Source: https://www.readkong.com/page/draft-insurance-regulations-2018-9613706
Timestamp: 2019-06-18 18:44:50
Document Index: 40221144

Matched Legal Cases: ['art 1', 'art 1', 'art.\n19', 'art 1', 'art 2', 'art 3', 'art 4']

Insurance Regulations 2018 Index c V01 Page 1 c INSURANCE REGULATIONS 2018 Index Regulation Page PART I 5 GENERAL 5 1 Title . . 5 2 Commencement . . 5 3 Interpretation . . 5 4 Definition of long-term business . . 7 5 Modification of Companies Act 1982 . . 7 6 Statutory reserve . . 8 7 Restriction on issue or transfer of shares . . 9 8 Continuation and discontinuation of certain insurers . . 9 9 Registers . . 9 10 Exempted insurance business . . 10 11 Indemnity insurance for the auditors of authorised insurers . . 11 PART II 11 PERMIT HOLDERS 11 12 Application of these Regulations to permit holders . . 11 13 Application of Act to permit holders . . 12 PART III 12 REPORTING REQUIREMENTS FOR LONG-TERM BUSINESS 12 14 Reporting requirements for insurers authorised to carry on long-term business . . 12 PART IV 14 REPORTING REQUIREMENTS FOR NON LONG-TERM BUSINESS 14 15 Supplementary information – non long-term business . . 14 16 Regulatory financial statements – non long-term business . . 14 17 Regulatory revenue accounts – non long-term business . . 15 18 Regulatory profit and loss account – non long-term business . . 15 19 Regulatory balance sheet(s) – non long-term insurance business . . 15
Index Insurance Regulations 2018 Page 2 V01 c 20 Reconciliation of shareholder funds – non long-term business . 16 21 Solvency margins – non long-term business . 16 22 Transitional loans . 16 PART V 17 REVOCATIONS 17 23 Revocation . 17 SCHEDULE 1 19 PART I - APPLICATION FORM FOR CONSENT FOR AN OFFSHORE INSURER TO BE CONTINUED AS A COMPANY IN THE ISLAND 19 PART II - SUPPLEMENTARY DOCUMENTS AND INFORMATION TO ACCOMPANY APPLICATIONS 25 PART III – MEMORANDUM OF CONTINUANCE OF AN OFFSHORE INSURER 27 PART IV – CERTIFICATE OF REGISTRATION OF MEMORANDUM OF CONTINUANCE 40 PART V –APPLICATION FOR CONSENT BY AN ISLE OF MAN INSURANCE COMPANY TO BE CONTINUED IN A COUNTRY OR TERRITORY OUTSIDE THE ISLAND 41 PART VI – CERTIFICATE OF DISCONTINUANCE 43 SCHEDULE 2 44 REGISTER OF AUTHORISED INSURERS 44 SCHEDULE 3 45 REGISTER OF HOLDERS OF PERMITS 45 SCHEDULE 4 46 REGISTER OF INSURANCE MANAGERS 46 SCHEDULE 5 47 PART I - LONG-TERM BUSINESS SUPPLEMENTARY DATA – INSURANCE OBLIGATIONS 47 PART II - DIRECTORS’ CERTIFICATE (LONG-TERM INSURERS) 49 PART III - AUDITOR’S REPORT (LONG-TERM INSURERS) 50 SCHEDULE 6 51 PART I - SUPPLEMENTARY INFORMATION (NON LONG-TERM INSURANCE) 51
Insurance Regulations 2018 Index c V01 Page 3 PART II - DIRECTORS’ CERTIFICATE (NON LONG-TERM INSURERS) 53 PART III - AUDITOR’S REPORT (NON LONG-TERM INSURERS) 54 SCHEDULE 7 55 REGULATORY GENERAL BUSINESS REVENUE ACCOUNT (NON LONG- TERM INSURANCE) 55 SCHEDULE 8 56 PART I - REGULATORY PROFIT AND LOSS ACCOUNT (NON LONG-TERM INSURANCE) 56 PART II - STATEMENT OF RESERVES (NON LONG-TERM INSURANCE) 58 PART III - REGULATORY INCOME AND EXPENDITURE ACCOUNT 59 SCHEDULE 9 60 PART I - REGULATORY BALANCE SHEET (NON LONG-TERM INSURANCE) 60 PART II - REGULATORY BALANCE SHEET 62 SCHEDULE 10 64 RECONCILIATION OF SHAREHOLDER FUNDS (NON LONG-TERM INSURANCE) 64 SCHEDULE 11 65 PART I - SOLVENCY MARGINS – NON LONG-TERM BUSINESS 65 PART II - ADMISSIBILITY OF ASSETS 66 PART III - CALCULATION OF SOLVENCY MARGIN 73
Insurance Regulations 2018 Regulation 1 c V01 Page 5 Statutory Document No. 20XX/XXXX c Insurance Act 2018 INSURANCE REGULATIONS 2018 Laid before Tynwald: Coming into Operation: 30 June 2018 The Isle of Man Financial Services Authority makes the following Regulations under section 50 of the Insurance Act 2018, after carrying out the consultation required by section 50(3) of that Act. PART I GENERAL 1 Title These Regulations are the Insurance Regulations 2018 2 Commencement These Regulations come into operation on 30 June 2018. 3 Interpretation (1) In these Regulations — “audited accounts” means the audited annual accounts required to be produced to the Authority under section 14(3) of the Act; “the Act” means the Insurance Act 2008 and a reference to a section (without more) is a reference to a section of that Act; “non long-term business” means insurance business within classes 3 to 9, 11 and 12 (other than restricted long-term business); “minimum capital requirement” has the meaning given in section 12(1)(a) of the Act and as referred to in the Insurance (Long-Term Business Valuation and Solvency) Regulations 2018; and “solvency capital requirement” has the meaning given in section 12(1)(b) of the Act and as referred to in the Insurance (Long-Term Business Valuation and Solvency) Regulations 2018.
Regulation 3 Insurance Regulations 2018 Page 6 V01 c (2) Any reference to a category or a numbered class of insurance business shall be construed by reference to the following table — Category Class number Description Long-term business 1 Linked long-term 2 Long-term, but excluding contracts within classes 1 and 9 General business 3 Marine, aviation and transport 4 Property, but excluding contracts within classes 3 and 5 5 Motor 6 Pecuniary loss 7 Liability, other than contracts within classes 3 or 5 8 Credit and suretyship 9 Personal miscellaneous, including accident, health and disability Reinsurance 10 Reinsurance of contracts within classes 1 and 2 11 Reinsurance of contracts within classes 3 to 9 Restricted 12 Contracts which — (a) are within classes 1 to 11 and are with — (i) related companies; or (ii) members of a common industry or association; or (b) are within class 10 or 11 and are with bodies corporate where the original insured is a body corporate which is a related company.
(3) In paragraph (2), “linked long-term” means contracts of insurance on human life, capital redemption contracts or contracts to pay annuities on human life where the benefits are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contracts) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified).
Insurance Regulations 2018 Regulation 4 c V01 Page 7 (4) In paragraph (2), insurance business which is within any of classes 1 to 9 shall include reinsurance contracts within that class. 4 Definition of long-term business (1) For the purposes of the Act and of these Regulations, “long-term business” means, subject to paragraphs (2) to (4), the effecting or carrying out of contracts of insurance of the following descriptions, namely life, annuity, marriage, birth, linked long-term, permanent health, tontines and capital redemption being contracts that are expressed to be in effect for a period of not less than 5 years or without limit of time, and either not expressed to be terminable by the insurer before the expiration of 5 years from the taking effect thereof or are expressed to be so terminable before the expiration of that period only in special circumstances therein mentioned.
(2) Where the principal object of a contract of insurance is long-term business, but that contract contains related or subsidiary insurance provisions which are not long-term business, the effecting and carrying out of that contract shall be treated as long-term business. (3) All contracts of a description that would fall within the definition of long- term business but for the term being less than 5 years shall be treated as falling within that definition if the insurer concerned gives written notice to the Authority that it intends to treat all contracts within that description as long-term business.
(4) Paragraph (3) shall not apply to any contract of insurance which was effected before the date on which notice was received by the Authority. 5 Modification of Companies Act 1982 In its application to an authorised insurer, Part I of Schedule 1 to the Companies Act 1982 shall have effect subject to the following — (a) an authorised insurer shall be exempt from the provisions of that Part to the extent that the insurer may, subject to sub-paragraph (b), include reserves in general business insurance provisions and in technical provisions for long-term business without the disclosure of the amount of such reserves; (b) where reserves are included in general business insurance provisions or in technical provisions for long-term business under sub-paragraph (a), any heading stating an amount arrived at after taking into account such reserves shall be so framed or marked as to indicate that fact; (c) the accounts of an authorised insurer shall not be deemed, by reason only of the fact that they do not comply with the
Regulation 6 Insurance Regulations 2018 Page 8 V01 c requirements of Part 1 of Schedule 1 to the 1982 Act from which the insurer is exempt by virtue of sub-paragraph (a), not to give the true and fair view by that Act. 6 Statutory reserve (1) An insurer authorised to carry on non long-term business which has any reserve which was set aside under this regulation as it had effect immediately before 31 December 1996 (in this regulation referred to as a “statutory reserve”) shall not make the reserve available for distribution except as permitted by paragraph (4).
(2) An insurer authorised to carry on long-term business which has any reserve which was set aside under this regulation as it had effect immediately before 31 December 1996 (in this regulation referred to as a “statutory reserve”) shall not make the reserve available for distribution except where written consent has been given by the Authority. (3) Where the amount of any claim arising against an insurer authorised to carry on non long-term business exceeds (after taking into account any amount payable to the insurer in respect of that claim under a contract of reinsurance) 25 per cent of the adjusted net assets of the insurer for the financial year prior to the date on which the claim arises, the amount of the claim in excess of that percentage shall be charged to the statutory reserve in priority to revenue.
