[^F1 PART 1 Introductory ^F1]

Citation, commencement and extent _I1,I2

1. —(1) These Regulations may be cited as the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023.

(2) These Regulations come into force for the purposes of regulation 7 on 1st April 2024 and for all other purposes on 30th June 2024.

(3) These Regulations extend to England and Wales, Scotland and Northern Ireland.

[^F2 PART 2 Prudential requirements ^F2]

[^F3 Chapter 1 Matching adjustment ^F3]

[^F4 Interpretation of Chapter 1 ^F4]_I3,I4

2. —(1)[^F5 In this Chapter ^F5] —

“ assigned portfolio of assets ” means the portfolio referred to in regulation 4(3);

“ credit rating ” means a credit rating defined in Article 3(1) of Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies( 2 ) issued or endorsed by a credit rating agency in accordance with Article 4 of that Regulation;

“ credit rating agency ” means a credit rating agency registered by the FCA in accordance with Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies or certified by the FCA in accordance with Article 5 of that Regulation;

“ insurance undertaking ” means an insurance undertaking, as defined in section 417(1) of FSMA 2000( 3 ), in relation to which PRA rules provide for the calculation of a best estimate of future cash flows using the relevant risk-free interest rate term structure;

“ PRA-authorised person ” has the meaning given in section 2B(5) of FSMA 2000( 4 );

“ PRA rules ” means the rules made by the PRA under FSMA 2000, as they have effect from time to time;

“ reinsurance undertaking ” means a reinsurance undertaking, as defined in section 417(1) of FSMA 2000, in relation to which PRA rules provide for the calculation of a best estimate of future cash flows using the relevant risk-free interest rate term structure.

(2) Any other term used [^F6 in this Chapter ^F6] which is used in PRA rules applicable to insurance and reinsurance undertakings has the same meaning as in those rules.

PRA duty to publish technical information _I5,I6

3. —(1) Every quarter the PRA must publish on its website—

(a) for each currency, duration, credit quality and asset class the PRA considers appropriate, a fundamental spread for the calculation of the matching adjustment to the relevant risk-free interest rate term structure used to calculate the best estimate for a portfolio of long-term insurance or reinsurance obligations, and

(b) such other information as the PRA considers appropriate relating to the calculation of—

(i) technical provisions, and

(ii) the SCR on the basis of the standard formula.

(2)Paragraph 17(9)(b) of Schedule 6A to the Bank of England Act 1998( 5 ) (restriction on delegation of functions by the Prudential Regulation Committee) does not prohibit the making of a rule that imposes an obligation on PRA-authorised persons by reference to information published by the PRA under this regulation.

Application of the matching adjustment _I7,I8

4. —(1) This regulation applies where an insurance or reinsurance undertaking (“the undertaking”) applies to the PRA to disapply or modify its rules, such that the applicant undertaking may apply a matching adjustment to the relevant risk-free interest rate term structure in order to calculate the best estimate of a portfolio of long-term insurance or reinsurance obligations.

(2) Where this regulation applies, the PRA must grant the application where each of the conditions set out in paragraphs (3) to (9) and (11) is met.

(3) The undertaking must assign a portfolio of assets, consisting of bonds or other assets with similar cash flow characteristics, to cover the best estimate of the portfolio of insurance or reinsurance obligations.

(4) The credit quality of the assets in the portfolio referred to in paragraph (3) must be capable of being assessed through a credit rating or the undertaking’s internal credit assessment of a comparable standard.

(5) The undertaking must maintain the assignment referred to in paragraph (3) over the lifetime of the obligations, except for the purpose of maintaining the replication of expected cash flows between assets and liabilities where the cash flows have materially changed.

(6) The portfolio of long-term insurance or reinsurance obligations to which the matching adjustment is applied and the assigned portfolio of assets must be—

(a) identified, and

(b) organised and managed separately from the other activities of the undertaking.

(7) Subject to paragraph (8), the expected cash flows of the assigned portfolio of assets must replicate each of the expected cash flows of the portfolio of insurance or reinsurance obligations in the same currency.

(8) Any mismatch between the expected cash flows referred to in paragraph (7) must not give rise to risks which are material in relation to the risks inherent in the insurance or reinsurance business to which the matching adjustment is applied.

