• PINS Chapter 10 PINS Chapter 10 Insurers that are members of groups

    Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

    • PINS 10.1.1 PINS 10.1.1 Application of ch 10

      This Chapter applies to every insurer (other than a QFC captive insurer) that is a member of a group.

      Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

      • PINS 10.1.1 Guidance [Deleted]

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

    • PINS 10.1.2 PINS 10.1.2 Purpose of ch 10

      This Chapter imposes additional requirements on an insurer that is a member of a group to ensure that:

      (a) the insurer is capitalised adequately to protect itself against the risks arising from its membership of the group, and is otherwise protected against those risks;
      (b) it can be properly supervised by the Regulatory Authority;
      (c) it provides the authority with information about the structure and financial position of the group; and
      (d) it assesses the effect of, and notifies the authority of, certain transactions within the group.
      Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

      • PINS 10.1.2 Guidance

        1 An insurer is exposed to risks through the relationships that it has with other insurance and non-insurance companies in its group.
        2 An insurer is also subject to reporting requirements in relation to changes in its controllers. Those requirements are set out in GENE. Under GENE, an insurer may also be required to provide reports in relation to any close links it has.
        Inserted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS 10.1.3 Ch 10 in addition to other Regulatory Authority powers

      A power of the Regulatory Authority under this Chapter is in addition to the authority's other powers.

      Amended by QFCRA RM/2013-1 and Editorial changes (as from 1st January 2015).

    • PINS 10.1.4 Powers under FSR not affected

      Nothing in this Chapter affects:

      (a) the Regulatory Authority's powers under FSR, article 31, to take action to protect the interests of an insurer's policyholders or the financial system; or
      (b) its powers under FSR, article 48, to obtain documents and information.
      Inserted by QFCRA RM/2013-1 and amended by Editorial changes (as from 1st January 2015).

    • PINS 10.1.5 PINS 10.1.5 Group structure

      (1) The structure of the insurer's group must be transparent and must not hinder the effective supervision of the insurer.
      (2) The structure and risk profile of the group must not hinder the insurer's stability and solvency.
      (3) The overall governance, high-level controls and reporting lines within the group must be clear so far as they affect the insurer.

      Example

      The insurer must not be subject to material control or influence from another group member that is exercised through informal or undocumented channels.
      (4) There must be clear and certain protocols for the performance of functions for the insurer at the group level.
      Inserted by QFCRA RM/2013-1 (as from 1st January 2015).

      • PINS 10.1.5 Guidance

        The senior management of an insurer that is a member of a group remains responsible for its regulatory compliance, even if parts of it are delegated or outsourced to other group members (see CTRL, Chapter 4).

        Inserted by QFCRA RM/2013-1 (as from 1st January 2015).
        Amended by QFCRA RM/2021-1 (as from 1st July 2021)

    • PINS 10.1.6 Direction regarding capital resources

      (1) If the Regulatory Authority considers that an insurer should hold additional capital (above the amount of capital that the insurer would otherwise be required by these rules to hold) to cover risks arising because of the insurer's group membership, the authority may direct the insurer to increase its capital:
      (a) to an amount; and
      (b) within a period;
      that the authority specifies in the direction.

      Example of when Regulatory Authority might give direction regarding capital resources

      The Regulatory Authority might impose an additional restriction or requirement on an insurer:
      •    if the group is conducting an intra-group transaction that may adversely affect the solvency or financial position of the insurer
      •    if there are risks that arise from the existence of a non-regulated entity within or connected to the group and may adversely affect the solvency position of the insurer
      •    risk transfer or reinsurance arrangements within the group that impose disproportionate risks on the insurer.
      (2) A direction under subrule (1) may specify that the additional capital is to take a particular form.
      (3) An insurer must comply with a direction under subrule (1).
      Inserted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS 10.1.7 Intra-group transactions

      (1) An insurer must ensure that any material transaction with another member of its group:
      (a) is entered into on an 'arm's-length' basis; and
      (b) is on fair and reasonable terms.
      Guidance

      A single transaction or series of connected transactions that constitute a sale, purchase, exchange, loan or extension of credit, investment or guarantee involving 0.5% or less of an insurer's eligible capital as at the end of the last standard quarter (the standard quarters end on 31 March, 30 June, 30 September and 31 December) before the effective date of the transaction would not normally be considered material for the purposes of this rule.
      (2) The insurer must ensure that its books, accounts and records clearly and accurately disclose the nature and details of the transaction, including any accounting information necessary to demonstrate that the terms were fair and reasonable.
      Inserted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS 10.1.8 Certain transactions to be inquired into by insurer's governing body

