• PINS Chapter 5 PINS Chapter 5 Additional requirements for long term insurance business

    Editorial changes (as from 1 January 2015).

    • PINS Part 5.1 PINS Part 5.1 Application and purpose

      Editorial changes (as from 1 January 2015).

      • PINS 5.1.1 PINS 5.1.1 Application of Chapter 5

        This Chapter applies to all insurers (other than QFC captive insurers) conducting:

        (a) long term insurance business; or
        (b) general insurance business attributed to PINS category 1 under PINS Rule 5.3.2(2).
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

        • PINS 5.1.1 Guidance

          This Chapter sets out additional requirements in respect of long term insurance business.

          Editorial changes (as from 1 January 2015).

    • PINS Part 5.2 PINS Part 5.2 Establishment of long term insurance funds

      Editorial changes (as from 1 January 2015).

      • PINS 5.2.1 Long term insurance funds to be established

        An insurer conducting long term insurance business must either:

        (a) establish and maintain 1 or more long term insurance funds; or
        (b) notify the Regulatory Authority that the insurer is deemed to constitute a single long term insurance fund.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 5.2.2 PINS 5.2.2 [Deleted]

        Deleted by QFCRA RM/2011-2 (as from 1st July 2011).

        • PINS 5.2.2 Guidance [Deleted]

          Deleted by QFCRA RM/2007-01 (as from 1st July 2007).

      • PINS 5.2.3 Treatment of branches

        (1) A branch that is subject to a regulatory requirement in another jurisdiction to arrange its affairs in a manner that is equivalent or substantially equivalent to the requirements of this Part, may make an application to the Regulatory Authority for that arrangement of its affairs to be deemed for the purposes of these rules to constitute a long term insurance fund.
        (2) If the Regulatory Authority approves that application, it must inform the branch in writing, and must state in its notice to the branch the manner in which the arrangement will be deemed for the purpose of these rules to constitute a long term insurance fund.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 5.2.4 Insurer deemed to constitute long term insurance fund to be treated as though it had established such fund

        An insurer that is deemed, in accordance with rule 5.2.1 (b), to constitute a single long term insurance fund shall be treated for all purposes relating to these rules as though the insurer had established a long term insurance fund to which all of the assets and liabilities of the insurer are attributed.

        Editorial changes (as from 1 January 2015).

    • PINS Part 5.3 PINS Part 5.3 Attribution of contracts to a long term insurance fund

      Editorial changes (as from 1 January 2015).

      • PINS 5.3.1 Business to be attributed to long term insurance funds

        An insurer must attribute all long term insurance business that it conducts to a long term insurance fund.

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

      • PINS 5.3.2 Attribution of general insurance contracts

        (1) Except as allowed for in (2), an insurer may not attribute general insurance contracts to a long term insurance fund.
        (2) An insurer may attribute contracts of insurance in PINS category 1 to a long term insurance fund.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS Part 5.4 PINS Part 5.4 Segregation of assets and liabilities

      Editorial changes (as from 1 January 2015).

      • PINS 5.4.1 Separate identification of assets, liabilities, revenues and expenses

        An insurer that is required under PINS rule 5.2.1 to establish and maintain 1 or more long term insurance funds, or has attributed contracts of insurance in PINS category 1 to a long term insurance fund under PINS Rule 5.3.2(2), must:

        (a) identify separately in its books and records the assets, liabilities, revenues and expenses attributable to that business; and
        (b) ensure those assets, liabilities, revenues and expenses are recorded separately and accounted for as a long term insurance fund.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 5.4.2 Recording of assets, liabilities, revenues and expenses

        An insurer must record all assets, liabilities, revenues and expenses in respect of a contract of insurance that is attributed to a long term insurance fund as assets, liabilities, revenues and expenses of that long term insurance fund.

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

      • PINS 5.4.3 PINS 5.4.3 Attribution of assets not al attributed

        An insurer may at any time attribute any of its assets to a long term insurance fund that were not previously attributed to such a long term insurance fund.