(9) The cash flows of the assigned portfolio of assets must be fixed and not capable of being changed by the issuers of the assets or any third parties, except—

(a) where—

(i) the risks to the quality of matching are not material, and

(ii) only such limited proportion of the portfolio as the PRA may determine is affected;

(b) where the cash flows of the assigned portfolio of assets are linked to inflation, and the assets replicate the cash flows of the portfolio of insurance or reinsurance obligations that are linked to inflation; or

(c) in a case where issuers of the assets or third parties have the right to change the cash flows of an asset, where sufficient compensation is paid to secure an equivalent cash flow by reinvesting the compensation in an asset of equivalent or better quality.

(10) In paragraph (9)(a), whether a risk is material is to be determined in accordance with any PRA rules referred to in regulation 7(b) .

(11) The undertaking’s application must comply with the requirements of, or imposed under, section 138BA of FSMA 2000( 6 ) (disapplication or modification of rules in individual cases) and the undertaking must comply with rules referred to in regulation 7(a) .

(12) This regulation does not prevent the PRA from exercising its powers under section 138BA of FSMA 2000 where an undertaking to whom the PRA has granted a permission to disapply or modifyPRA rules in accordance with paragraph (2) has failed to meet any of the conditions—

(a) set out in paragraphs (3) to (9) and (11),

(b) set out in rules referred to in regulation 7(b), or

(c) imposed under section 138BA(4)(a) of FSMA 2000.

Calculation of the matching adjustment _I9,I10

5. —(1) For each currency the matching adjustment referred to in regulation 4(1) must be equal to the difference of—

(a) the annual effective rate, calculated as the single discount rate that, where applied to the cash flows of the portfolio of insurance or reinsurance obligations, results in a value that is equal to the value of the portfolio of assigned assets; and

(b) the annual effective rate, calculated as the single discount rate that, where applied to the cash flows of the portfolio of insurance or reinsurance obligations, results in a value that is equal to the value of the best estimate of the portfolio of insurance or reinsurance obligations where the time value of money is taken into account using the basic relevant risk-free interest rate term structure.

(2) For the purpose of the calculation referred to in paragraph (1)—

(a) “assigned assets” only includes assets whose expected cash flows are required to replicate the cash flows of the portfolio of insurance and reinsurance obligations, excluding any assets in excess of that;

(b) valuations must comply with any requirements set out in PRA rules.

(3) In paragraph (2), the “expected cash flow” of an asset means the cash flow of the asset adjusted to allow for the probability of default of the asset that corresponds to the element of the fundamental spread set out in regulation 6(3)(a) or, where no reliable credit spread can be derived from the default statistics, the portion of the long term average of the spread over the basic relevant risk-free interest rate (as provided in regulation 6 (4) and (5)).

(4) The matching adjustment must not include the fundamental spread (as calculated in accordance with regulation 6 ) reflecting the risks retained by the insurance or reinsurance undertaking.

(5) The deduction of the fundamental spread under paragraph (4) from the result of the calculation set out in paragraph (1) must include only the portion of the fundamental spread (as calculated in accordance with regulation 6 ) that has not already been reflected in the adjustment to the cash flows of the assigned portfolio of assets in accordance with paragraphs (1) to (3).

Calculation of fundamental spread _I11,I12

6. —(1) The fundamental spread referred to in regulation 5 must be calculated in a transparent, prudent, reliable and objective manner that is consistent over time and based on relevant indices where available.

(2) The fundamental spread must be calculated in accordance with paragraphs (3) to (9).

(3) The fundamental spread must be equal to the sum of the following—

(a) the credit spread corresponding to the probability of default of the assets, and

(b) the credit spread corresponding to the expected loss resulting from downgrading of the assets.

(4) For exposures to the central government of the United Kingdom and the Bank of England, where the fundamental spread would otherwise be lower than 30% of the long-term average of the spread over the risk-free interest rate of assets of the same duration, credit quality and asset class, as observed in financial markets (the “average spread”), the fundamental spread must be 30% of the average spread.

