• CAPI Part 10.2 CAPI Part 10.2 Notices and run-off plans

    • CAPI Division 10.2.A CAPI Division 10.2.A Ceasing to effect contracts in a category

      • CAPI 10.2.1 Firms must notify Regulatory Authority—ceasing to effect contracts in a category

        (1) This rule applies to a firm that is a QFC captive insurer if the firm ceases, or decides to cease, to effect new contracts of insurance or to renew contracts of insurance—
        (a) in a category in which the firm has previously effected contracts of insurance; or
        (b) for a cell or long term insurance fund-in a category in which the firm has previously effected contracts of insurance through the cell or long term insurance fund.

        Note Category is defined in the glossary.
        (2) A firm to which this rule applies is taken to have undergone a material change for purposes of rule 2.3.6 (Strategy and risk document — review by firm) and must—
        (a) by written notice, tell the Regulatory Authority about ceasing, or deciding to cease, to effect contracts of insurance in the category; and
        (b) if the firm's strategy and risk document is amended following a review under rule 2.3.6 — give the Regulatory Authority a copy of the amendment, together with a copy of its strategy and risk document as amended, within 10 business days after the day the amendment is approved by the firm's governing body.

        Note Any material amendment to a firm's strategy and risk document must be approved by its governing body (see rule 2.3.5 (1)).
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

    • CAPI Division 10.2.B CAPI Division 10.2.B Ceasing to effect contracts for entire captive insurance business

      • CAPI 10.2.2 Application of div 10.2.B

        This division applies to a firm that is a QFC captive insurer if the firm—

        (a) goes into, or is in, run-off or maintains a cell or long term insurance fund that is in run-off; or
        (b) makes a decision to go into run-off or to place a cell or long term insurance fund into run-off; or
        (c) has its authorisation to effect contracts of insurance for its entire captive insurance business, or for the entire captive insurance business of a cell or long term insurance fund, withdrawn by the Regulatory Authority.

        Note 1 An event or decision mentioned in this rule is a material change for purposes of rule 2.3.6 (Strategy and risk document — review by firm) and the firm must review and amend its strategy and risk document.

        Note 2 Any material amendment to a firm's strategy and risk document must be approved by its governing body (see rule 2.3.5 (1)).

        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

      • CAPI 10.2.3 Firms must notify Regulatory Authority — events and decisions

        (1) A firm to which this division applies must, by written notice, tell the Regulatory Authority about an event or decision in rule 10.2.2 (a) or (b).
        (2) The notice must be given within 28 days after—
        (a) the firm, or cell or long term insurance fund that it maintains, goes into run-off; or
        (b) the firm makes the decision to go into run-off or place the cell or long term insurance fund into run-off.
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

      • CAPI 10.2.4 Run-off plan — firm decides to go into run-off

        (1) If a firm decides to go into run-off, or to place a cell or a long term insurance fund into run-off, the firm must give the Regulatory Authority a written run-off plan for the captive insurance business, cell or long term insurance fund being placed into run-off.
        (2) The run-off plan must be given at the same time the notice in rule 10.2.3 is given.
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

      • CAPI 10.2.5 Run-off plan — Regulatory Authority withdraws firm's authorisation

        (1) This rule applies if the Regulatory Authority withdraws a firm's authorisation to effect contracts of insurance for—
        (a) its entire captive insurance business; or
        (b) the entire captive insurance business of a cell or long term insurance fund.
        (2) A firm must give the Regulatory Authority a written run-off plan for the captive insurance business of the firm, cell or long term insurance fund.
        (3) The run-off plan must be given within 28 days after the firm receives the notice of withdrawal of the authorisation unless the notice specifies a longer period.
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

      • CAPI 10.2.6 Period of run-off plan

        (1) A firm must ensure that a run-off plan given to the Regulatory Authority covers the period until all liabilities to policyholders relating to the captive insurance business in run-off are met.
        (2) The run-off plan must include—
        (a) an explanation of how, and the extent to which, liabilities to policyholders will be met in full as they fall due; and
        (b) an explanation of how, and the extent to which, the firm will maintain its compliance with the requirements of these rules until all liabilities to policyholders are met; and
        (c) a description, appropriate to the scale and complexity of the firm's business, of its business strategy; and
        (d) financial projections showing, in a form appropriate to the scale and complexity of the firm's operations, the forecast financial position of the firm as at the end of each reporting period during the period covered by the run-off plan; and
        (e) an assessment of the sensitivity of the financial position of the firm to stress arising from realistic scenarios relevant to the circumstances of the firm; and
        (f) details of planned run-off reinsurance protections and the extent to which the protections match the scenarios mentioned in paragraph (e); and
        (g) details of the claims handling and reserving strategy; and
        (h) details of the cost of the management of the run-off.
        (3) For a cell or long term insurance fund in run-off, the run-off plan must deal with the matters in subrule (2) so far as they relate to the cell or long term insurance fund.
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

      • CAPI 10.2.7 Firms to monitor run-off plan etc

        (1) A firm that has given a run-off plan to the Regulatory Authority must monitor the matters in the plan.
        (2) If there is a significant departure from the run-off plan, the firm must, in writing, immediately tell the Regulatory Authority, but by no later than the second business day after the day the departure happens or starts.

        Note Writing and business day are defined in the glossary.
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)

      • CAPI 10.2.8 Amended run-off plan

        (1) If a firm gives notice of a significant departure from a run-off plan, the Regulatory Authority may, by written notice, require the firm to give to the authority an amended run-off plan.
        (2) The amended run-off plan must be given within 28 days after the firm receives the notice requiring the amended plan unless the notice specifies a longer period.
        Derived from QFCRA RM/2011-1 (as from 1st July 2011)