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).