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PIN A3.5 Guidance

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

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