Prudential Regulation Authority Rulebook

3.1

Notwithstanding that the liability of a reinsured member to a policyholder is unaffected by an approved reinsurance to close for the purposes of the Solvency II Firms Sector of the PRA Rulebook:

1. (1) for an approved reinsurance to close which is not to a subsidiary undertaking of the Society:
1. (a) a contract of insurance reinsured under an approved reinsurance to close must be treated as if the reinsuring member and not the reinsured member had effected the original contract of insurance; and
2. (b) any payment received by a member as consideration for or in connection with an approved reinsurance to close must be treated as a Lloyd’s member’s contribution and not as premium or as a reinsurance recovery.
2. (2) for an approved reinsurance to close to a subsidiary undertaking of the Society, a contract of insurance reinsured under that approved reinsurance to close must be treated as if the reinsured member had not effected the original contract of insurance but:
1. (a) for the purposes of the calculation of the Lloyd’s SCR, general insurance business carried on by members and former underwriting members which has been reinsured to a subsidiary undertaking of the Society under an approved reinsurance to close must be treated as reinsured to a third party; and
2. (b) for the purposes of calculating the SCR of any subsidiary undertaking of the Society which is a UK Solvency II firm, the approved reinsurance to close must be treated as a reinsurance.