(5) For assets other than exposures to the central government of the United Kingdom and the Bank of England, where the fundamental spread would otherwise be lower than 35% of the long-term average of the spread over the risk-free interest rate of assets of the same duration, credit quality and asset class, as observed in financial markets (the “average spread”), the fundamental spread must be 35% of the average spread.

(6) For the purposes of this regulation—

(a) the calculation of the “credit spread” must be based on the assumption that in case of default 30% of the market value of the assets can be recovered;

(b) the “probability of default” must be based on long-term default statistics that are relevant for the asset in relation to its duration, credit quality and asset class;

(c) the “expected loss” must be based on long-term statistics that are relevant to changes in the credit quality of the asset and correspond to the probability-weighted loss the insurance or reinsurance undertaking incurs where the asset is downgraded to a lower credit quality and is replaced immediately afterwards, and the calculation of the expected loss must be based on the assumption that the replacing asset meets all of the following criteria—

(i) the replacing asset has the same cash flow pattern as the replaced asset before downgrade;

(ii) the replacing asset belongs to the same asset class as the replaced asset;

(iii) the replacing asset has the same credit quality as the replaced asset before downgrade or a higher one;

(d) the “long-term average of the spread over the risk-free interest rate” must be based on data relating to the previous 30 years;

(e) the methods to derive the fundamental spread of a bond must be the same for each currency and each country and may be different for government bonds and for other bonds.

(7) For the purposes of paragraph (6)(b) or (c), where no reliable credit spread can be derived from the statistics, the fundamental spread must be equal to the portion of the long-term average of the spread over the risk-free interest rate set out in paragraph (4) or (5).

(8) Where part of the data referred to in paragraph (6)(d) is not available or where the available data is not reliable, constructed data based on prudent assumptions may be used; and the constructed data must be based on available and reliable data relating to the previous 30 years.

(9) The fundamental spread calculated in accordance with this regulation may be increased in accordance with PRA rules referred to in regulation 7(e) or 7(f) .

Power of PRA to make rules _I13

7. Notwithstanding regulations 4 to 6, the PRA’s power to make general rules under section 137G of FSMA 2000( 7 ) (the PRA’s general rules) continues to include power to make rules—

(a) setting out conditions, in addition to those set out in regulation 4, under which an insurance or reinsurance undertaking is eligible to apply a matching adjustment, limited to conditions about—

(i) the eligibility of insurance or reinsurance obligations for inclusion in the portfolio to which the matching adjustment is applied; and

(ii) the management of risks in relation to that portfolio or the assigned portfolio of assets;

(b) setting out the circumstances in which a risk is to be treated as material for the purposes of regulation 4(9) (a);

(c) requiring an insurance or reinsurance undertaking to limit the value of the matching adjustment for the period during which the undertaking has failed to meet any of the conditions—

(i) set out in paragraphs (3) to (9) and (11) of regulation 4,

(ii) set out in rules made under paragraph (b), or

(iii) imposed under section 138BA(4)(a) of FSMA 2000;

(d) concerning adjustments to be made by an insurance or reinsurance undertaking to any information published by the PRA under regulation 3 (1)(a) to reflect more precisely the credit quality of assets;

(e) requiring an insurance or reinsurance undertaking whose assigned portfolio of assets includes assets without fixed cash flows (excluding assets of the kind specified in regulation 4(9)(b) or (c)) to increase the fundamental spread calculated in accordance with regulation 6 by an amount to be determined in accordance with the rules;

(f) permitting an insurance or reinsurance undertaking to increase the fundamental spread calculated in accordance with regulation 6 and any applicable rules made under paragraph (e) where the undertaking considers an increase is necessary to ensure that the fundamental spread covers all the risks retained by the undertaking.

[^F7 CHAPTER 2 Risk margin

Interpretation of Chapter 2

7A.—(1) In this Chapter—

“ insurance undertaking ” has the same meaning as in section 417(1) of FSMA 2000 ( 5 ) ;

“ PRA rules ” means the rules made by the PRA under FSMA 2000 as they have effect from time to time;

“ reinsurance undertaking ” has the same meaning as in section 417(1) of FSMA 2000.

(2) Any other term used in this Chapter which is used in PRA rules applicable to insurance and reinsurance undertakings has the same meaning as in those rules.

