PIN 5.7 PIN 5.7 Value of investments in subsidiaries and associates that are subject to minimum capital requirements
This section applies to all
Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]
PIN 5.7.2 PIN 5.7.2
Insureris the Parent of a Financial Group, the value of the Insurer'sinvestment in any Subsidiaryor Associatethat is an Authorised Firmor a Financial Institutionmust be taken as the amount of the Insurer'sproportionate share of that Subsidiaryor Associate's Capital Resourcesor Adjusted Capital Resourcesdetermined in accordance with PIN Rule 8.3.4(1)(b), reduced by the Insurer'sproportionate share of the Subsidiaryor Associate's Capital Requirementdetermined in accordance with PIN Rule 8.3.3(2).
PIN 5.7.2 Guidance
The impact of PIN Rule 5.7.2 is that an
Insurer'scapital resources are calculated on a basis consistent with the manner of calculation of Financial Group Capital Resources, and that capital resources required to support the capital adequacy of Groupcompanies are not used to support the individual capital adequacy of the Insureritself. The Insurer'scapital adequacy calculation is therefore also an indication of the degree of capital adequacy of the Financial Groupof which it is the Parent. In this and other Ruleswhere reference is made to a Parentfor the purposes of calculating capital adequacy of a group of companies, generally, it is a reference to the ultimate Parentwithin the group.[Added] RM46/2007 (Made 5th July 2007). [VER6/07-07]
In PIN Rule 5.7.2, the
Insurer'sproportionate share of the Subsidiary'sor Associate's Minimum Capital Requirementor equivalent means the amount of the Subsidiary'sor Associate's Minimum Capital Requirementor equivalent, multiplied by the proportion of the Subsidiary'sor Associate'stotal ownership rights that is held by the Insurer.