(4) If the exposure ratio does not exceed 100%, the statutory reserve of an insurer authorised to carry on non long-term business shall be available for distribution with the consent in writing of the Authority, but such distribution shall not be of such an amount as to cause the margin of solvency of the insurer to fall below that required under section 12 of the Act. (5) This regulation shall not — (a) apply to an authorised insurer which is a mutual association; (b) prevent an authorised insurer from setting aside in any year, underwriting reserves in addition to the statutory reserve for the purpose of being used to prevent exceptional fluctuations in the amounts subsequently charged to revenue in respect of claims arising due to the occurrence of events of an exceptional nature. (6) In this regulation — “adjusted net assets” means the regulatory net assets as shown by the regulatory balance sheet prepared in accordance with regulation 16(2)(c) as adjusted for the purposes of the calculation of the solvency margin; “claim” means all claims arising from one event whether under the same contract of insurance or not;
Insurance Regulations 2018 Regulation 7 c V01 Page 9 “distribution” means every description of distribution of an authorised insurer’s assets to its members, whether in cash or otherwise, except a distribution to members of the insurer on its winding up; “exposure ratio” means the maximum net retention of an authorised insurer expressed as a percentage of the adjusted net assets; “net retention” means the maximum liability of an authorised insurer in respect of any claim arising under any one contract of insurance after taking into account any amount recoverable from reinsurers; “relevant period” means, as the case may be — (a) the period between incorporation of the insurer and its first annual general meeting; or (b) the period between successive annual general meetings of the insurer; and “statutory reserve” has the meaning given by paragraphs (1) and (2). 7 Restriction on issue or transfer of shares (1) No shares in an authorised insurer or any interest in such shares shall be transferred to or issued to the trustees of a discretionary trust. (2) Any person who causes or permits a transfer or issue of shares or an interest in shares in contravention of paragraph (1) shall be guilty of an offence.
8 Continuation and discontinuation of certain insurers (1) An application for consent by an offshore insurer to be continued in the Island as a company under the Companies (Transfer of Domicile) Act 1998, as amended by Schedule 4 to the Act (“the 1998 Act”) shall be in the form set out in Part 1 of Schedule 1 and shall be accompanied by the documents and information specified in Part II of that Schedule. (2) The memorandum of continuance of an offshore insurer under the 1998 Act shall be in one of the forms set out in Part III of Schedule 1. (3) The certificate of registration of the memorandum of continuance under the 1998 Act shall be in the form set out in Part IV of Schedule 1. (4) An application for consent by an Isle of Man insurance company to be continued in a country of territory outside the Island under the 1998 Act shall be in the form set out in Part V of Schedule 1. (5) The certificate of discontinuance under the 1998 Act shall be in the form set out in Part VI of Schedule 1.
9 Registers (1) The register of authorised insurers required to be kept under section 48 of the Act must contain the particulars specified in Schedule 2.
Regulation 10 Insurance Regulations 2018 Page 10 V01 c (2) The register of the holders of permits required to be kept under section 48 of the Act must contain the particulars specified in Schedule 3. (3) The register of insurance managers required to be kept under section 48 of the Act must contain the particulars specified in Schedule 4. (4) The register of formerly regulated entities required to be kept under section 48 of the Act must — (a) contain the same particulars as specified in — (i) Schedule 2 for formerly authorised insurers; (ii) Schedule 3 for formerly permitted insurers; and (iii) Schedule 4 for formerly registered insurance managers; as at the date the authorisation or permit was withdrawn or surrendered, or the date the registration was cancelled, as the case may be; and (b) include the date the authorisation or permit was withdrawn or surrendered, or the date the registration was cancelled. 10 Exempted insurance business (1) Section 5 of the Act shall not apply to — (a) a body registered as a friendly society (but not as a branch of a society) under an enactment having effect in the Island or any part of the United Kingdom in respect of any business which it carries on for or in connection with any of the services for which friendly societies may provide under that or other enactments relating to friendly societies; (b) a Trade Union or Employers’ Association where the insurance business carried on by it is limited to the provision for its members in the Island of provident benefits or strike benefits; (c) a person licensed under section 7 of the Financial Services Act 2008 which permits it to undertake Class 1 regulated activities under the Regulated Activities Order 2011 (deposit taking), in respect of insurance business within class 6 or 8 and carried on solely in the course of, or for the purposes of, carrying on Class 1 regulated activities; (d) an insurer that — (i) is authorised to carry on an insurance business in the United Kingdom or any Member State of the European Union; and (ii) does not have a fixed place of business (other than an agency) in the Island; subject to the conditions specified in paragraph (2)
Insurance Regulations 2018 Regulation 11 c V01 Page 11 (e) a person who is a member of the Society incorporated by the Lloyd’s Act 1871 (an Act of Parliament) in respect of insurance business carried on as such a member. (2) The conditions referred to in sub-paragraph (1)(d) are that — (a) the insurer informs the Authority of its name, address and details of its regulatory authorisation, which will be held on a register of exempt persons until the insurer informs the Authority that it is no longer availing itself of the exemption; and (b) the insurer informs the Authority of the expected level and type of business to be undertaken on the Island; and (c) annually on the date of first entry in the register mentioned in (a), informs the Authority of the level and type of business undertaken on the Island during the previous year.
11 Indemnity insurance for the auditors of authorised insurers No person shall be appointed as auditor to an authorised insurer unless the person appointed has effected professional indemnity insurance for an amount of not less than ten million pounds. PART II PERMIT HOLDERS 12 Application of these Regulations to permit holders (1) Subject to paragraphs (2) and (4) regulations 1, 2, 3, 4 ,11 and 14 apply to all permit holders who are authorised to carry on long-term business as they apply to authorised insurers.
(2) A person who holds a permit and who is authorised to carry on long-term business does not need to comply with regulation 14 if — (a) that person is authorised to carry on insurance business in or from its home jurisdiction; and (b) at the same time as any financial statements and reports are submitted to the competent authority in its home jurisdiction, that person submits the same financial statement and reports to the Authority; and (c) at the same time as any solvency calculation is submitted to the competent authority in its home jurisdiction, that person submits to the Authority a solvency calculation in respect of its activities in or from the Island in accordance with the laws of the home jurisdiction.
Regulation 13 Insurance Regulations 2018 Page 12 V01 c (3) Subject to paragraph (4) regulations 1, 2, 3, 4, 11 and 15 to 21 apply to all permit holders who are authorised to carry on non long-term business as they apply to authorised insurers. (4) Paragraphs (1), (2) and (3) shall not have effect in relation to a person who holds a permit and who is authorised to carry on an insurance business in the United Kingdom or in a member state of the European Union. (5) In this regulation “home jurisdiction” means a jurisdiction acceptable to the Authority.
13 Application of Act to permit holders (1) Subject to paragraphs (2) to (4) sections 12, 14(2), 14(3), 14(4), 14(5), 15, 18, 21 and 29 of the Act shall have effect, with the necessary modifications, in relation to persons who hold permits, as they have effect in relation to authorised insurers. (2) Where a permit holder is carrying on long-term business in its home jurisdiction, for the purpose of section 12 of the Act the permit holder shall maintain a margin of solvency in accordance with the laws of the home jurisdiction.
(3) Section 29 shall have effect in relation to persons who hold permits only in respect of — (a) a controller of the permit holder; (b) the most senior executive in the Isle of Man responsible for the permit holder; and (c) any head office personnel who have direct responsibility for, or who will be overseeing the work of, the permit holder. (4) Except in relation to section 21 of the Act, paragraph (1) shall not have effect in relation to a person that holds a permit and who is authorised to carry on an insurance business in the United Kingdom or in a Member State of the European Union.
(5) In this regulation “home jurisdiction” means a jurisdiction acceptable to the Authority. PART III REPORTING REQUIREMENTS FOR LONG-TERM BUSINESS 14 Reporting requirements for insurers authorised to carry on long-term business (1) Pursuant to section 14(4) of the Act, an insurer authorised to carry on long- term business must submit to the Authority the following regulatory
Insurance Regulations 2018 Regulation 14 c V01 Page 13 electronic returns (“RER”) in the form published by the Authority and including such content as is specified in those returns — (a) “RER LT1 SCR”, comprising the following forms — (i) “Forms 1-5_” which separates the information in (1)(a)(ii) by the lines of business; (ii) “Form 6_Total_” which collates the economic balance sheet, solvency capital requirement and minimum capital requirement valuation results for the insurer. (b) “RER LT2 Supplementary” comprising “Supplementary – Form 1_” which for the reporting period includes — (i) the change in the excess of assets over liabilities for various components of an insurer’s solvency capital requirement; (ii) the total and any ring fenced cash flows in respect of insurance business written, including premium income, investment income, unrealised and realised gains, claims incurred and expenses incurred; (iii) the summary of an insurer’s investments by type; and (iv) a three year projection of cash flows under the headings reported under (ii); and (c) such other RERs, and underlying forms, as may be published by the Authority from time to time.
(2) Pursuant to section 14(4) of the Act, an authorised insurer carrying on long-term business must submit to the Authority the following supplementary information — (a) the supplementary information regarding the insurer’s insurance obligations, set out in Part I of Schedule 5; (b) a certificate in the form set out in Part II of Schedule 5 which must be signed by two of the authorised insurer’s directors, at least one of whom must be resident in the Island; (c) an auditor's report in the form set out in Part III of Schedule 5 which must be signed by the insurer's auditors; and (d) a copy of the actuarial report as required by regulation 7 of the Insurance (Long-Term Business Valuation and Solvency) Regulations 2018.
(3) The information required under paragraphs (1) and (2) must be submitted to the Authority on an annual basis at the same time as the audited accounts of the insurer are submitted. (4) The information required under sub-paragraphs (1)(a) and (1)(b)(ii) and (iii) must be submitted to the Authority also on a quarterly basis within three months of each quarter end.
Regulation 15 Insurance Regulations 2018 Page 14 V01 c PART IV REPORTING REQUIREMENTS FOR NON LONG-TERM BUSINESS 15 Supplementary information – non long-term business (1) Pursuant to section 14(4) of the Act, the statements, reports, certificates and information set out in paragraphs (2) to (5) (where applicable) must be produced by an insurer authorised to carry on non long-term business to the Authority at the same time as the audited accounts of the insurer are submitted. (2) Regulatory financial statements prepared in accordance with regulation 16 in respect of each financial year for which audited accounts are prepared.
