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.
Sharebuybacks;b. the redemption, repurchase or early repayment of any eligible capital instruments issued by the insurer or a special purpose vehicletrading in its own shares; orc. 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
subsidiariesand 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).