Insurance Company - Internal Contagion Risk Separately Identify and Maintain Long-Term Insurance Assets
Application provision
1.1 Unless otherwise stated, this Part applies to a non-directive insurer, other than a non-directive friendly society.
4.1
01/01/2016
A firm carrying on long-term insurance business must identify the assets relating to its long-term insurance business which it is required to hold by virtue of:
- (1) in the case of a pure reinsurer:
- (a) Insurance Company - Technical Provisions 4.1 or 4.2; and
- (b) Insurance Company - Risk Management 5.1; and
- (2) in any other case:
- (a) Insurance Company - Technical Provisions 4.1 or 4.2; and
- (b) Insurance Company - Risk Management 4.2 and 4.3.
4.2
01/01/2016
- (1) A firm's long-term insurance assets are the items in (2), adjusted to take account of:
- (a) outgoings in respect of the firm's long-term insurance business; and
- (b) any transfers made in accordance with 4.5.
- (2) The items referred to in (1) are:
- (a) the assets identified under 4.1 (including assets into which those assets have been converted) but excluding any assets identified as being held to cover liabilities in respect of subordinated debt;
- (b) any other assets identified by the firm as being available to cover its long-term insurance liabilities (including assets into which those assets have been converted) including, if the firm so elects, assets which are excluded under (a);
- (c) premiums and other receivables in respect of contracts of long-term insurance;
- (d) other receipts of the long-term insurance business; and
- (e) all income and capital receipts in respect of the items in (a) to (d).
4.3
01/01/2016
- (1) Unless (2) applies, all the long-term insurance assets of the firm constitute its long-term insurance fund.
- (2) Where a firm identifies particular long-term insurance assets in connection with different parts of its long-term insurance business, the assets identified in relation to each such part constitute separate long-term insurance funds of the firm.
4.4
01/01/2016
A firm must maintain a separate accounting record in respect of each of its long-term insurance funds.
4.5
01/01/2016
A firm may not transfer assets out of a long-term insurance fund unless:
- (1) the assets represent an established surplus; and
- (2) no more than three months have passed since the determination of that surplus.