU 2.3.22 R;
(c) in relation to the aggregate capital resources of the Society and the members supporting the insurance business of the members, means the aggregate of the capital resources in (1)(a) and (b) but excluding the Society's callable contributions;
(2) "guarantee fund":
(a) in relation to the general insurance business carried on by members, means the amount of capital resources required in order to comply with GENPRU 2.2.26 R, GENPRU 2.3.17 G and GENPRU 2.3.26 R; and the "member's share of the guarantee fund" for general insurance business means the result of the calculation set out in GENPRU 2.3.27 R;
(b) in relation to the long-term insurance business carried on by members, means the amount of capital resources required in order to comply with GENPRU 2.2.25 R and GENPRU 2.3.17 G; and the "member's share of the guarantee fund" for long-term insurance business means the result of the calculation set out in GENPRU 2.3.25 R;
(3) "required margin of solvency":
(a) in relation to the general insurance business carried on by members, means the higher of the Society GICR and the general insurance capital requirement for the members in aggregate; and
(b) in relation to the long-term insurance business carried on by members, means the long-term insurance capital requirement for the members in aggregate.

Capital resources below guarantee fund

SUP App 2.16.3

See Notes

handbook-rule
For the purposes of SUP App 2.4.1 R and SUP App 2.4.2 G, capital resources will have fallen below the guarantee fund if the Society's own capital resources are such that they are no longer sufficient to meet the aggregate of, for each member, the amount, if any, by which the member's capital resources fall short of the member's share of the guarantee fund.

Capital resources below required margin of solvency

SUP App 2.16.4

See Notes

handbook-rule
For the purposes of SUP App 2.5.1 R to SUP App 2.5.3 R, capital resources will be such that they no longer equal or exceed the required solvency margin if the Society's own capital resources are insufficient to meet the aggregate of, for each member, the amount, if any, by which the member's capital resources fall short of the member's share of the required solvency margin.

Capital resources below capital resources requirement

SUP App 2.16.5

See Notes

handbook-rule
For the purposes of SUP App 2.6.1 R, capital resources will have fallen below the capital resources requirement if the Society's own capital resources are insufficient to meet the aggregate of, for each member, the amount, if any, by which the member's capital resources fall short of the member's share of the capital resources requirement for the members in aggregate.

Capital resources below the level of individual capital guidance

SUP App 2.16.6

See Notes

handbook-guidance
For the purposes of SUP App 2.7.1 G to SUP App 2.7.5 G, capital resources will have fallen below the level of individual capital guidance if the Society's own capital resources have fallen below the level advised in individual capital guidance given to the Society in respect of those capital resources.