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 personsrelated 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)