• 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).