Calculation of risk margin

7B. Where PRA rules provide for a risk margin to be calculated separately from the best estimate, the risk margin for the whole portfolio of insurance and reinsurance obligations of an insurance or reinsurance undertaking must be calculated in accordance with the following formula—

;

where—

(a) “RM” denotes risk margin;

(b) “CoC” denotes the cost-of-capital rate, which equals 4%;

(c) the sum covers all integers including zero;

(d) “SCR(t)” denotes the SCR of the reference undertaking after t years, calculated in accordance with PRA rules;

(e) “λ” denotes the risk tapering factor, and equals—

(i) 0.9 for long-term insurance and reinsurance obligations, and

(ii) 1.0 for general insurance and reinsurance obligations;

(f) “ ” denotes the risk tapering factor to the power of t years;

(g) “ ” denotes the floor of the risk tapering factor, and equals 0.25;

(h) “r(t+1)” denotes the basic relevant risk-free interest rate for the maturity of t + 1 years, derived from the basic relevant risk-free interest rate term structure.

Power of PRA to make rules

7C. Notwithstanding regulation 7B, the PRA’s power to make general rules under section 137G of FSMA 2000 ( 6 ) continues to include power to make rules permitting an insurance or reinsurance undertaking to use simplified methods to calculate risk margin which are proportionate to the nature, scale and complexity of the risk underlying its insurance or reinsurance obligations. ^F7]

[^F8 PART 3 Enforcement and review ^F8]

PRA’s functions and powers under FSMA 2000 _I14,I15

8. —(1)FSMA 2000 applies in relation to regulations 5 (calculation of the matching adjustment) [^F9 , 6 (calculation of fundamental spread) and 7B (risk margin) ^F9] with the modifications set out in paragraphs (2) to (8).

(2) Section 39( 8 ) (exemption of appointed representatives) applies as if in subsection (4)—

(a) “or” at the end of paragraph (a) were omitted;

(b) after paragraph (a) there were inserted—

“ (aa) regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023, or ” .

(3) Section 66B( 9 ) (misconduct: action by the PRA) applies as if in subsection (4)—

(a) “or” at the end of paragraph (a) were omitted;

(b) after paragraph (a) there were inserted—

“ (aa) imposed by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023, or ” .

(4) Section 168( 10 ) (appointment of persons to carry out investigations in particular cases) applies as if in subsection (4)—

(a) “or” at the end of paragraph (jc) were omitted;

(b) after paragraph (jc) there were inserted—

“ (jd) an authorised person may have contravened regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023; or ” .

(5) Section 204A( 11 ) (meaning of “ relevant requirement ” and “ appropriate regulator ”) applies as if—

(a) in subsection (2)—

(i) “or” at the end of paragraph (c) were omitted;

(ii) “or” were inserted at the end of paragraph (d);

(iii) after paragraph (d) there were inserted—

“ (e) by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023. ” ;

(b) in subsection (3), after paragraph (f) there were inserted—

“ (g) a requirement under regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023. ” .

(6) Section 380( 12 ) (injunctions) applies as if—

(a) in subsection (6), in paragraph (a)—

(i) “or” at the end of sub-paragraph (v) were omitted;

(ii) “or” were inserted at the end of sub-paragraph (vi);

(iii) after sub-paragraph (vi) there were inserted—

“ (vii) which is imposed by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023, ” ;

(b) in subsection (8)—

(i) “or” at the end of paragraph (b) were omitted;

(ii) “or” were inserted at the end of paragraph (c);

(iii) after paragraph (c) there were inserted—

“ (d) a requirement under regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements)) Regulations 2023. ” .

(7) Section 382( 13 ) (restitution orders) applies as if—

(a) in subsection (9), in paragraph (a)—

(i) “or” at the end of sub-paragraph (iii) were omitted;

(ii) “or” were inserted at the end of sub-paragraph (iv);

(iii) after sub-paragraph (iv) there were inserted—

“ (v) which is imposed by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023; ” ;

(b) in subsection (11)—

(i) “or” at the end of paragraph (b) were omitted;

(ii) “or” were inserted at the end of paragraph (c);

(iii) after paragraph (c) there were inserted—

“ (d) a requirement which is imposed by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023. ” .

