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PIN 8.4.1

Past version: effective up to 04/07/2007
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A DIFC Incorporated Insurer must not enter into a transaction of the type described in this Rule unless the directors of the Insurer are satisfied following reasonable enquiry that the transaction does not adversely affect the interests of policyholders. The transactions to be considered are:

(a) a sale, purchase, exchange, loan or extension of credit, guarantee or investment where the amount of the transaction, as at the end of the reporting period immediately preceding the transaction, equals or exceeds three per cent of the Insurer's surplus;
(b) a loan or extension of credit to any Person who is not Related to the Insurer, where the Insurer makes the loan or extension of credit with the agreement or understanding that the proceeds of the transaction, in whole or in substantial part, are to be used to make loans or extensions of credit to purchase assets of, or to make investments in, any Related party of the Insurer making the loans or extensions of credit, where the amount of the transaction, as at the end of the reporting period immediately preceding the transaction, equals or exceeds three per cent of the Insurer's surplus;
(c) a reinsurance agreement or modification to a reinsurance agreement in which the reinsurance premium or a change in the Insurers liabilities equals or exceeds five per cent of the Insurer's surplus;
(d) a reinsurance agreement or modification to a reinsurance agreement involving the transfer of assets from an Insurer to a Person not Related to the Insurer, if an agreement or understanding exists between the Insurer and that Person that any portion of the assets will be transferred to one or more other Persons Related to the Insurer and the reinsurance premium or a change in the Insurers liabilities equals or exceeds five per cent of the Insurer's surplus; and
(e) any management agreement, service contract or cost-sharing arrangement.

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