INSPRU 1.1 Application
1INSPRU 1.1 applies to an insurer unless it is:
- (1)
- (2)
an incoming EEA firm; or
- (3)
- (1)
This section applies to a firm in relation to the whole of its business, except where a particular provision provides for a narrower scope.
- (2)
Where a firm carries on both long-term insurance business and general insurance business, this section applies separately to each type of business.
For a non-EEA insurer with a branch in the United Kingdom whose insurance business in the United Kingdom is not restricted to reinsurance (other than an EEA-deposit insurer, a Swiss general insurer or a UK-deposit insurer):
- (1)
the part of this section headed "Capital requirements for insurers" (INSPRU 1.1.43 G to INSPRU 1.1.92B G) applies to its world-wide activities;
- (2)
the parts of this section headed:
- (a)
"Establishing technical provisions" (INSPRU 1.1.12 R to INSPRU 1.1.19 G);
- (b)
"Reinsurance and analogous non-reinsurance financing agreements: risk transfer principle" (INSPRU 1.1.19A R to INSPRU 1.1.19F G);
- (c)
"Assets of a value sufficient to cover technical provisions and other liabilities" (INSPRU 1.1.20 R to INSPRU 1.1.29 G);
- (d)
"Matching of assets and liabilities" (INSPRU 1.1.34 R to INSPRU 1.1.40 G); and
- (e)
"Premiums for new business" (INSPRU 1.1.41 R to INSPRU 1.1.42 G);
apply separately in respect of its world-wide activities and its activities carried on from a branch in the United Kingdom; and
- (a)
- (3)
the part of this section headed "Localisation" (INSPRU 1.1.30 R to INSPRU 1.1.33 R) does not apply (see INSPRU 1.5 (Internal contagion risk)).
For an EEA-deposit insurer or a Swiss general insurer:
- (1)
the parts of this section headed:
- (a)
"Establishing technical provisions" (INSPRU 1.1.12 R to INSPRU 1.1.19 G);
- (b)
"Reinsurance and analogous non-reinsurance financing agreements: risk transfer principle" (INSPRU 1.1.19A R to INSPRU 1.1.19F G);
- (c)
"Assets of a value sufficient to cover technical provisions and other liabilities" (INSPRU 1.1.20 R to INSPRU 1.1.29 G);
- (d)
"Matching of assets and liabilities" (INSPRU 1.1.34 R to INSPRU 1.1.40 G); and
- (e)
"Premiums for new business" (INSPRU 1.1.41 R to INSPRU 1.1.42 G);
apply in respect of the activities of the firm carried on from a branch in the United Kingdom; and
- (a)
- (2)
the parts of this section headed "Capital requirements for insurers" (INSPRU 1.1.43 G to INSPRU 1.1.92B G) and "Localisation" (INSPRU 1.1.30 R to INSPRU 1.1.33 R) do not apply.
For a UK-deposit insurer:
- (1)
the part of this section headed "Capital requirements for insurers" (INSPRU 1.1.43 G to INSPRU 1.1.92B G) applies to its world-wide activities;
- (2)
the parts of this section headed:
- (a)
"Establishing technical provisions" (INSPRU 1.1.12 R to INSPRU 1.1.19 G);
- (b)
"Reinsurance and analogous non-reinsurance financing agreements: risk transfer principle" (INSPRU 1.1.19A R to INSPRU 1.1.19F G);
- (c)
"Assets of a value sufficient to cover technical provisions and other liabilities" (INSPRU 1.1.20 R to INSPRU 1.1.29 G);
- (d)
"Matching of assets and liabilities" (INSPRU 1.1.34 R to INSPRU 1.1.40 G); and
- (e)
"Premiums for new business" (INSPRU 1.1.41 R to INSPRU 1.1.42 G);
apply separately in respect of its world-wide activities and its activities carried on from branches in EEA States; and
- (a)
- (3)
the part of this section headed "Localisation" (INSPRU 1.1.30 R to INSPRU 1.1.33 R) does not apply (see INSPRU 1.5 (Internal contagion risk)).
This section may apply in cases where a firm has its head office in another EEA State but is neither an incoming EEA firm nor an incoming Treaty firm; this could arise in the case of a non-directive mutual.
Assets of a value sufficient to cover technical provisions and other liabilities
A firm carrying on long-term insurance business must ensure that it has admissible assets in each of its with-profits funds of a value sufficient to cover:
- (1)
the technical provisions in respect of all the business written in that with-profits fund; and
- (2)
its other long-term insurance liabilities in respect of that with-profits fund.
In addition to complying with INSPRU 1.1.27 R, a realistic basis life firm must also ensure that the realistic value of assets for each of its with-profits funds is at least equal to the realistic value of liabilities of that fund.
INSPRU 1.1.27 R and INSPRU 1.1.28 R support the funding of policyholder benefits by requiring firms to maintain admissible assets in with-profits funds to cover the technical provisions and other long-term insurance liabilities relating to all the business in that fund and, in the case of a realistic basis life firm, realistic assets to cover the realistic liabilities of the with-profits insurance contracts written in the fund.
The brought forward amount
Insurance-related capital requirement2
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