(3) To the extent that the information is not separately identified in the audited accounts or regulatory financial statements, the information set out in Part I of Schedule 6 in respect of each financial year for which audited accounts are prepared. (4) A certificate in the form set out in Part II of Schedule 6 must be attached to the information referred to in paragraph (3) and must be signed by two of the authorised insurer’s directors, at least one of whom must be resident in the Island. (5) An auditor's report on the supplementary information and directors' certificate must be given by the insurer's auditors in the form set out in Part III of Schedule 6.
16 Regulatory financial statements – non long-term business (1) For the purposes of preparing the regulatory financial statements, contracts of insurance within the meaning of the Act which are not insurance contracts for the purposes of the Generally Accepted Accounting Principles adopted by the insurer in question for the preparation of its annual accounts, are deemed to be insurance contracts and must be accounted for accordingly. (2) Subject to paragraph (3), the regulatory financial statements must consist of a — (a) regulatory revenue account(s) prepared under regulation 17; (b) regulatory profit and loss account or regulatory income and expenditure account prepared under regulation 18; (c) relevant regulatory balance sheet prepared under regulation 19; and (d) reconciliation of shareholder funds prepared under regulation 20.
Insurance Regulations 2018 Regulation 17 c V01 Page 15 (3) Pursuant to paragraph (2), where the audited accounts reflect transactions or balances of contracts of insurance within the meaning of the Act where all of those contracts of insurance are insurance contracts for the purposes of Generally Accepted Accounting Principles then the authorised insurer may, subject to paragraph (4), elect not to prepare regulatory financial statements in accordance with paragraphs (2)(a) – (c). Otherwise paragraph (2) applies.
(4) The Authority may, where it considers it appropriate to do so, require an insurer authorised to carry on non long-term business to prepare regulatory financial statements in accordance with paragraph (2). (5) Where an authorised insurer elects under paragraph (3) not to prepare regulatory financial statements then the notes to the audited accounts must include a statement to that effect including the reasons for the election. 17 Regulatory revenue accounts – non long-term business (1) Where an insurer authorised to carry on non long-term business prepares regulatory revenue account(s) in accordance with regulation 16(2)(a) the regulatory revenue account must comply with the provisions of this regulation.
(2) The regulatory revenue account must be in the form set out in Schedule 7 and must comply with the requirements of that Schedule. 18 Regulatory profit and loss account – non long-term business (1) Where an insurer authorised to carry on non long-term business prepares a regulatory profit and loss account or regulatory income and expenditure account in accordance with regulation 16(2)(b) the regulatory profit and loss account must comply with the provisions of this regulation. (2) The regulatory profit and loss account prepared by an insurer authorised to carry on non long-term business must be in the form set out in Part I of Schedule 8 and must comply with the requirements of that Part. (3) An insurer authorised to carry on non long-term business must prepare a statement of reserves in the form set out in Part II of Schedule 8 and must annex such statement to the regulatory profit and loss account. (4) A regulatory income and expenditure account prepared by an insurer authorised to carry on non long-term business and which is not trading for profit must be in the form set out in Part III of Schedule 8 and must comply with the requirements of that Part.
19 Regulatory balance sheet(s) – non long-term insurance business (1) Where an insurer authorised to carry on non long-term business prepares a regulatory balance sheet(s) in accordance with regulation 16(2)(c) the
Regulation 20 Insurance Regulations 2018 Page 16 V01 c regulatory balance sheet(s) must comply with the provisions of this regulation. (2) The regulatory balance sheet prepared by an authorised insurer carrying on non long-term business must be in the form set out in Part I of Schedule 9 or, in the case of an insurer not carrying on business for profit, in the form set out in Part II of that Schedule and must comply with the requirements of the relevant Part. (3) The regulatory balance sheet must be signed on behalf of the board by two of the directors of the authorised insurer.
20 Reconciliation of shareholder funds – non long-term business (1) The reconciliation of shareholder funds prepared by an insurer authorised to carry on non long-term business in accordance with regulation 16(2)(d) must be in the form set out in Schedule 10. (2) Where an insurer authorised to carry on non long-term business elects under regulation 16(3) not to apply regulation 16(2)(a) to (c) then the reconciliation of shareholder funds must include a statement to that effect including the regulation under which the election was made and the reasons for the election.
21 Solvency margins – non long-term business (1) The margin of solvency to be maintained by an authorised insurer carrying on non long-term business shall be that specified in Part I of Schedule 11. (2) Part II of Schedule 11 shall have effect for the purpose of determining the extent to which particular assets may be taken into account. (3) Calculation of the solvency margin shall be in the manner specified in Part III of Schedule 11. 22 Transitional loans (1) This regulation applies for an existing loan approval for an insurer authorised to carry on non long-term business if, on 30 June 2012, the relevant insurer did not comply with the relevant criteria. Note: The new loan provisions were implemented by the Insurance (Solvency)(Amendment) Regulations 20121 on 30 June 2012. (2) Subject to paragraphs (3) to (5), the following apply despite the noncompliance — (a) the approval continues in force for, and is fully admissible under, the new loan provisions; 1 SD 0294/12
Insurance Regulations 2018 Regulation 23 c V01 Page 17 (b) the approval may be amended, renewed or revoked under the old loan provisions; and (c) the amendment, renewal or revocation has effect for the new loan provisions. (3) If, at any time after 30 June 2012, the approval does comply with the amended criteria, paragraph (2) ceases to apply and the new loan provisions apply for the insurer. (4) The continuation of the approval is subject to all of its conditions in force immediately before 30 June 2012. (5) The Authority may, at any time, amend or revoke any of the conditions in a way that is consistent with the new loan provisions. (6) In this regulation— “amended criteria” means the criteria under paragraph 13 of Part II of Schedule 11; “existing loan approval”, for an insurer authorised to carry on non long- term business, means approval (in whatever form) under the old loan provisions, in force immediately before 30 June 2012; “new loan provisions” means entry C to the table in paragraph 12 of Part II of Schedule 11; and “old loan provisions” means entry D to the table in paragraph 12 of Part II of Schedule 11.
PART V REVOCATIONS 23 Revocation The following Regulations are revoked— (a) the Insurance Regulations 19862; (b) the Insurance (Supplementary Information) Regulations 20163; (c) regulation 3 of the Insurance (Solvency) (Amendment) Regulations 20114; and (d) regulation 3 of the Insurance (Solvency) (Amendment) Regulations 2012. 2 GC 319/86 3 SD 206/0107 4 SD 0918/11
Regulation 23 Insurance Regulations 2018 Page 18 V01 c MADE K. BADGEROW Chief Executive G.F. KARRAN Chairman, Isle of Man Financial Services Authority
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 19 SCHEDULE 1 PART I - APPLICATION FORM FOR CONSENT FOR AN OFFSHORE INSURER TO BE CONTINUED AS A COMPANY IN THE ISLAND To the Authority _ _ (State name of the company for which a consent is required) On behalf of the above company I apply for the grant of consent to be continued in the Island as a company under the Companies (Transfer of Domicile) Act 1998 as amended by Schedule 4 to the Insurance Act 2008. I declare that the information given in the Appendix hereto is correct to the best of my knowledge and belief.
Date: Signed (State in full the name and address of the Applicant and the capacity in which he makes the application) Note: The Authority may request further information or documents in the course of considering this application.
SCHEDULE 1 Insurance Regulations 2018 Page 20 V01 c APPENDIX 1. (a) Name of offshore insurer to be continued as a company in the Isle of Man (present time). (b) Name to be used by the continued company in the Isle of Man (if different from above). 2. Address of registered office in country or territory of incorporation. 3. Present business address. 4. Address of proposed registered office in the Isle of Man. 5. Proposed business address in the Isle of Man. 6. Date and number of incorporation. 7. Authorised share capital distinguishing between different classes of shares.
8. Issued share capital. 9. Paid up share capital. 10. State the amount, if any, of share premium and the amount paid up. 11. Give details of any letter of credit to be issued in support of the financing requirement upon continuance. 12. State the amount by which the assets of the company exceed its liabilities (including all contingent or proposed liabilities but not those in respect of share capital). 13. State who holds (a) the legal interest and (b) the ultimate beneficial interest in the shares of the company.
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 21 14. State whether the company has a parent, and if so, give the name and country or territory of incorporation of the ultimate holding company and any intermediate holding company. 15. State whether the company has any subsidiary companies, and if so, give names, activities and percentage of their equity. 16. State whether the company has any associated companies, and if so, give (a) names, (b) activities, and (c) the proportion of the nominal value of each class of shares held by the applicant. 17. Date of authorisation to carry on insurance business in country or territory of incorporation. 18. State whether authorisation is sought for class 11 (reinsurance - but only in respect of contracts with associated companies or members of a common industry or association) or class 12 (restricted category) of the classes of insurance business set out in regulation 3(2). 19. State whether any part of the insurance business presently carried on by the company falls outside the class for which authorisation is sought (“the excluded business”) and, if so (a) give full particulars of the excluded business; and (b) state the arrangements for dealing with the excluded business upon continuance.
20. State the present sources of business and the approximate percentage obtained from each source. 21. State any changes in the sources of business and the appropriate percentage expected from each source upon continuance.
SCHEDULE 1 Insurance Regulations 2018 Page 22 V01 c 22. State details of the anticipated net retentions for each class of business for which underwriting authority is sought, during the forthcoming underwriting year. 23. State the nature and extent of the existing or proposed reinsurance arrangements for each class, giving the fullest details of such reinsurance support including details of reinsurers writing 10% or more of any contract. 24. Describe fully the intermediate processes which may occur between the payment of a premium by an original Insured and the receipt of funds by the company. Describe in particular any route involving an underwriting agent. Give the name and address of the underwriting agent.
25. State the date on which the company's financial year (a) ends at present and (b) will end upon continuance. 26. Indicate (a) the manner in which the funds of the company are presently invested (b) any proposed changes in the manner of investing the existing funds of the company upon continuance and (c) the intended areas of investment of future funds. 27. State whether the company (a) has made or (b) proposes making, any loans to its directors, managers, or associated companies, and if so, give particulars.
