PIN 9.3 PIN 9.3 Run-off plans
This section applies to:(a)
Insurersthat are in run-off or that maintain Cellsor Long-Term Insurance Fundsthat are in run-off;(b) Insurersthat go into run-off or that place Cellsor Long-Term Insurance Fundsinto run-off;(c) Insurersthat make a decision to go into run-off or to place a Cellor Long-Term Insurance Fundinto run-off; and(d) Insurerswhose permission to effect Contracts of Insurancein respect of their entire Insurance Businessor in respect of the entire business of a Cellor Long-Term Insurance Fundis withdrawn by the DFSA.
Insurertakes a decision to go into run-off or to place a Cellor a Long-Term Insurance Fundinto run-off, the Insurermust, at the same time as the notice referred to in PIN Rule 9.2.2, provide the DFSAwith a written run-off plan in respect of the Insurance Businessbeing placed into run-off.
DFSAwithdraws an Insurer'spermission to effect Contracts of Insurancein respect of the Insurer'sentire Insurance Businessor the entire Insurance Businessof a Cellor Long-Term Insurance Fund, the Insurermust, within 28 days of the written notice of withdrawal of permission (or, if later, the period specified in that notice), provide the DFSAwith a written run-off plan in respect of that Insurance Business.
A run-off plan provided to the
DFSAin accordance with this section must cover the period until all liabilities to policyholders relating to the Insurance Businessin run-off are met and must include:(a) an explanation of how, or to what extent, all liabilities to policyholders will be met in full as they fall due;(b) an explanation of how, or to what extent, the Insurerwill maintain its compliance with the requirements of PIN chapter 4 until such time as all liabilities to policyholders are met;(c) a description, appropriate to the scale and complexity of the Insurer'sbusiness, of the Insurer'sbusiness strategy;(d) financial projections showing, in a form appropriate to the scale and complexity of the Insurer'soperations, the forecast financial position of the Insureras at the end of each reporting period during the period to which the run-off plan relates; and(e) an assessment of the sensitivity of the financial position of the Insurerto stress arising from realistic scenarios relevant to the circumstances of the Insurer.
Insurer's Insurance Businessin run-off relates to a Cellor a Long-Term Insurance Fundof that Insurer, the run-off plan must deal with the matters set out in PIN Rule 9.3.4 so far as they relate to that Cellor Long-Term Insurance Fund.
PIN 9.3.6 PIN 9.3.6
Insurerthat has provided a written run-off plan to the DFSAmust monitor the matters contained in the run-off plan and must notify the DFSApromptly and in writing of any significant departure from the run-off plan.
PIN 9.3.6 Guidance
Insurershould decide whether a matter constitutes a significant departure from a run-off plan, having regard to the nature and size of the matter and its materiality relative to the size and complexity of the Insurerand, where relevant, the size and complexity of the Cellor Long-Term Insurance Fundconcerned. The following matters will normally be considered as representing a significant departure from a run-off plan:a. significant revision of the Insurer'sstrategy for managing risks, and in particular its strategy for the use of reinsurance;b. a significant deterioration in the Insurer'sclaims experience, financial position or solvency position (the amount by which the Insurer'scapital resources, determined in accordance with the provisions of PIN chapter 4 relevant to that Insurer, exceed the applicable minimum capital requirements set out in that chapter); orc. any other transaction or circumstance that is likely to have a material effect upon the Insurer'ssolvency position.
Insurerhas notified a matter to the DFSAin accordance with PIN Rule 9.3.6, the DFSAmay by notice in writing require the Insurerto provide an amended run-off plan. The Insurermust provide an amended run-off plan within 28 days of receipt of the notice, unless the notice specifies a longer period.