Application provision

1.1 Unless otherwise stated, this Part applies to:



In accordance with 3.2, a scheme of operations must:

  1. (1) describe the firm's run-off strategy;
  2. (2) include a description of the business underwritten by the firm;
  3. (3) include financial projections (including appropriate scenarios and stress-tests) as follows:
    1. (a) a forecast summary profit and loss account in accordance with 3.3;
    2. (b) a forecast summary balance sheet in accordance with 3.4; and
    3. (c) forecast MCR and SCR at the end of each financial year or part financial year;
  4. (4) as at the end of each financial year which falls (in whole or part) within the period to which the scheme of operations relates:
    1. (a) describe the assumptions which underlie those forecasts and the reasons for adopting those assumptions; and
    2. (b) identify any material transactions proposed to be entered into or carried out with, or in respect of, any associate or any other person with whom the firm has close links; and
  5. (5) cover the run-off period until all liabilities to policyholders are met.



The information required by 3.1 must:

  1. (1) reflect the nature and content of the rules relating to eligible own funds applicable to a firm;
  2. (2) where a firm carries on both long-term insurance business and general insurance business, be separated for long-term insurance business and general insurance business; and
  3. (3) in the case of third country branch undertakings, take account only of matters relevant to the operations effected by the third country branch.



The forecast summary profit and loss account referred to in 3.1(3)(a) must contain the following information:

  1. (1) premiums and claims (gross and net of reinsurance) analysed by accounting class of insurance business;
  2. (2) investment return;
  3. (3) expenses;
  4. (4) other charges and income;
  5. (5) taxation; and
  6. (6) dividends paid and accrued.



The forecast summary balance sheet referred to in 3.1(3)(b) must contain the following information:

  1. (1) investments analysed by type;
  2. (2) assets held to cover linked long-term liabilities;
  3. (3) other assets and liabilities separately identifying cash at bank and in hand;
  4. (4) capital and reserves analysed into called up share capital or equivalent funds, share premium account, revaluation reserve, other reserves and profit and loss account;
  5. (5) subordinated liabilities;
  6. (6) the fund for future appropriations;
  7. (7) technical provisions gross and net of reinsurance analysed by accounting class of insurance business and separately identifying the provision for linked long-term liabilities, unearned premiums, unexpired risks and equalisation; and
  8. (8) other liabilities and credits.