28. State, in respect of each of (a) the existing directors and the secretary of the company, and (b) any new directors or secretary to be appointed upon continuance, the following particulars – (a) Name (b) Private address
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 23 (c) Nationality (d) Insurance experience (e) Other business experience (f) Professional qualifications In addition state particulars of all previous changes in the name or nationality of each of the directors and secretary. 29. Where the company's activities are managed by another person, give details. 30. Where the company's activities are to be amended by another person upon continuance, give details. 31. State particulars of any association which exists or which is proposed to exist between the directors or controller of the company and any person who acts or will act as an insurance broker, agent, loss adjuster or reinsurer for the company or as an underwriting agent referred to in the information given under 24 above.
32. State the number of staff the company proposes to employ in the Isle of Man in the next three years, and the estimated annual costs thereof. 33. State the name and address of - (a) the company's auditors (b) the company's appointed actuary (if applicable) (c) the company's legal advisers (d) the company's bankers 34. State the name and address of the following to be appointed in respect of the continued company - (a) the company's auditors (b) the company's appointed actuary (if applicable)
SCHEDULE 1 Insurance Regulations 2018 Page 24 V01 c (c) the company's advocates (d) the company's bankers
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 25 PART II - SUPPLEMENTARY DOCUMENTS AND INFORMATION TO ACCOMPANY APPLICATIONS 1. Information on every individual who is or will be, director, controller, chief executive or manager of the applicant in the form required by the Fitness and Propriety Regulatory Guidance published by the Authority on its website. 2. A copy of the existing memorandum and articles of association of the applicant (or the analogous constitutional documents). 3. A copy of the certificate of incorporation of the company. 4. A copy of the present insurance authorisation or licence. 5. A copy of the memorandum of continuance. 6. A copy of the new articles of association to be adopted upon continuance. 7. Particulars of any charges created by the company to which Section 79 of the Companies Act 1931 would apply if the company had been incorporated in the island.
8. Copies of notices given to all persons having an interest in any charge referred to in the information given under 5 above. 9. A copy of the audited financial statements of the company prepared for a period ending within twelve months of the date of the application. 10. A 3 year business plan containing - (a) Projected Regulatory Revenue Account, Regulatory Profit and Loss account and Regulatory Balance Sheet giving details as required in the prescribed formats; (b) in the case of an insurer intending to carry out restricted long term business, an estimate of new business premium volumes and a projected profit profile for each type of product; (c) a cash flow projection; and (d) a statement of the principal assumptions on which the business plan has been prepared.
11. Confirmation by the auditors that they - (a) have accepted, or are prepared to accept, appointment; (b) carry Professional Indemnity insurance for not less than £10 million; and (c) consider the information provided in respect of the Business Plan to have been properly prepared on the basis of the assumptions made by the directors of the company. 12. If the company is to carry on restricted long-term business confirmation by the actuary that he - (a) has accepted, or is prepared to accept, appointment and is qualified to do so; (b) considers the financing of the company to be sufficient to cover both technical reserves and the required margin of solvency during the first three financial years following authorisation; and (c) agrees with the information provided in the Business Plan in so far as it relates to long-term business.
SCHEDULE 1 Insurance Regulations 2018 Page 26 V01 c 13. A copy (or draft) of any inwards reinsurance contract, binding authority or agency agreement that has been (will be) entered into. 14. A copy (or draft) of any agreement with persons (other than employees) who will manage the business of the company. 15. Where the applicant is a subsidiary company, a copy of the accounts of the parent company made up to a date not more than 15 months before the date of the application.
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 27 PART III – MEMORANDUM OF CONTINUANCE OF AN OFFSHORE INSURER FORM ONE A COMPANY LIMITED BY SHARES MEMORANDUM OF CONTINUANCE THE INSURANCE ACT 2008 THE COMPANIES ACT 1931 – 1993 PART A 1. The name of the Company from the date of continuance is: [Limited] 2. The Company is a private/public company. 3. The liability of the members is limited. 4. Restrictions, if any, on the exercise of the rights, powers and privileges of the Company with effect from the date of continuance - or There are no restrictions on the rights, powers and privileges of the Company with effect from the date of continuance.
[delete as appropriate] [Restrictions are limited to those permitted by Section 5(6) of the Companies Act 1986]. 5. The share capital of the Company is [ ] divided into [ ] shares of [ ] each. 6. The Company was incorporated in [ ] on the [ ] day of [ ] as [insert name] with Registered Number [ ] and immediately preceding the date of continuance was registered under the name [ ]. Adopted by Special Resolution of the Company on [ ] The summary of capital and shares; the particulars of the shareholders, directors and secretary; the statement of indebtedness in respect of mortgages and charges; and the intended situation of the Registered Office of the Company are set out in Part B.
Signed on behalf of the Company by: (Director) (Director or Secretary) Dated this day of 20
SCHEDULE 1 Insurance Regulations 2018 Page 28 V01 c MEMORANDUM OF CONTINUANCE – PART B SECTION ONE PARTICULARS OF THE DIRECTORS PARTICULARS TO BE PROVIDED IN RESPECT OF EACH PERSON WHO IS A DIRECTOR Name Business Occupation Former name(s) Nationality (and Nationality of origin if other than present Nationality) Address I hereby consent to act as director of the Continued Company Signature Date Name Business Occupation Former name(s) Nationality (and Nationality of origin if other than present Nationality) Address I hereby consent to act as director of the Continued Company Signature Date
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 29 PARTICULARS OF SECRETARY Name Former name(s) Address I hereby consent to act as Secretary of the Continued Company Signature Date STATEMENT OF INDEBTEDNESS IN RESPECT OF MORTGAGES AND CHARGES Total amount of the indebtedness of the Company in respect of all mortgages and charges of the kind which are required to be registered with the Registrar of Companies [ ] INTENDED SITUATION OF REGISTERED OFFICE The intended situation of the Registered Office of the Company on continuance is as stated below –
SCHEDULE 1 Insurance Regulations 2018 Page 30 V01 c SECTION TWO SUMMARY OF CAPITAL AND SHARES Nominal Share Capital [ ] divided into [ ] Shares of [ ] each Number of shares of each class taken up to the date of this Memorandum Number of shares of each class issued subject to payment wholly in cash Number of shares of each class issued as fully paid up otherwise than in cash Number of shares issued as partly paid up to the extent of per share otherwise than in cash Number of shares (if any) of each class issued at a discount Amount of discount on the issue of shares which has not been written off at the date of this return There has been called up on each of shares £ There has been called up on each of shares £ There has been called up on each of shares £ Total amount of calls received, including payments on application and allotment £ Total amount (if any) agreed to be considered as paid on £ shares which have been issued as fully paid up otherwise than in cash Total amount (if any) agreed to be considered as paid on £ shares which have been issued as partly paid up to the extent of per share otherwise than in cash Total amount of calls unpaid £ Total number of shares of each class forfeited £ Total amount paid (if any) on shares forfeited £ Total amount of shares for which share warrants to bearer are outstanding £
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 31 Number of shares comprised in each share warrant to bearer, specifying in the case of warrants of different kinds, particulars of each kind PARTICULARS OF THE SHAREHOLDERS Name and Address No. of Shares held Type of Shares Denominations NOTE: Section Two is not applicable in the case of a company not having a share capital. NOTES 1. Full names must be given. In the case of an individual, his present first name or names and surname must be given. “first name” includes a forename, and “surname” in the case of a peer or person usually known by a title different from his surname means that title. In the case of a corporation which is a secretary, its corporate name must be given. 2. In the case of an individual, any former first names and surname must be given in addition. The expression “first name” includes a forename.
“Former first name” and “former surname” do not include: (a) in the case of a peer or a person usually known by a British title different from his surname, the name by which he was known previous to the adoption of or succession to the title; or (b) in the case of any person, a former first name or surname where that name or surname was changed or disused before the person bearing the name attained the age of eighteen years or has been changed or disused for a period of not less than 20 years; or (c) in the case of a married woman, the name or surname by which she was known previous to the marriage.
3. Usual residential address must be given or, in the case of a corporation which is a secretary, the registered or principal office. 4. In the case of an individual who has no Business Occupation, but holds any other directorship or directorships, particulars of that directorship or some one of those directorships. 5. Where all the partners in a firm are joint secretaries the name and principal office address of the firm alone may be stated.
SCHEDULE 1 Insurance Regulations 2018 Page 32 V01 c FORM TWO A COMPANY LIMITED BY GUARANTEE AND NOT HAVING A SHARE CAPITAL MEMORANDUM OF CONTINUANCE THE INSURANCE ACT 2008 THE COMPANIES ACTS 1931 - 1993 PART A 1. The name of the Company from the date of continuance is: [Limited] 2. The Company is a private/public company. 3. The liability of the members is limited. 4. Restrictions, if any, on the exercise of the rights, powers and privileges of the Company with effect from the date of continuance or There are no restrictions on the rights, powers and privileges of the Company with effect from the date of continuance [delete as appropriate] [Restrictions are limited to those permitted by Section 5(6) of the Companies Act 1986] 5. Every member of the Company undertakes to contribute such amount as may be required (not exceeding [insert limit of liability]) to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves.
6. The Company was incorporated in [ ] on the [ ] day of [ ] as [insert name] with Registered Number [ ] and immediately preceding the date of continuance was registered under the name [ ]. Adopted by Special Resolution of the Company on [ ] The particulars of the directors and secretary; the statement of indebtedness in respect of mortgages and charges; and the intended situation of the registered office of the Company are as set out in Part B. Signed on behalf of the Company by: (Director) (Director or Secretary) Dated this Day of 20
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 33 MEMORANDUM OF CONTINUANCE – PART B SECTION ONE PARTICULARS OF THE DIRECTORS PARTICULARS TO BE PROVIDED IN RESPECT OF EACH PERSON WHO IS A DIRECTOR Name Business Occupation Former name(s) Nationality (and Nationality of origin if other than present Nationality) Address I hereby consent to act as director of the Continued Company Signature Date Name Business Occupation Former name(s) Nationality (and Nationality of origin if other than present Nationality) Address I hereby consent to act as director of the Continued Company Signature Date
SCHEDULE 1 Insurance Regulations 2018 Page 34 V01 c PARTICULARS OF SECRETARY Name Former name(s) Address I hereby consent to act as Secretary of the Continued Company Signature Date STATEMENT OF INDEBTEDNESS IN RESPECT OF MORTGAGES AND CHARGES Total amount of the indebtedness of the Company in respect of all mortgages and charges of the kind which are required to be registered with the Registrar of Companies [ ] INTENDED SITUATION OF REGISTERED OFFICE The intended situation of the Registered Office of the Company on continuance is as stated below -
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 35 FORM THREE A COMPANY LIMITED BY GUARANTEE AND HAVING A SHARE CAPITAL MEMORANDUM OF CONTINUANCE THE INSURANCE ACT 2008 THE COMPANIES ACTS 1931 - 1993 PART A 1. The name of the Company from the date of continuance is: [Limited] 2. The Company is a private/public company. 3. The liability of the members is limited. 4. Restrictions, if any, on the exercise of the rights, powers and privileges of the Company with effect from the date of continuance or There are no restrictions on the rights, powers and privileges of the Company with effect from the date of continuance [delete as appropriate] [Restrictions are limited to those permitted by Section 5(6) of the Companies Act 1986] 5. Every member of the Company undertakes to contribute such amount as may be required (not exceeding [insert limit of liability]) to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves.
