The Insurance Companies (Amendment) Regulations 1995

2.  For the purposes of this Schedule—

• “business amount” means—

  (a)

  for a company carrying on only general business, the general business amount;

  (b)

  for a company carrying on only long term business, the long term business amount;

  (c)

  for a company carrying on both general business and long term business, in the case of its general business assets, the general business amount and in the case of its long term business assets, the long term business amount.

• “connected company” of any company means—

  (a)

  that company’s holding company;

  (b)

  a subsidiary of that company;

  (c)

  a subsidiary of the holding company of that company.

• “counterparty” in relation to a company means—

  (a)

  any one individual;

  (b)

  any one unincorporated body of persons;

  (c)

  any one company not being a member of a group;

  (d)

  any group of companies excluding any companies within the group which are dependants of the insurance company; or

  (e)

  any government of a state together with all the public bodies, local authorities or nationalised industries of that state,

  in which the insurance company has made investments or against whom it has rights whether in pursuance of a contract entered into by the insurance company or otherwise; and reference to dealings with or by a counterparty includes dealings with or by any person or body of persons included within the definition of counterparty;

• “counterparty exposure” shall be determined in accordance with paragraph 13 below;

• “debts due or to become due” includes any debts which would become due if the insurance company were to exercise any right to which it is entitled to require payment or repayment of the same;

• “diversified contract for differences” means a contract for differences whose value does not depend to a significant extent on fluctuations in the value of, or income from, assets or any of the descriptions in paragraphs 1 to 9, 11 or 13 to 19 of Part II of this Schedule and “undiversified contract for differences” shall be construed accordingly;

• “excess concentration with a number of counterparties” shall be determined in accordance with paragraph 17 below;

• “general business amount” means the aggregate of the company’s insurance liabilities (net of reinsurance) in respect of general business and an amount equal to whichever is the greater of 400,000 units of account or 20 per cent. of the general premium income;

• “group” has the meaning given in section 262 of the Companies Act 1985;

• “hybrid security” means a debt security, other than an approved security, the terms of which provide, or have the effect that, or contain an option which if exercised by the issuer would have the effect that the holder does not or would not have an unconditional entitlement to payment of interest and repayment of capital in full within seventy five years of the relevant date;

• “index linked liabilities” means contractual liabilities to policyholders to pay index linked benefits;

• “insurance liabilities” means amounts calculated in accordance with Part IX of these Regulations in respect of those items shown at C and D under the heading “Liabilities” set out in paragraph 9 of Schedule 9A to the Companies Act 1985;

• “long term business amount” means the amount of the company’s insurance liabilities (net of reinsurance ceded and excluding property linked liabilities), together with—

  (a)

  the amount of the required margin of solvency (or the amount of the minimum guarantee fund if greater) determined in accordance with regulations 18 to 22 above (or, in the case of a company whose head office is not in the United Kingdom, the amount which would apply if its head office were in the United Kingdom) less the amount of any implicit item valued in accordance with regulations 24 to 26 of these Regulations; and

  (b)

  the amount of any deposit-back in connection with a contract of reinsurance in respect of long-term business,

  save that for the purposes of assessing compliance with the permitted asset exposure limit, it shall further exclude index linked liabilities.

• “permitted asset exposure limit” has the meaning set out in paragraph 3 of this Schedule;

• “permitted counterparty exposure limit” has the meaning set out in paragraph 4 of this Schedule;

• “property linked liabilities” means contractual liabilities to policyholders in respect of property linked benefits;

• “readily realisable” in relation to a listed investment means a listed investment to which regulation 51(3) either does not apply or applies by reason only that—

  (a)

  the listing of the investment has been temporarily suspended following receipt of price sensitive information by the stock exchange on which the investment is listed or the regulated market on which facilities for dealing have been granted; or

  (b)

  the extent of the holding would prevent an orderly disposal of the investment for not more than 97½ per cent of the market value;

• “short term deposit” means a sum of money which may be withdrawn at the discretion of the lender without penalty or loss of accrued interest by giving notice of withdrawal of one month or less.