Friendly Society - Overall Resources and Guarantee Fund Calculating the Guarantee Fund

Application provision

1.1 Unless otherwise stated, this Part applies to a non-directive friendly society.

5.1

01/01/2016

The guarantee fund is an amount equal to the greater of:

  1. (1) one-third of the required margin of solvency; and
  2. (2) the minimum guarantee fund.

5.2

01/01/2016

In the case of long-term insurance business, a firm must maintain a margin of solvency (excluding implicit items), that are sufficient to cover the greater of:

  1. (1) the minimum guarantee fund; and
  2. (2) 50% of the guarantee fund.

5.3

01/01/2016

In the case of general insurance business, the unpaid initial fund of a firm and, in the case of a firm with variable contributions, any claim which the firm has against its members by way of a call for supplementary contributions for a financial year may not be taken into account in complying with 4.2.

5.4

01/01/2016

In the case of long-term insurance business, the unpaid initial fund of a firm and implicit items which relate to future profits and zillmerising may not be taken into account in complying with 4.2.