6. The share capital of the Company is [ ] divided into [ ] shares of [ ] each. 7. The Company was incorporated in [ ] on the [ ] day of [ ] as [insert name] with Registered Number [ ] and immediately preceding the date of continuance was registered under the name [ ]. Adopted by Special Resolution of the Company on [ ] The summary of capital and shares, the particulars of the shareholders, directors and secretary; the statement of indebtedness in respect of mortgages and charges; and the intended situations of the Registered Office of the Company are as set out in Part B. Signed on behalf of the Company by: (Director) (Director or Secretary) Dated this Day of 20
SCHEDULE 1 Insurance Regulations 2018 Page 36 V01 c MEMORANDUM OF CONTINUANCE – PART B SECTION ONE PARTICULARS OF THE DIRECTORS PARTICULARS TO BE PROVIDED IN RESPECT OF EACH PERSON WHO IS A DIRECTOR Name Business Occupation Former name(s) Nationality (and Nationality of origin if other than present Nationality) Address I hereby consent to act as director of the Continued Company Signature Date Name Business Occupation Former name(s) Nationality (and Nationality of origin if other than present Nationality) Address I hereby consent to act as director of the Continued Company Signature Date
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 37 PARTICULARS OF SECRETARY Name Former name(s) Address I hereby consent to act as Secretary of the Continued Company Signature Date STATEMENT OF INDEBTEDNESS IN RESPECT OF MORTGAGES AND CHARGES Total amount of the indebtedness of the Company in respect of all mortgages and charges of the kind which are required to be registered with the Registrar of Companies [ ] INTENDED SITUATION OF REGISTERED OFFICE The intended situation of the Registered Office of the Company on continuance is as stated below –
SCHEDULE 1 Insurance Regulations 2018 Page 38 V01 c SECTION TWO SUMMARY OF CAPITAL AND SHARES Nominal Share Capital [ ] divided into [ ] Shares of [ ] each Number of shares of each class taken up to the date of this Memorandum Number of shares of each class issued subject to payment wholly in cash Number of shares of each class issued as fully paid up otherwise than in cash Number of shares issued as partly paid up to the extent of per share otherwise than in cash Number of shares (if any) of each class issued at a discount Amount of discount on the issue of shares which has not been written off at the date of this return There has been called up on each of shares £ There has been called up on each of shares £ There has been called up on each of shares £ Total amount of calls received, including payments on application and allotment £ Total amount (if any) agreed to be considered as paid on £ shares which have been issued as fully paid up otherwise than in cash Total amount (if any) agreed to be considered as paid on £ shares which have been issued as partly paid up to the extent of per share otherwise than in cash Total amount of calls unpaid £ Total number of shares of each class forfeited £ Total amount paid (if any) on shares forfeited £ Total amount of shares for which share warrants to bearer are outstanding £
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 39 Number of shares comprised in each share warrant to bearer, specifying in the case of warrants of different kinds, particulars of each kind PARTICULARS OF THE SHAREHOLDERS Name and Address No. of Shares held Type of Shares Denominations NOTE: Section Two is not applicable in the case of a company not having a share capital. NOTES 1. Full names must be given. In the case of an individual, his present first name or names and surname must be given. “first name” includes a forename, and “surname” in the case of a peer or person usually known by a title different from his surname means that title. In the case of a corporation which is a secretary, its corporate name must be given. 2. In the case of an individual, any former first names and surname must be given in addition. The expression “first name” includes a forename.
“Former first name” and “former surname” do not include: (a) in the case of a peer or a person usually known by a British title different from his surname, the name by which he was known previous to the adoption of or succession to the title; or (b) in the case of any person, a former forename or surname where that name or surname was changed or disused before the person bearing the name attained the age of eighteen years or has been changed or disused for a period of not less than 20 years; or (c) in the case of a married woman, the name or surname by which she was known previous to the marriage.
SCHEDULE 1 Insurance Regulations 2018 Page 40 V01 c PART IV – CERTIFICATE OF REGISTRATION OF MEMORANDUM OF CONTINUANCE CENTRAL REGISTRY ISLE OF MAN Certificate of Registration of Memorandum of Continuance I certify that in accordance with the provisions of the Companies (Transfer of Domicile) Act 1998 as amended by Schedule 4 to the Act I have this day registered the Memorandum of Continuance of and that from this day the company is a company to which the Companies Acts 1931 to 1993 and all other laws of the Island apply This day of 20 Chief Registrar General Registry
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 41 PART V –APPLICATION FOR CONSENT BY AN ISLE OF MAN INSURANCE COMPANY TO BE CONTINUED IN A COUNTRY OR TERRITORY OUTSIDE THE ISLAND To the Authority (State the name of the company for which consent is required) On behalf of the above company I apply for the grant of consent to be continued as a company in a country or territory outside the Island under the Companies (Transfer of Domicile) Act 1998 as amended by Schedule 4 to the Act. I enclose the documents referred to in the Companies (Transfer of Domicile) Act 1998 (“the 1998 Act”) as amended by Schedule 4 to the Act.
I declare that the information given in the Appendix hereto is correct to the best of my knowledge and belief. Date: Signed (State in full the name and address of the applicant and the capacity in which he makes the application) Note: The Authority may request further information or documents in the course of considering this application.
SCHEDULE 1 Insurance Regulations 2018 Page 42 V01 c APPENDIX 1. Name of Company 2. Address of Registered Office 3. Business Address 4. Country or territory in which company is to be continued. 5. State the date from which it is proposed that the company be continued in a country or territory outside the Island. 6. State the class or classes of insurance business for which the Company intends to apply for authorisation in a country or territory outside the Island. 7. State the arrangements made to deal with the company's insurance business obligations arising out of contracts prior to discontinuance.
8. State whether there are to be any changes in the person who holds (a) the legal interest and (b) the ultimate beneficial interest in the shares of the Company upon continuance in a country or territory outside the Island. 9. Name and address of person to be appointed as agent for the company in the Island for the service of process.
Insurance Regulations 2018 SCHEDULE 1 c V01 Page 43 PART VI – CERTIFICATE OF DISCONTINUANCE No. CENTRAL REGISTRY ISLE OF MAN CERTIFICATE OF DISCONTINUANCE I certify that in accordance with the provisions of the Companies (Transfer of Domicile) Act 1998 as amended by Schedule 4 to the Act I have this day filed the Instrument of Continuance of issued by of and that from this day the Company shall cease to be registered as a company under the Companies Acts 1931 to 1993 This day of 20 Chief Registrar General Registry
SCHEDULE 2 Insurance Regulations 2018 Page 44 V01 c SCHEDULE 2 REGISTER OF AUTHORISED INSURERS 1. Name of authorised insurer 2. Address of registered office 3. Place of business in Isle of Man (if different to above) 4. Date of authorisation 5. Categories and classes of insurance for which authorisation is granted 6. Date and details of amendment to register 7. Conditions, if any, attaching to authorisation 8. Name of insurance manager (if appointed) 9. Authorisation number 10. Status
Insurance Regulations 2018 SCHEDULE 3 c V01 Page 45 SCHEDULE 3 REGISTER OF HOLDERS OF PERMITS 1. Name of permit holder 2. Address of registered office 3. Place of business in Isle of Man (if different to above) 4. Country of incorporation 5. Date permit granted 6. Classes of insurance business carried on 7. Date and details of amendment to register 8. Conditions, if any, attaching to permission 9. Name of insurance manager (if appointed) 10. Name of Senior Person on Island 11. Registration number 12. Status
SCHEDULE 4 Insurance Regulations 2018 Page 46 V01 c SCHEDULE 4 REGISTER OF INSURANCE MANAGERS 1. Name of insurance manager 2. Address of registered office 3. Place of business in Isle of Man (if different to above) 4. Name of senior representative resident in IOM 5. Name of insurers managed in or from IOM 6. Name and country of incorporation of each insurer not authorised in IOM but managed in or from IOM 7. Date of registration 8. Date and details of amendment to register 9. Registration number 10. Status
Insurance Regulations 2018 SCHEDULE 5 c V01 Page 47 SCHEDULE 5 PART I - LONG-TERM BUSINESS SUPPLEMENTARY DATA – INSURANCE OBLIGATIONS Pursuant to regulation 14(2), the insurer must provide the following information to the Authority: (1) For each type of contract of insurance business, details of the contract type including — (e) a description of the premiums and benefits under the contract, including any discretionary benefits, and how they are determined; (f) details of the charges including whether or not they may be varied and any restrictions on increases; (g) any options or guarantees; and (h) a description of any other features of the contract not disclosed above which are material to the method and basis of valuation of the insurers technical provisions in accordance with the Insurance (Long-Term Business Solvency) Regulations 2018. (2) The information required by paragraph (1) above need not be provided for types of contract where the technical provisions at the valuation date in respect of the contract type in question represent less than 1% of the total technical provisions unless the insurer considers that the disclosure to the Authority is required.
