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Status: You are viewing the version of the handbook as on 2009-03-31.

SUP App 2.8 Ceasing to effect contracts of insurance

SUP App 2.8.1RRP

If a firm decides to cease to effect new contracts of insurance, it must, within 28 days of that decision, submit a run-off plan to the FSA including:

  1. (1)

    a scheme of operations; and

  2. (2)

    an explanation of how, or to what extent, all liabilities to policyholders (including, where relevant, liabilities which arise from the regulatory duty to treat customers fairly in setting discretionary benefits) will be met in full as they fall due.

SUP App 2.8.2G

SUP App 2.8.1 R only applies if a firm ceases to effecting new contracts of insurance in respect of the whole of its insurance business.

SUP App 2.8.3G

For the purposes of SUP App 2.8.1 R, a new contracts of insurance excludes contracts effected under a term in a subsisting contract of insurance. 1

SUP App 2.8.4GRP

Under Principle 11, the FSA normally expects to be notified by a firm when it decides to cease effecting new contracts of insurance in respect of one or more classes of contract of insurance (see SUP 15.3.8 G). At the same time, the FSA would normally expect the firm to discuss with it the need for the firm to apply to vary its permission (see SUP 6.2.6 G and SUP 6.2.7 G) and, if appropriate, to submit a scheme of operations in accordance with SUP App 2.8.1 R.

SUP App 2.8.5G

See SUP App 2.11.2 G for guidance on the period that the scheme of operations should cover.