Insurance Companies (Amendment) Regulations 1985
| Jurisdiction | UK Non-devolved |
| Citation | SI 1985/1419 |
1985 No. 1419
INSURANCE
The Insurance Companies (Amendment) Regulations 19859thSeptember 1985
13thSeptember 1985
9thOctober 1985
The Secretary of State, in exercise of his powers under sections 2(5), 5(1)(a), 7(6), 9(1)(b) and (c) and (7), 15(6), 32(1), (2) and (3), 33(1), 35(1), 60, 61, 62, 72(1) and (2), 74(1) and (2), 75(2) and (5), 78(1), (2)(a) and (5), 90 and 97 of the Insurance Companies Act 1982(a) and of all other powers enabling him in that behalf, hereby makes the following Regulations:
1.— (1) These Regulations may be cited as the Insurance Companies (Amendment) Regulations 1985 and shall come into operation on 9th October 1985.
(2) The Insurance Companies Regulations 1981(b) ("the principal Regulations") shall have effect subject to the amendments set out in these Regulations.
2.— (1) In Regulation 2(1) of the principal Regulations, there shall be inserted after the definition of "cede" and "cession" the following definition:
" "deposit back arrangement", in relation to any contract of reinsurance, means an arrangement whereby an amount is deposited by the reinsurer with the cedant;".
(2) In the definition of "mathematical reserves" in the said Regulation 2(1) there shall be inserted after the word "due" and within the parentheses the words, "and liabilities arising from deposit back arrangements".
3.— (1) In paragraph (1) of Regulation 5 of the principal Regulations there shall be substituted for the words "paragraphs (3), (4) and (5)" the words "paragraphs (3), (4), (5) and (5A)".
(2) In paragraph (2)(b) of the said Regulation 5, there shall be substituted for the words "after the deduction of reinsurance cessions at the end of the last preceding financial year" the words "at the end of the last preceding financial year after the deduction of reinsurance cessions".
(a) 1982 c.50.
(b) S.I. 1981/1654, amended by S.I. 1982/675, 1983/396.
(3) In paragraph (3)(a) of the said Regulation 5 there shall be substituted for the words "paragraphs (4) and (5)" the words "paragraphs (4), (5) and (5A)", and the words "(or, in the case of risk premium business carried on by pure reinsurers, 0.1 per cent)" shall be omitted.
(4) In paragraph (4) of the said Regulation 5, there shall be substituted for the words "In the case of a contract that" the words "Where, in a case other than that of a pure reinsurer, a contract"; and all the words after "0.15 per cent" shall be omitted.
(5) After paragraph (5) of the said Regulation 5 there shall be inserted the following paragraph:
"(5A) In the case of pure reinsurers, the percentage to be taken for the purposes of paragraph (3)(a) above shall be 0.1 per cent."
(6) There shall be substituted for paragraph (6) of the said Regulation 5 the following paragraph:
"(6) For the purposes of the second calculation, the capital at risk is—
(a) in any case in which an amount is payable in consequence of death other than a case falling within subparagraph (b) below, the amount payable on death, and
(b) in any case in which the benefit under the contract in question consists of the making, in consequence of death, of the payment of an annuity, payment of a sum by instalments or any other kind of periodic payments, the present value of that benefit,
less in either case the mathematical reserves in respect of the relevant contracts."
(7) At the end of the said Regulation 5 there shall be inserted the following paragraph:
"(7) When the amount of the mathematical reserves referred to in paragraph (2)(a) above, or the amount of the capital at risk referred to in paragraph (3)(a) above, is to be calculated for the purposes of determining the required margin of solvency, the day as on which that amount is calculated shall be the same as that as on which the margin of solvency is determined; and the mathematical reserves referred to in paragraph (6) above shall also be calculated as on that day when the capital at risk in question is that referred to in paragraph (3)(a) above, but shall be calculated as at the end of the last preceding financial year when the capital at risk in question is that referred to in paragraph (3)(b) above."
4.— (1) In paragraph (1) of Regulation 9 of the principal Regulations there shall be inserted after the word "solvency" the words "(being, in the case of long term business, the required margin of solvency arrived at in...
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