(3) For each type of contract of insurance business, a breakdown by product at the valuation date of the following information — (a) number of policies; (b) annualised premium payable; (c) benefits currently guaranteed on death; and (d) benefits currently guaranteed at maturity. (4) The information provided in paragraph (3) shall be shown and totalled separately for — (a) direct business and reinsurance accepted; and (b) reinsurance ceded. (5) A detailed description by product of any reinsurance contracts, including finite and financial reinsurance, that are in force at the date of valuation, to include— (a) whether the insurer is the cedant or the reinsurer; (b) the name of the reinsurer (or cedant if appropriate);
SCHEDULE 5 Insurance Regulations 2018 Page 48 V01 c (c) whether the insurer and reinsurer (or cedant if appropriate) are connected; (d) the nature and extent of the cover given under the treaty; (e) the premium payable/receivable in the year preceding the valuation date; (f) claims payable/receivable in the year preceding the valuation date; (g) the amount deposited at the valuation date in respect of the treaty under any deposit back arrangements; (h) details of any commission loan advances (or financing payments having an equivalent effect) and outstanding balances; (i) if the insurer is the cedant, the extent to which provision has been made for any liability of the insurer to refund any amounts of reinsurance commission in the event of lapses or surrenders of the contract; and (j) whether the treaty is open or closed to new business. (6) A description of the method of apportionment used to determine the breakdown of expenses incurred by the insurer in the year preceding the valuation date into the categories set out in the revenue account in Form 3 – AOC, Revenue & Investments in accordance with regulation 14(1)(b).
Insurance Regulations 2018 SCHEDULE 5 c V01 Page 49 PART II - DIRECTORS’ CERTIFICATE (LONG-TERM INSURERS) (1) We confirm that the Company has complied with the requirements of the Insurance Act 2008, the Insurance Regulations 2018 and the Insurance (Long-Term Business Solvency) Regulations 2018 during the financial year ended on ( date ). (2) Subject to permitted estimations and approximations, we certify the accuracy of the information contained in the regulatory electronic returns required by regulation 14(1).
(3) Subject to permitted estimations and approximations, we certify the accuracy of the information contained in the most recent own risk and solvency assessment report dated [date report made up to] as submitted on [submission date]. (4) We certify that as at the accounting period end date no charge had been made on the assets of the Company to secure the liabilities of any other person (except as stated in notes to the audited accounts*) and there has been no charge since that date. (5) We certify that there was no material change in the share ownership or share structure of the Company during the period of account (apart from the change notified to the Isle of Man Financial Services Authority in writing on [insert date(s)]*).
Director Director Date * Delete or include as appropriate
SCHEDULE 5 Insurance Regulations 2018 Page 50 V01 c PART III - AUDITOR’S REPORT (LONG-TERM INSURERS) To the Authority We have examined the information furnished pursuant to regulation 14(1) of the Insurance Regulations 2018. In our opinion and according to the information and explanations we have received: (1) all of the information prescribed in regulation 14(1)(a) and 14(1)(b)(ii) and (iii) of those Regulations as is relevant to the business carried on by the company has been properly prepared; and (2) it was reasonable for the directors giving the certificate under regulation 14(2)(b) of those Regulations to have made the statements thereon contained in paragraphs 2, 3 and 4.
Date Signed Qualification
Insurance Regulations 2018 SCHEDULE 6 c V01 Page 51 SCHEDULE 6 PART I - SUPPLEMENTARY INFORMATION (NON LONG-TERM INSURANCE) The information required to be submitted by regulation 15(3) is as follows – (1) an analysis of the regulatory general business revenue account or fund account (if not separately identified in regulatory financial statements) between – (a) marine, aviation and transport (class 3); (b) motor (class 5); (c) liability (class 7); and (d) other classes; (2) a schedule of maximum retentions, net of reinsurance, any one risk or event for each and every class of business, based on – (a) policy limits; (b) estimated maximum loss (if applicable); (3) a summary of reinsurance business ceded or retroceded, stating for each class of insurance and/or contract the – (a) type of reinsurance cover; (b) threshold and limit any one risk/any one event and in aggregate; (c) basis of premium payable and commission receivable; and (d) names of reinsurers writing individually (or together with associated companies) 10% or more of any treaty or more than 5% of the total amount of premiums ceded; (4) claims settlement analysis by year of origin (gross) for – (a) motor (class 5); (b) liability (class 7): (i) employers’ liability and workman’s compensation; (ii) public liability and products’ liability; (iii) any other insurance that is mainly liability (to be specified); (5) the analysis required by sub-paragraph (4) must indicate – (a) the development of each underwriting year at the end of
SCHEDULE 6 Insurance Regulations 2018 Page 52 V01 c each financial year of reported claims outstanding and of provisions for claims incurred but not reported; and (b) the development and settlement of any claim (or number of claims from the same event) which exceeds 20% of the adjusted net assets, as determined by the calculation of solvency margin; (6) if a letter of credit or a guarantee has been or will be issued in support of the business either directly or indirectly, the following information must be supplied for each such security – (a) beneficiary; (b) issued by; (c) to cost of; (d) amount of credit or guarantee; (e) in respect of; (f) whether adjustable and, if so, when; (g) term of notice; (h) restrictions on drawing rights; and (i) other material terms or conditions; (7) details of any material change, made or projected, in the information provided under (2) or (3) above subsequent to the financial year end, or confirmation that no material change has been made or is projected for the current financial year; and (8) a statement of the solvency margin of the insurer in the form prescribed in regulation 21.
Insurance Regulations 2018 SCHEDULE 6 c V01 Page 53 PART II - DIRECTORS’ CERTIFICATE (NON LONG-TERM INSURERS) Directors’ certification to the Isle of Man Financial Services Authority in respect of [insert company name] (‘the Company’) We certify that: l. The Company complied with the requirements of the Insurance Act 2008 (as amended) and the Insurance Regulations 2018 during the period of account ended [insert balance sheet date]. 2. The supplementary information submitted with the audited accounts for that period has been compiled in accordance with the Insurance Regulations 2018. 3. The excess of adjusted net assets (calculated in accordance with the Insurance Regulations 2018) over the required minimum margin of solvency at the end of that year was [insert amount and currency].
4. As at the balance sheet date no charge had been made on the assets of the Company to secure the liabilities of any other person (except as stated in notes to the audited accounts*) and there has been no charge since that date. 5. There was no material change in the share ownership or share structure of the Company during the period of account (apart from the change notified to the Isle of Man Financial Services Authority in writing on [insert date(s)]*). Director Director Date * Delete or include as appropriate
SCHEDULE 6 Insurance Regulations 2018 Page 54 V01 c PART III - AUDITOR’S REPORT (NON LONG-TERM INSURERS) Auditors’ Report in respect of [insert company name] (‘the Company’) To the Isle of Man Financial Services Authority We have examined the information furnished pursuant to regulation 15 of the Insurance Regulations 2018 in respect of the period of account ended [insert balance sheet date]. In our opinion and according to the information and explanations we have received: (i) all of the information prescribed in regulation 15 of those Regulations as is relevant to the business carried on by the Company has been properly prepared; and (ii) it was reasonable for the directors giving the certificate under regulation 15(4) of those Regulations to have made the statements thereon contained in paragraphs 2, 3, and4.
Date Signed [Name of auditor] [Relevant qualification of auditor]
Insurance Regulations 2018 SCHEDULE 7 c V01 Page 55 SCHEDULE 7 REGULATORY GENERAL BUSINESS REVENUE ACCOUNT (NON LONG- TERM INSURANCE) (for business accounted for on an annual basis) Premiums Gross premiums receivable X Reinsurance premiums payable (X) Net premiums written X (Increase) /decrease in unearned premiums (X) X (Increase)/decrease in provision for unexpired risks (X) Claims Gross * (X) Recoverable from reinsurers * X (X) Commission and Expenses Commission payable (X) Expenses (X) (X) Commission receivable X (Increase)/decrease in deferred acquisition costs (X) (X) Underwriting profit/(loss) (X) Attributable investment return (note 3) X Insurance profit/(loss) X NOTES 1. Corresponding figures to be given for preceding accounting period. 2. Items which are marked with an asterisk may be disclosed by way of note. 3. The inclusion in this statement of part of the investment return is optional (see Note 2 to Part I of Schedule 8).
4. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the regulatory general business revenue account, or separately by way of note. 5. Where an item is nil in both the period and the preceding period, the relevant heading may be omitted.
SCHEDULE 8 Insurance Regulations 2018 Page 56 V01 c SCHEDULE 8 PART I - REGULATORY PROFIT AND LOSS ACCOUNT (NON LONG-TERM INSURANCE) Transfer from / (to) insurance accounts Regulatory general business revenue account X X Investment return (excluding long-term business) Investment income X Gains / (losses) on investments Realised X Unrealised X X Allocated to regulatory general business revenueaccount (X) X X Differences on exchange X Loan interest payable (X) Other expenses (X) (X) Profit / (loss) before taxation X Taxation (X) Profit / (loss) after taxation X Extraordinary items (X) X Unrealised gains on investments, less taxation, transferred to revaluation reserve (X) Transfer (to) / from statutory reserve (X) (X) Profit available for appropriation X Dividends paid and proposed (X ) Retained profit/(loss) X
Insurance Regulations 2018 SCHEDULE 8 c V01 Page 57 NOTES 1. Corresponding figures to be given for preceding accounting period. 2. Total realised gains/(losses) on investments may be included either in the regulatory profit and loss account or as a movement on reserves. Where realised gains/(losses) on investments are included in the regulatory profit and loss account, total unrealised gains/(losses) on investments may also be included in the regulatory profit and loss account (otherwise they are to be shown as a movement on reserves). If realised/unrealised investment gains/(losses) are included in the regulatory profit and loss account, the whole or any part of such gains/(losses) may, at the company's option, be allocated to the regulatory general business revenue account. Realised/unrealised gains/(losses) shown as a movement on reserves are not to be allocated to the regulatory general business revenue account.
3. Unrealised differences on exchange may be included wholly or partly in the regulatory profit and loss account or as movement on revaluation reserve. 4. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the regulatory profit and loss account, or separately by way of note. 5. Where an item is nil in both the period and the preceding period, the relevant heading may be omitted.
