PIN A5.5 PIN A5.5 Hybrid non-cellular capital adjustment
PIN A5.5 Guidance1. This section acts to limit hybrid non-cellular capital to 15% of an
Insurer'sadjusted non-cellular equity.2. The purpose of the hybrid non-cellular capital adjustment is to limit the extent to which an Insurermay rely for its Adjusted Non-Cellular Capital Resourceson instruments that do not or may not constitute permanent capital of the Insurer. Such instruments include share capital contributed by a Holding Company, where the Holding Company'sinvestment is financed by debt rather than by its own capital.
Subject to PIN Rule A5.5.2, hybrid non-cellular capital includes the following items:(a) subordinated debt;(b) preference shares; and(c) ordinary shares issued by an
Insurerto a Holding Companywhose own paid-up ordinary share capital, taken together with its general reserves, is lower than that of the Insurer.
Hybrid non-cellular capital excludes any instrument that is attributable to a
Subject to PIN Rule A5.5.4, an
Insurermust calculate its hybrid non-cellular capital adjustment as the amount by which the total amount of hybrid non-cellular capital exceeds 15% of adjusted non-cellular equity.
DFSAmay at its discretion and on the application of an Insurer, permit that Insurerto apply PIN Rule A5.5.3 as though the figure of 15% was replaced with a higher figure approved in writing by the DFSA. The approved figure may not be more than the actual percentage which the hybrid non-cellular capital represents of adjusted non-cellular equity, and may not in any case exceed 30%.