(8) Section 384( 14 ) (power of FCA or PRA to require restitution) applies as if—

(a) in subsection (7)—

(i) “or” at the end of paragraph (c) were omitted;

(ii) “or” were inserted at the end of paragraph (d);

(iii) after paragraph (d) insert there were inserted—

“ (e) a requirement which is imposed by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023. ” ;

(b) in subsection (9)—

(i) “or” at the end of paragraph (b) were omitted;

(ii) “or” were inserted at the end of paragraph (c);

(iii) after paragraph (c) there were inserted—

“ (d) a requirement which is imposed by regulation [^F10 5, 6 or 7B ^F10] of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023. ” .

Review _I16,I17

9. —(1) The Treasury must from time to time—

(a) carry out a review of the regulatory provision contained in regulations 3 to 8, and

(b) publish a report setting out the conclusions of the review.

(2) The first report must be published before the end of the period of 5 years beginning with 1st April 2024.

(3) Subsequent reports must be published at intervals not exceeding 5 years.

(4) Each report must in particular—

(a) set out the objectives intended to be achieved by the regulatory provision referred to in paragraph (1)(a),

(b) assess the extent to which those objectives are achieved,

(c) assess whether those objectives remain appropriate, and

(d) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

(5) In this regulation “ regulatory provision ” has the same meaning as in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015( 15 ) (duty to review regulatory provisions in secondary legislation) (see section 32 of that Act).

[^F11 PART 4 Overseas Insurance Regime

Interpretation

10. In this Part—

“ group ” has the same meaning as in the glossary of the PRA rules;

“ insurance undertaking ” has the meaning given in section 417(1) of FSMA 2000 ( 5 ) ;

“ insurance group ” means a group which contains one or more insurance undertakings or reinsurance undertakings;

“ overseas insurance undertaking ” means an undertaking with its head office in an overseas jurisdiction which if it was carrying on its activities in the United Kingdom would require authorisation for the regulated activity of effecting or carrying out contracts of insurance as principal under FSMA 2000;

“ overseas jurisdiction ” means a country or territory outside the United Kingdom or Gibraltar;

“ overseas reinsurance undertaking ” means an undertaking with its head office in an overseas jurisdiction which if it was carrying on its activities in the United Kingdom would require authorisation for the regulated activity of effecting or carrying out contracts of insurance that are limited to reinsurance contracts as principal under FSMA 2000;

“ PRA rules ” means the rules made by the PRA under FSMA 2000, as they have effect from time to time;

“ reinsurance undertaking ” has the meaning given in section 417(1) of FSMA 2000;

“ territory ” includes the European Union and any other international organisation or authority comprising countries or territories.

Designation of overseas jurisdiction

11.—(1) The Treasury may by regulations designate an overseas jurisdiction in relation to one or more of regulations 12, 13 or 14 (effects of the overseas insurance regime) (“ overseas insurance regulations ”).

(2) The Treasury may make overseas insurance regulations only if they consider that those regulations are compatible with—

(a) the protection of those who are, or may become, policyholders of an insurance undertaking or a reinsurance undertaking,

(b) the safety and soundness of insurance undertakings and reinsurance undertakings, and

(c) one or both of—

(i) promoting effective competition in the interests of consumers in financial services and markets, or

(ii) facilitating the international competitiveness of the economy of the United Kingdom and its growth in the medium to long term.

(3) When considering whether to designate an overseas jurisdiction, the Treasury may, in addition to any other matter they consider relevant, have regard to the law and practice of that overseas jurisdiction in relation to the following—

(a) the authorisation of undertakings effecting or carrying out contracts of insurance as principal;

(b) the supervision of, and enforcement of prudential requirements applying to, undertakings effecting or carrying out contracts of insurance as principal, including such supervision and enforcement at insurance group level;

(c) the holding of financial resources for the safety and soundness, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal, and for the protection of policyholders;

(d) the assessment, and disclosure, of the financial position, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal;

(e) the sound and prudent management, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal, such as requirements to have in place systems for governance, internal control and risk management;

(f) the handling and sharing of confidential information by public authorities (including any person currently or previously employed or instructed by them) supervising undertakings effecting or carrying out contracts of insurance as principal, including the sharing of information by such public authorities with other public authorities.