SCHEDULE 8 Insurance Regulations 2018 Page 58 V01 c PART II - STATEMENT OF RESERVES (NON LONG-TERM INSURANCE) Share premium account Statutory reserve Revaluatio n reserve Distributable reserve Accumulated reserves brought forward X X X X Unrealised gains / (losses) on investment, less taxation - - X - Unrealised difference on exchange, less taxation - - X - Transfer on realisation of revaluation gains ( X) X Realised gains / (losses) on investment, less taxation - X Transfer from (to) regulatory profit and loss account - X X X Other items, less taxation (to be specified) X - X X Accumulated reserves carried forward X X X X NOTES 1. Any deficit on revaluation reserve must be made good by a transfer from distributable reserves.
2. Where there are nil items the relevant headings may be omitted. 3. Where the authorised insurer has established a reserve other than those itemised above, this must be shown separately together with an explanation of the nature of the reserve. 4. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the statement of reserves, or separately by way of note.
Insurance Regulations 2018 SCHEDULE 8 c V01 Page 59 PART III - REGULATORY INCOME AND EXPENDITURE ACCOUNT (for a mutual association carrying on general business) Premiums / contributions Advance premiums / contributions receivable frommembers X Supplementary premiums / contributions receivable from members X X Reinsurance premiums payable (X) X Investment return Investment income X Gains / (losses) on investments Realised X Unrealised X X Claims Claims paid * (X) Recoverable from reinsurers * (X) X Expenses (X) Differences on exchange (X) Other items (to be specified) (X) X Transfer to reserves (X ) Retained to fund available for outstanding and unreported claims X NOTES: 1. Corresponding figures to be given for preceding accounting period. 2. Items which are marked with an asterisk may be disclosed by way of note. 3. Unrealised investment gains may be taken directly to reserves. 4. Unrealised differences on exchange may be included wholly or partly in the income and expenditure account or as a movement on revaluation reserve.
5. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the regulatory income and expenditure account, or separately by way of note. 6. Where there are nil items the relevant heading may be omitted.
SCHEDULE 9 Insurance Regulations 2018 Page 60 V01 c SCHEDULE 9 PART I - REGULATORY BALANCE SHEET (NON LONG-TERM INSURANCE) Tangible fixed assets X Investments in related companies X Other investments Property * X Fixed interest securities * X Deposits, loans and mortgages * X Ordinary shares and unit trusts * X Other investments * X X Other assets Deposits with reinsurers X Amounts withheld by ceding companies X Other insurance debtors X Bank balances and cash X Miscellaneous X X X General business insurance provisions Unearned premiums (X) Deferred acquisition costs X (X) Unexpired risks (X) Claims (including claims incurred but not reported) (X) (X) Other liabilities Deposits by ceding insurers (X) Amounts withheld from reinsurers (X) Other insurance creditors (X) Bank loans and overdrafts (X) Taxation (X) Proposed dividend (X) Miscellaneous (X) (X) Regulatory net assets X X
Insurance Regulations 2018 SCHEDULE 9 c V01 Page 61 Representing: Share capital X Share premium account X Statutory reserve X Revaluation reserve X Distributable reserve X Shareholders' funds X X NOTES 1. Corresponding figures to be given for preceding accounting period. 2. Items which are marked with an asterisk may be disclosed by way of note. 3. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the regulatory balance sheet, or separately by way of note.
4. Where there are nil items in both the period and the preceding period the relevant heading may be omitted.
SCHEDULE 9 Insurance Regulations 2018 Page 62 V01 c PART II - REGULATORY BALANCE SHEET (for a mutual association carrying on general business) Tangible fixed assets X Investments in related companies X Other investments Property * X Fixed interest securities * X Deposits, loans and mortgages * X Ordinary shares and unit trusts * X Other investments * X X Other assets Accounts due from members X Deposits with reinsurers X Other insurance debtors X Bank balances and cash X Miscellaneous X X Liabilities Amounts due to members (X) Amounts withheld from reinsurers (X) Other insurance creditors (X) Bank loans and overdrafts (X) Miscellaneous (X) (X) Regulatory net assets X Representing: Guarantee fund X Reserves X Fund available for outstanding and unreported claims X X
Insurance Regulations 2018 SCHEDULE 9 c V01 Page 63 NOTES 1. Corresponding figures to be given for preceding accounting period. 2. Items which are marked with an asterisk may be disclosed by way of note. 3. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the regulatory balance sheet, or separately by way of note. 4. Where there are nil items in both the period and the preceding period the relevant heading may be omitted.
SCHEDULE 10 Insurance Regulations 2018 Page 64 V01 c SCHEDULE 10 RECONCILIATION OF SHAREHOLDER FUNDS (NON LONG-TERM INSURANCE) Capital and reserves as shown in the audited accounts X Adjustment for: Deferred acquisition costs X Deferred fee in come X Non-unit reserves X Other (to be specified) X X Regulatory net assets as shown in the regulatory balance sheet X NOTES 1. Corresponding figures to be given for preceding accounting period. 2. Where, in the opinion of the directors, it is desirable to improve the understanding of the regulatory financial statements, material components of a relevant heading may be disclosed separately on the face of the reconciliation of shareholder funds, or separately by way of note.
3. Where there are nil items in both the period and the preceding period the relevant heading may be omitted.
Insurance Regulations 2018 SCHEDULE 11 c V01 Page 65 SCHEDULE 11 PART I - SOLVENCY MARGINS – NON LONG-TERM BUSINESS (1) The minimum margin of solvency of an insurer to carry on — (a) general business within classes 3 to 9 shall be 15% of net premiums written, or £150,000, whichever is the greater; (b) reinsurance business within class 11 shall be £100,000; (c) non long-term business within class 12 shall be £50,000 plus — (i) 10% of net premiums written up to 2 million pounds; and (ii) 5% of net premiums written in excess of 2 million pounds. (2) Where an authorised insurer carries on more than one category of business, the minimum solvency margin shall be the sum of the solvency margins required for each category carried on.
(3) In paragraph 1 “net premiums written” means the premium income receivable in the insurer’s last preceding financial year net of reinsurance and reduced by any rebates or refunds, but where an insurer has not completed its first financial year, the net premiums written shall be taken to be the amount stated in its application for authorisation as the maximum aggregate net premiums which will be written in the first year.
SCHEDULE 11 Insurance Regulations 2018 Page 66 V01 c PART II - ADMISSIBILITY OF ASSETS (1) In this Part — “the aggregated funds” means the sum of the regulatory net assets and the general business insurance provisions as shown by the regulatory balance sheet prepared in accordance with regulation 16(2)(c); “approved investments” means — (a) any investments which are issued or guaranteed by — (i) the Government of the Island; (ii) the Government of the United Kingdom; (b) treasury Bills, Tax Reserve Certificates, or Certificates of Tax Deposit, United Kingdom National Savings Income bonds and fixed interest securities issued by any local authority in the Island or the United Kingdom; (c) any dated investment which is listed on a recognised exchange and which is issued by the Government of — (i) The United States of America; (ii) Any Member State of the European Union; or (d) any dated investment which is listed on a recognised exchange and which is issued by any other Government or organisation if the Authority has confirmed in writing that investments issued by such Government or organisation are acceptable to it either in general or on a case by case basis; “associate” includes, without prejudice to section 54 of the Act, the insurer’s holding company within the meaning of section 1 of the Companies Act 1974, any other subsidiary of that holding company and the controller and insurance manager of the insurer; “debt” (without limiting any other meaning of the term debt), in relation to an insurer, includes assets representing amounts that may become due to the insurer on a contingent basis; “investments” includes securities; “loan amounts” refer only to amounts owing from an associate of the insurer corresponding to a loan from the insurer to that associate, and means the principal amount of the loan and includes accrued interest as at the balance sheet date and other applicable charges relating to the loan that are payable to the insurer;
Insurance Regulations 2018 SCHEDULE 11 c V01 Page 67 “premium” that is a debt of an insurer, as referred to in entry G or H of the table in paragraph (11) , also includes debts relating to return reinsurance premium receivable by the insurer; “recognised exchange” means The London Stock Exchange and any recognised investment exchange under the Financial Services and Markets Act 2000 (an Act of Parliament) and any other investment exchange which is acceptable to the Authority; “regulatory net assets” means the regulatory net assets as shown by the regulatory balance sheet prepared in accordance with regulation 16(2)(c). (2) In the application of this Part to mutual associations, references to “regulatory net assets” and “general business insurance provisions” shall be construed as references to “the sum of the guarantee fund and the reserves” and “the fund available for outstanding and unreported claims” respectively.
(3) Subject to paragraph (4), an asset subject to a third party charge shall be admissible only to the extent that it exceeds the amount outstanding under the charge. (4) Paragraph (3) shall not apply in respect of an asset subject to a third party charge where that charge only secures a liability which arises out of an arrangement under which the third party agrees to guarantee the payment of any claim made under a contract of insurance effected by the insurer. (5) In paragraphs (3) and (4), “asset subject to a third party charge” means an asset of an insurer which is subject to any mortgage, charge, lien or other arrangement (including any arrangement whereby any premiums paid to, or assets of, the insurer are held in trust) to secure a liability of a third party.
(6) For the purposes of entry B within the table at paragraph (11), the calculations shall be based upon — (a) valuations by independent professional valuers made within the period of 3 years immediately preceding the balance sheet date; or (b) the purchase price, if the land or buildings were purchased in an arms length transaction within that period. (7) An asset falling within entry C of the table at paragraph (11) shall not be admissible for the purposes of calculating the solvency margin of the insurer if it is leased by the insurer or is subject to a hire purchase or conditional sale agreement or any financial arrangement under which the property in the asset is not vested in the insurer. (8) Where an insurer holds any units in an acceptable scheme, then, for the purposes of calculating the solvency margin of that insurer, the holding may be treated as a holding of the property of the scheme (other than any part of such property which is not attributable to the units) in proportion to the number of units in the scheme held by the insurer.