      (1) An insurer that is incorporated in the QFC must not enter into a transaction of a kind described in subrule (2) unless its governing body is satisfied, after reasonable inquiry, that the transaction does not adversely affect the interests of policyholders.
      (2) The kinds of transaction are the following:
      (a) an intra-group transaction (including a sale, purchase, exchange, loan, guarantee or investment) the amount of which is 3% (or more) of the insurer's eligible capital;
      (b) a loan to a person not related to the insurer, if there is an agreement or understanding that the proceeds of the loan, or a substantial part of those proceeds, will be used to make loans to purchase assets of, or make investments in, another group member, and the amount of the loan is 3% (or more) of the insurer's eligible capital;
      (c) an intra-group reinsurance agreement, or a modification to such an agreement, if the reinsurance premium or change in the insurer's liabilities is 5% (or more) of the insurer's eligible capital;
      (d) a reinsurance agreement, or a modification to such an agreement, involving the transfer of assets from the insurer to a person not related to it, if:
      (i) there is an agreement or understanding between the insurer and that person that any part of the assets will be transferred to 1 or more other persons related to the insurer; and
      (ii) the reinsurance premium or change in the insurer's liabilities is 5% (or more) of the insurer's eligible capital;
      (e) an intra-group management agreement, service contract or cost-sharing arrangement.
      (3) A reference in subrule (2) to an insurer's eligible capital is a reference to that capital as at the end of the last standard quarter before the relevant transaction.
      (4) An insurer's governing body may delegate its responsibility under subrule (1) to the insurer's senior management if the insurer's risk management strategy and internal control framework permit the governing body to do so.
      (5) In this rule:

      loan includes the extension of credit.

      standard quarter means each 3-month period ending on 31 March, 30 June, 30 September and 31 December.
      Inserted by QFCRA RM/2013-1 and amended by Editorial changes (as from 1st January 2015).
      Amended by QFCRA RM/2021-1 (as from 1st July 2021)

    • PINS 10.1.9 Directions about certain intra-group matters

      (1) The Regulatory Authority may give an insurer a direction in relation to any of the following matters:
      (a) the insurer's treatment of intra-group transactions;
      (b) the insurer's treatment of risk concentration within the group;
      (c) supervisory reporting and disclosure of information by the insurer;
      (d) any other matter relevant to the supervision of the insurer.
      Example of when Regulatory Authority might give direction

      The Regulatory Authority might impose an additional restriction or requirement on an insurer:
      •    if the group is conducting an intra-group transaction that may adversely affect the solvency or financial position of the insurer
      •    if there are risks that arise from the existence of a non-regulated entity within or connected to the group and may adversely affect the solvency position of the insurer
      •    risk transfer or reinsurance arrangements within the group that impose disproportionate risks on the insurer.
      (2) An insurer must comply with a direction under subrule (1).
      Inserted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS 10.1.10 Notices to provide information about group financial resources

      (1) The Regulatory Authority may, by written notice, require an insurer to give it, within 90 days or a stated shorter reasonable period, a statement of the consolidated financial position of the insurer's group, made up:
      (a) as at a date specified in the notice, and
      (b) in accordance with principles stated in the notice.
      Guidance

      An insurer would normally be allowed to comply with a notice under rule 10.1.10 by providing a copy of a statement made up in compliance with an equivalent or substantially equivalent regulatory requirement to which the insurer or a subsidiary or associate is subject in another jurisdiction. If the statement is not in English, the insurer must also provide a certified translation of the statement into English (see GENE, r 5.1.2).
      (2) The Regulatory Authority may, by written notice, require an insurer to give it, within 90 days or a stated shorter reasonable period, information about any of the following:
      (a) another entity or other entities in the insurer's group;
      (b) the structure of its group;
      (c) the relationships between entities in its group;
      (d) the procedures and controls to manage group risk in the group;
      (e) any other matter relevant to the supervision of the insurer.
      Example of when Regulatory Authority might require additional information

      The Regulatory Authority might require an insurer to give it additional information:
      •    if the group is conducting an intra-group transaction that may adversely affect the solvency or financial position of the insurer
      •    if there are risks that arise from the existence of a non-regulated entity within or connected to the group and may adversely affect the solvency position of the insurer.
      (3) An insurer must comply with a requirement under subrule (1) or (2).

      Note See FSR, art 48 (Power to obtain documents and information).
      Inserted by QFCRA RM/2013-1 (as from 1st January 2015).

    • PINS 10.1 Application and Purpose [Deleted]

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

    • PINS 10.2 PINS 10.2 Group Financial Resources [Deleted]

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

      • PINS 10.2.1 [Deleted]

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

      • PINS 10.2.2 PINS 10.2.2 [Deleted]

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

        • PINS 10.2.2 Guidance [Deleted]

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

      • PINS 10.2.3 [Deleted]

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

    • PINS 10.3 PINS 10.3 Transactions within a Group [Deleted]

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

      • PINS 10.3.1 PINS 10.3.1 [Deleted]

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

        • PINS 10.3.1 Guidance [Deleted]

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

      • PINS 10.3.2 [Deleted]

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

    • PINS 10.4 PINS 10.4 Significant Transactions other than Group Transactions [Deleted]

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

      • PINS 10.4.1 [Deleted]

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