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

        • PINS 5.4.3 Guidance

          A transaction described in PINS Rule 5.4.3 is sometimes described as a transfer of capital into the long term insurance fund.

          Amended by QFCRA RM/2012-5 (as from 1st July 2013).

      • PINS 5.4.4 Recording of revenues and expenses

        All revenues and expenses arising by way of earnings, revaluation or other change to the assets and liabilities of a long term insurance fund must be recorded as revenues and expenses, or movements in capital, of that long term insurance fund.

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

      • PINS 5.4.5 Accounting and other records to be maintained

        An insurer must maintain adequate accounting and other records to identify the contracts and the assets, liabilities, revenues and expenses attributable to the long term insurance fund in accordance with the requirements of Part 5.4.

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

    • PINS Part 5.5 PINS Part 5.5 Limitation on use of assets in long term insurance fund

      Editorial changes (as from 1 January 2015).

      • PINS 5.5.1 Application of assets

        An insurer must ensure that, except as provided in PINS Part 5.5, assets that are attributable to a long term insurance fund are applied only for the purposes of the business attributed to the long term insurance fund.

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

      • PINS 5.5.2 Assets of long term insurance funds not to be transferred

        An insurer must ensure assets attributable to a long term insurance fund are not transferred so as to be available for other purposes of the insurer except:

        (a) where the transfer constitutes appropriation of a surplus determined in accordance with rule 9.1.3(4)(g), provided that the transfer is performed within 4 months of the reference date of the financial condition report that this determination forms part of;
        (b) where the transfer constitutes a payment of dividend or return of capital, in accordance with PINS Rule 5.5.4;
        (c) where the transfer is made in exchange for other assets at fair value;
        (d) where the transfer constitutes reimbursement of expenditure borne on behalf of the long term insurance fund and in respect of expenses attributable to the long term insurance fund; or
        (e) where the transfer constitutes reattribution of assets attributed to the long term insurance fund in error.
        Amended by QFCRA RM 2019-1 (as from 28th March 2019).

      • PINS 5.5.3 Assets of long term insurance funds not to be distributed

        An insurer must not make any distribution by way of dividend, or return of capital assets attributable to a long term insurance fund, if by doing so that would result in a breach of PINS Chapter 5.

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

      • PINS 5.5.4 Payment of dividends by insurers constituting single long term insurance funds

        An insurer that is deemed to constitute a single long term insurance fund may only make a dividend or return of capital where the dividend or return of capital constitutes appropriation of a surplus determined in accordance with rule 9.1.3(4)(g), and:

        (a) if the payment is made within 4 months of the reference date of the actuarial investigation (the financial condition report) determining that surplus, the payment does not cause the total aggregate amount of the dividends or returns of capital made by the insurer since that reference date to exceed the amount of that surplus; or
        (b) if the payment is made more than 4 months after the reference date of the actuarial investigation (the financial condition report) determining that surplus, the payment does not cause the total aggregate amount of the dividends or returns of capital made by the insurer since that reference date to exceed 50% of the amount of that surplus.
        Amended by QFCRA RM 2019-1 (as from 28th March 2019).

      • PINS 5.5.5 Assets not to be lent

        An insurer must not lend or otherwise make available for use for any other purposes of the insurer, or any purposes of any party related to the insurer, assets attributable to a long term insurance fund.

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

      • PINS 5.5.6 PINS 5.5.6 Certain reinsurance-like arrangements prohibited

        An insurer may not enter into any arrangement, whether or not described as a contract of reinsurance, whereby a long term insurance fund of the insurer stands in the same relation to the insurer as though the insurer were the reinsurer in a contract of reinsurance in which the long term insurance fund is the cedant.

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

        • PINS 5.5.6 Guidance

          PINS Rule 5.5.6 operates to prohibit reinsurance between long term insurance funds of the same insurer, as well as arrangements of the nature of internal contracts of reinsurance where the cession transaction is attributed to a long term insurance fund but the corresponding reinsurance acceptance transaction is not.

          Amended by QFCRA RM/2012-5 (as from 1st July 2013).