SCHEDULE 11 Insurance Regulations 2018 Page 68 V01 c (9) For the purposes of paragraph (8), an “acceptable scheme” is a collective investment scheme which the Authority has confirmed in writing is acceptable to it. (10) Expressions used in paragraphs (7) to (9) have the same meaning as in the Collective Investment Schemes Act 2008. (11) Subject to the provisions of this Part, the assets of the company, described in column 1 of the following table shall not be admissible for the purposes of calculating the solvency margin of an insurer to the extent specified in column 2 — TABLE ASSETS AMOUNT NOT ADMISSIBLE A. Investments (other than land and buildings) (a) Approved investments: in respect of each holding, the amount in excess of 20% of the aggregated funds. (b) Other investments listed on a recognised exchange: in respect of each holding, the amount in excess of 10% of the aggregated funds. (c) Investments (other than those falling within head (b)) in, or amounts owing by any associate of the insurer: the aggregate amount in excess of 25% of the regulatory net assets.
(d) Any other unlisted investments: the aggregate amount in excess of 10% of the regulatory net assets B. Land and buildings (a) All land and buildings (including those falling within head (b)): the aggregate amount in excess of 25% of the aggregated funds (b) Land and buildings occupied by the insurer or an associate of the insurer: the aggregate amount in excess of 10% of regulatory net assets. C. Tangible fixed assets (other than those described elsewhere in this Table): the aggregate amount in excess of 10% of the regulatory net assets.
D. Intangible fixed assets: not admissible. E. Deferred acquisition costs: the aggregate amount in excess of 20% of the unearned premium provision as shown by the regulatory balance sheet prepared in accordance with regulation 16(2)(c). F. Debts (other than those falling within entry A, G, H or paragraph 12) which have been outstanding, whether due or not admissible.
Insurance Regulations 2018 SCHEDULE 11 c V01 Page 69 not, for more than 12 months at the balance sheet date: G. Subject to heads (i) and (ii) and entries I and J, the period referred to in entry F shall instead be 3 months commencing from the date when a debt falling under one or more of heads (a) to (f) is no longer offset by a liability provision (and is therefore no longer admissible) in accordance with that entry. (a) Premium receivable or potentially receivable by an insurer (debt), in the amount by which that debt is offset by a provision of the insurer for any unearned portion of that debt (liability provision), is admissible for the purposes of calculating the solvency margin of the insurer. (b) Commission receivable or potentially receivable by an insurer (debt), in the amount by which that debt is offset by a provision of the insurer for any unearned portion of that debt (liability provision), is admissible for the purposes of calculating the solvency margin of the insurer. (c) Claims or expenses recoverable or potentially recoverable by an insurer under an outward reinsurance contract of the insurer (debt), in the amount by which that debt is offset by a provision of the insurer for actual or potential claims or expenses reinsured under that contract (liability provision), are admissible for the purposes of calculating the solvency margin of the insurer.
(d) Additional premium receivable or potentially receivable by an insurer under a contract of the insurer, to which it is entitled as a result of the occurrence of claims or expenses payable by the insurer under that contract (debt), in the amount by which that debt is offset by a provision of the insurer for those claims or expenses (liability provision), is admissible for the purposes of calculating the solvency margin of the insurer. (e) A debt of an insurer that the insurer has the right to net off under a contract of the insurer against a liability or potential liability of the insurer, in the amount by
SCHEDULE 11 Insurance Regulations 2018 Page 70 V01 c which that debt is offset by a provision of the insurer for that liability (liability provision), is admissible for the purposes of calculating the solvency margin of the insurer. (f) A debt of an insurer, in the amount by which that debt is offset by a corresponding provision of the insurer for bad and doubtful debts (liability provision), is admissible for the purposes of calculating the solvency margin of the insurer. In this entry — (i) A debt is no longer offset by a liability provision from the date (and to the degree) the liability provision would no longer appear with the debt on the same balance sheet of the insurer in question if the insurer were to prepare a balance sheet on, and made up to, that date; and (ii) The 3 month period shall apply only to that part of a debt which is no longer offset under one or more of heads (a) to (f). H. Subject to entries I and J — (a) for a debt representing additional premium receivable or potentially receivable by an insurer to which it is entitled as a result of a declaration or potential declaration to the insurer of asset values or exposure values insured by the insurer under a declaration policy it has written, the period referred to in entry F shall instead be 3 months commencing from the date the declaration is made to the insurer. In this entry a “declaration policy” is an insurance contract under the terms of which the insured is obliged to declare periodically to the insurer the asset values or exposure values insured under the policy as these may fluctuate in the period of insurance and result in later premium adjustments under the policy; and (b) a debt representing after the event legal expenses insurance premium receivable
Insurance Regulations 2018 SCHEDULE 11 c V01 Page 71 or potentially receivable by an insurer, where such receipt is conditional upon the conclusion of due process in relation to court proceedings, is admissible for the purposes of calculating the solvency margin of the insurer until the insurer has been notified formally that the process has been completed. In this entry “after the event legal expenses insurance” means a contract of insurance relating to legal proceedings (taken out after the event that triggered the legal proceedings) which indemnifies the insured against certain costs if the legal action is discontinued or lost.
I. A debt shall be admissible for the longer period that would result under entry F, G or H (as applicable) in relation to that debt. J. For the avoidance of doubt, in relation to a debt, any relief from inadmissibility available under one of more of the categories in entries G or H shall not individually or collectively exceed the amount of that debt. (12) Subject to the provisions of this Part, the assets described in column 1 of the following table shall be admissible for the purposes of calculating the solvency margin of an insurer to the extent specified in column 2 — TABLE ASSETS MAXIMUM AMOUNT ADMISSIBLE A. Issued share capital which is unpaid but is fully supported by a letter of credit or a guarantee from a bank or other institution acceptable to the Authority and in a form approved by him: an amount not exceeding 3 times the paid up amount of the share capital (including any share premium).
B. Letters of credit or a guarantee from a bank or other institution acceptable to the Authority and in a form approved by him: the amount required by the Authority to provide for exceptional circumstances C. Loan amounts owing from an associate of the insurer, if the criteria under 100%
SCHEDULE 11 Insurance Regulations 2018 Page 72 V01 c paragraphs 13 and 14 are complied with for the loan. D. Loan amounts owing from an associate of the insurer, if the criteria under paragraphs 13 and 14 are not complied with but the written approval of the Authority was given prior to 30 June 2012. 100% (13) Generally the criteria under entry C to the table in paragraph (12) (“the general admittance criteria”) are that all of the insurer’s unexpired risks under contracts of insurance it has written are only either or both of the following — (a) obligations under direct insurance contracts under which all insured are related companies of the insurer (“related insured”), or were so when the contracts were entered into; or (b) obligations under reinsurance contracts for which all insured under the underlying direct insurance contracts are related companies of the insurer (also “related insured”), or were so when the contracts were entered into. (14) If at any time since its establishment, the insurer has undergone a controller change (voting power), the criteria, in addition to the general admittance criteria, are — (a) that all or some of the insurer’s unexpired risks under contracts of insurance it has written that existed prior to the change are, after the change, the insurer’s unexpired risks under contracts of insurance it has written for related insured; or (b) if sub-paragraph (a) is not complied with, that the Authority has given prior written approval for the loan to be admissible under entry C. (15) In paragraph (14), “controller change (voting power)”, means a change of controller required to be notified to the Authority under section 29 of the Act, but applying only to a controller corresponding with paragraph (d) of the definition of “controller” under section 54 of the Act. (16) A financial liability included within the audited (non-consolidated) balance sheet of an authorised insurer and which has been deemed by the Authority to be suitably alike in characteristics to equity capital for regulatory purposes may, with the written approval of the Authority, be added back to the total of regulatory net assets for the purposes of calculating the solvency margin of that insurer. Liabilities treated in this way are referred to in these Regulations as “secondary capital”.
(17) In addition to requirements as may be applicable to the approval given under paragraph (16), secondary capital must not be paid away or otherwise withdrawn from an authorised insurer unless a written notice is served on the Authority by the insurer not less than 28 days before the event, or such shorter period as the Authority may agree in writing.
Insurance Regulations 2018 SCHEDULE 11 c V01 Page 73 PART III - CALCULATION OF SOLVENCY MARGIN (1) The solvency margin of an insurer shall be calculated in the manner specified in the following table — A – REGULATORY NET ASSETS AND GENERAL BUSINESS Regulatory net assets as shown by the regulatory balance sheet (notes i and iv) X Undisclosed reserves included in: Provision for claims X X Adjustment of assets to market value (note ii) X Secondary capital (note iii) X X Adjustments on restatement of assets in accordance with Part II of Schedule 11 1. Investments (other than land and buildings) (X) 2. Land and Buildings (X) 3. Other tangible assets (X) 4. Assets subject to charge (X) 5. Intangible assets (X) 6. Deferred acquisition costs (X) 7. Debts (X) 8. Unpaid share capital X 9. Letters of credit and guarantees (note v) X (X) Adjusted net assets X Required minimum margin for general business (note vi) (X) Regulatory net assets / surplus in respect of non long-term insurance business (as applicable) X NOTES (i) In the application of this Part to mutual associations, references to “regulatory net assets” and “general business insurance provisions” shall be construed as references to “the sum of the guarantee fund and the reserves” and “the fund available for outstanding and unreported claims” respectively. (ii) Where investments or land and buildings are stated in the regulatory balance sheet at an amount less than market value, an adjustment to market value may be included in the calculation of adjusted net assets for solvency margin purposes (subject to any restriction on admissibility in accordance with Part II of this Schedule).
SCHEDULE 11 Insurance Regulations 2018 Page 74 V01 c (iii) “Secondary capital” is a financial liability approved and treated in accordance with paragraphs 16 and 17 of Part II of this Schedule. (iv) In this part “regulatory balance sheet” means the regulatory balance sheet prepared in accordance with regulation 16(2)(c). (v) Issuing body to be specified. (vi) Detail of calculation to be shown.
Insurance Regulations 2018 Explanatory Note c V01 Page 75 EXPLANATORY NOTE (This note is not part of the Regulations) These Regulations replace the Insurance Regulations 1986. Part 1 contains general provisions for authorised insurers including the categories and classes of insurance business, and the exemptions from being authorised under section 5 of the Insurance Act 2008. Part 2 applies certain regulations of the Regulations and certain sections of the Act to foreign insurers that hold permits. The Regulations require information to be submitted in reports to the Authority on a quarterly and annual basis. Part 3 sets out the reporting requirements for authorised insurers carrying on long-term business and Part 4 sets out the reporting requirements for authorised insurers carrying on non long- term business.
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