PINS 8.1.3 Value of insurer's assets to match its insurance liabilities

(1) An insurer must hold supporting assets of a value at least equal to the amount of its insurance liabilities.
(2) The assets:
(a) must have characteristics of safety, yield and marketability that are appropriate to the nature, scale and complexity of the insurer's business;
(b) must be diversified;
(c) must be adequately spread; and
(d) must be of a sufficient amount, and of an appropriate currency and term, to ensure that the cash inflows from the assets meet the expected cash outflows from the insurer's insurance liabilities as they fall due.
(3) In determining the expected cash outflows for subrule (2) (d), the insurer must take into account any options that exist in the insurer's contracts of insurance.
(4) This rule does not apply to assets held to cover index-linked liabilities.
(5) However, this rule applies to assets held to cover the guaranteed portion of any index-linked long-term insurance contract that includes a guarantee of investment performance or some other guaranteed benefit.
Inserted by QFCRA RM/2013-1 (as from 1st January 2015).