Application provision

1.1 Unless otherwise stated, this Part applies to:

  1. (1) a UK Solvency II firm;
  2. (2) in accordance with Insurance General Application 3, the Society, as modified by 16; and
  3. (3) in accordance with Insurance General Application 3, managing agents, as modified by 16.



The changes to this rule are effective from 23:00 on 31/12/2020.

  1. (1) Firms must calculate amounts recoverable from reinsurance contracts and UK ISPVs in accordance with 2 to 10.
  2. (2) For the purposes of (1), firms must take into account the time difference between amounts becoming recoverable and the actual receipt of those amounts.
  3. (3) Firms must adjust the calculation referred to in (1) to take into account expected losses due to the default of the counterparty. That adjustment must be based on an assessment of the probability of default of the counterparty and the average loss that would result from that default (loss-given- default).

Additional Notes

[Note: Art. 81 of the Solvency II Directive]