INSPRU 1.1 Application

1INSPRU 1.1 applies to an insurer unless it is:

1. (1)

   a non-directive friendly society; or

2. (2)

   an incoming EEA firm; or

3. (3)

   an incoming Treaty firm

1. (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. (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. (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. (2)

   the parts of this section headed:

   1. (a)

      "Establishing technical provisions" (INSPRU 1.1.12 R to INSPRU 1.1.19 G);

   2. (b)

      "Reinsurance and analogous non-reinsurance financing agreements: risk transfer principle" (INSPRU 1.1.19A R to INSPRU 1.1.19F G);

   3. (c)

      "Assets of a value sufficient to cover technical provisions and other liabilities" (INSPRU 1.1.20 R to INSPRU 1.1.29 G);

   4. (d)

      "Matching of assets and liabilities" (INSPRU 1.1.34 R to INSPRU 1.1.40 G); and

   5. (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

3. (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. (1)

   the parts of this section headed:

   1. (a)

      "Establishing technical provisions" (INSPRU 1.1.12 R to INSPRU 1.1.19 G);

   2. (b)

      "Reinsurance and analogous non-reinsurance financing agreements: risk transfer principle" (INSPRU 1.1.19A R to INSPRU 1.1.19F G);

   3. (c)

      "Assets of a value sufficient to cover technical provisions and other liabilities" (INSPRU 1.1.20 R to INSPRU 1.1.29 G);

   4. (d)

      "Matching of assets and liabilities" (INSPRU 1.1.34 R to INSPRU 1.1.40 G); and

   5. (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

2. (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. (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. (2)

   the parts of this section headed:

   1. (a)

      "Establishing technical provisions" (INSPRU 1.1.12 R to INSPRU 1.1.19 G);

   2. (b)

      "Reinsurance and analogous non-reinsurance financing agreements: risk transfer principle" (INSPRU 1.1.19A R to INSPRU 1.1.19F G);

   3. (c)

      "Assets of a value sufficient to cover technical provisions and other liabilities" (INSPRU 1.1.20 R to INSPRU 1.1.29 G);

   4. (d)

      "Matching of assets and liabilities" (INSPRU 1.1.34 R to INSPRU 1.1.40 G); and

   5. (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

3. (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)).

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. (1)

   the technical provisions in respect of all the business written in that with-profits fund; and

2. (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.