• PINS Part 4.8 PINS Part 4.8 Reduction of eligible capital

    Editorial changes (as from 1 January 2015).

    • PINS 4.8.1 PINS 4.8.1 Tier 1 capital not to be reduced without approval

      An insurer must not reduce the tier 1 capital component of its eligible capital without the prior approval of the Regulatory Authority.

      Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 4.8.1 Guidance

        A reduction of an insurer's eligible capital includes, but is not limited to:

        a. Share buybacks;
        b. the redemption, repurchase or early repayment of any eligible capital instruments issued by the insurer or a special purpose vehicle trading in its own shares; or
        c. where aggregate interest and dividend payments on tier 1 capital exceed the insurer's after-tax earnings in the year to which they relate (i.e. dividend and interest payments on tier 1 capital wholly or partly funded from retained earnings).
        Editorial changes (as from 1 January 2015).

    • PINS 4.8.2 PINS 4.8.2 Capital plan to be provided

      An insurer must provide to the Regulatory Authority when seeking approval for a reduction under PINS Rule 4.8.1 a capital plan that has incorporated the effects of the proposed reduction and:

      (a) demonstrates that the insurer will remain in excess of its minimum capital requirement for 2 years without relying on new capital issues;
      (b) is consistent with the insurer's business plan; and
      (c) takes account of any possible acquisitions, locked-in capital in subsidiaries and the possibility of exceptional losses.
      Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 4.8.2 Guidance [Deleted]

        Deleted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS 4.8.3 Notice to be given of proposed reduction of tier 2 capital

      An insurer must notify the Regulatory Authority of its intention to reduce its tier 2 capital at least 6 months before the actual date of the proposed reduction, providing details of how it will meet its minimum capital requirement after the proposed reduction.

      Amended by QFCRA RM 2019-1 (as from 28th March 2019).