COBS 21.3 Rules for firms engaged in linked long-term insurance business

An insurer must not contract to provide benefits under linked long-term contracts of insurance that are determined:

1. (1)

   wholly or partly, or directly or indirectly, by reference to fluctuations in any index other than an approved index;

2. (2)

   wholly or partly by reference to the value of, or the income from, or fluctuations in the value of, property other than any of the following:

   1. (a)

      approved securities;

   2. (b)

      listed securities;

   3. (c)

      permitted unlisted securities;

   4. (d)

      permitted land and property;

   5. (e)

      permitted loans;

   6. (f)

      permitted deposits;

   7. (g)

      permitted scheme interests;

   8. (h)

      income from (a) to (g) above;

   9. (i)

      cash;

   10. (j)

       permitted units;

   11. (k)

       permitted stock lending; and

   12. (l)

       permitted derivatives contracts.

A firm that has entered into a reinsurance contract in respect of its linked long-term insurance business must nevertheless discharge its responsibilities under its linked long-term insurance contracts as if no reinsurance contract had been effected.