Prudential Regulation Authority Rulebook

4.1

Subject to 4.3, a firm (other than a composite firm) must hold admissible assets of a value at least equal to the amount of:

1. (1) the technical provisions that it is required to establish under:
1. (a) 2.1; or
2. (b) 2.2; and
2. (2) its other:
1. (a) general insurance liabilities; or
2. (b) long-term insurance liabilities.

4.2

Subject to 4.3, a composite firm must ensure that it holds;

1. (1) admissible assets separately identified in accordance with Insurance Company – Internal Contagion Risk 4.1 of a value at least equal to 4.1(1)(a) and 4.1(2)(a); and
2. (2) other admissible assets (other than those excluded under 4.3) of a value at least equal to 4.1(1)(b) and 4.1(2)(b).

4.3

For the purposes of 4.1 and 4.2, a firm (other than a pure reinsurer) must exclude property-linked liabilities and index-linked liabilities and the assets held to cover them under Insurance Company – Risk Management 4.

4.4

For the purpose of determining the value of assets available to meet technical provisions and other long-term insurance liabilities in accordance with 4.1, 4.2 and Non-Solvency II Firms - With-Profits 2.1, to the extent already offset in the calculation of technical provisions, no value is to be attributed to:

1. (1) debts owed by reinsurers;
2. (2) a claim under a contract of insurance;
3. (3) tax recoveries; or
4. (4) claims against compensation funds.