(4) In this regulation, “ consumer ” has the meaning given by section 1G(1) of FSMA 2000 ( 6 ) .

Effect of designation: reinsurance contracts

12.—(1) Where regulations are in force under regulation 11 in respect of an overseas jurisdiction in relation to this regulation, the PRA must treat a reinsurance contract entered into by an insurance undertaking or reinsurance undertaking with an overseas reinsurance undertaking in that jurisdiction in the same manner as a non-overseas reinsurance contract for the purposes of the prudential regulation of the insurance undertaking or reinsurance undertaking.

(2) In this regulation, “ non-overseas reinsurance contract ” means a reinsurance contract entered into by an insurance undertaking or reinsurance undertaking with an insurance undertaking or reinsurance undertaking.

Effect of designation: insurance group capital requirements calculation

13.—(1) This regulation has effect where regulations are in force under regulation 11 in respect of an overseas jurisdiction (“the relevant overseas jurisdiction”) in relation to this regulation.

(2) Where this regulation has effect and paragraph (3) does not apply, the PRA must permit an insurance group that contains an overseas insurance undertaking or overseas reinsurance undertaking in the relevant overseas jurisdiction to take account of the law of the relevant overseas jurisdiction in the areas mentioned in paragraph (4) for the purposes of calculating the insurance group’s capital requirements.

(3) This paragraph applies where the PRA requires an insurance group to calculate its capital requirements on the basis exclusively of consolidated accounts (referred to as method 1 in the PRA rules).

(4) The areas of law mentioned in this paragraph are—

(a) the level of regulatory capital required to be held, and

(b) the types of capital eligible to meet that level.

Effect of designation: insurance group supervision

14.—(1) This regulation has effect where regulations are in force under regulation 11 in respect of an overseas jurisdiction (“the relevant overseas jurisdiction”) in relation to this regulation.

(2) Where this regulation has effect and paragraph (3) applies, the PRA must rely on the prudential supervision of an insurance group by the supervisory authority in the relevant overseas jurisdiction for the purposes of prudential supervision of the insurance group.

(3) This paragraph applies where—

(a) an insurance group has an ultimate parent with its head office in the relevant overseas jurisdiction,

(b) the sum of the balance sheet totals of all insurance undertakings and reinsurance undertakings in the insurance group is not greater than the balance sheet total of the parent undertaking less that sum,

(c) in the view of the PRA, the insurance group is subject to prudential supervision by the supervisory authority in the relevant overseas jurisdiction in accordance with the law of that jurisdiction relating to the prudential supervision of insurance groups, and

(d) in the view of the PRA, the PRA has entered into arrangements with that supervisory authority such that the PRA is able to comply with any restrictions on the handling and sharing of confidential information under FSMA 2000.

Overseas insurance regulations: procedure

15.—(1) The power to make regulations under this Part is exercisable by statutory instrument.

(2) A statutory instrument which contains regulations made under this Part is subject to annulment in pursuance of a resolution of either House of Parliament.

(3) Regulations made under this Part may make—

(a) incidental, supplemental, consequential, transitional, transitory or saving provision;

(b) different provision for different purposes.

Restatement of decisions

16.—(1) The following overseas jurisdictions are to be treated as designated under regulation 11 in relation to regulations 12, 13 and 14—

(a) Bermuda;

(b) each EEA State;

(c) Switzerland.

(2) The following overseas jurisdictions are to be treated as designated under regulation 11 for the purposes of regulation 13—

(a) Australia;

(b) Brazil;

(c) Canada;

(d) Japan;

(e) Mexico;

(f) the United States of America.

(3) In relation to Bermuda’s designation pursuant to paragraph (1)(a)—

(a) for the purposes of regulation 12, the term “ overseas reinsurance undertaking ” does not include a captive insurer, and

(b) for the purposes of regulations 13 and 14, the term “ insurance group ” does not include an insurance group containing a captive insurer.

(4) In paragraph (3), “ captive insurer ” means an undertaking (“ A ”) the purpose of which is to provide insurance cover exclusively or mainly for the risks of its parent undertaking, or of an undertaking belonging to the insurance group of which A is a member. ^F11]