PIN A5.10 PIN A5.10 Hybrid cellular capital adjustment
PIN A5.10 Guidance1. This section acts to limit hybrid cellular capital to 15% of an
Insurer'sadjusted cellular equity in respect of a Cell.2. The purpose of the hybrid cellular capital adjustment is to limit the extent to which an Insurermay rely for its Adjusted Cellular Capital Resourcesin respect of a Cellon instruments that do not or may not constitute permanent capital of that Cell. Such instruments include share capital contributed by an investor where the investor's investment in the Cellis financed by debt rather than by the investor's own capital.
Subject to PIN Rule A5.10.2, hybrid cellular capital includes the following items:(a) subordinated debt;(b) preference shares;(c)
Owners' Equityin a Takaful Insurer, of the type described in PIN Rule A5.7.2; and(d) Cell Sharesissued by a Cellto an investor who stands in the position of a Holding Companyin relation to the Cell, and whose own paid-up ordinary share capital, taken together with its general reserves, is lower than that of the Cell.
Hybrid cellular capital excludes any instrument that is not attributable to a
Subject to PIN Rule A5.10.4, an
Insurermust calculate the hybrid cellular capital adjustment in respect of a Cellas the amount by which the total amount of hybrid 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 A5.10.3 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 cellular capital represents of adjusted cellular equity, and may not in any case exceed 30%.