Entire Section

  • PIN A5.10 PIN A5.10 Hybrid cellular capital adjustment

    • PIN A5.10 Guidance

      1. This section acts to limit hybrid cellular capital to 15% of an Insurer's adjusted cellular equity in respect of a Cell.
      2. The purpose of the hybrid cellular capital adjustment is to limit the extent to which an Insurer may rely for its Adjusted Cellular Capital Resources in respect of a Cell on 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 Cell is financed by debt rather than by the investor's own capital.

      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN A5.10.1

      Subject to PIN Rule A5.10.2, hybrid cellular capital includes the following items:

      (a) subordinated debt;
      (b) preference shares;
      (c) Owners' Equity in a Takaful Insurer, of the type described in PIN Rule A5.7.2; and
      (d) Cell Shares issued by a Cell to an investor who stands in the position of a Holding Company in 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.

      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN A5.10.2

      Hybrid cellular capital excludes any instrument that is not attributable to a Cell.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN A5.10.3

      Subject to PIN Rule A5.10.4, an Insurer must calculate the hybrid cellular capital adjustment in respect of a Cell as the amount by which the total amount of hybrid cellular capital exceeds 15% of adjusted non-cellular equity.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]

    • PIN A5.10.4

      The DFSA may at its discretion and on the application of an Insurer, permit that Insurer to 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%.


      Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]