Prudential Regulation Authority Rulebook

13.1

An admissible asset is:

1. (1) investments that are, or amounts owed arising from the disposal of:
1. (a) debt securities, bonds and other money and capital market instruments;
2. (b) loans;
3. (c) shares and other variable yield participations;
4. (d) units in:
1. (i) collective investment schemes falling within the UCITS Directive;
2. (ii) non-UCITS retail schemes;
3. (iii) recognised schemes; or
4. (iv) any other collective investment scheme where the firm’s investment in the scheme is sufficiently small to be consistent with a prudent overall investment strategy, having regard to the investment policy of the scheme and the information available to the firm to enable it to monitor the investment risk being taken by the scheme;
5. (e) land, buildings and immovable property rights; or
6. (f) an approved derivative or quasi-derivative transaction that satisfies the conditions in Insurance Company – Risk Management 6.2 or a stock lending transaction in respect of which the conditions in Insurance Company – Risk Management 8.2 have been met.
2. (2) debts and claims that are:
1. (a) debts owed by reinsurers, including reinsurers' shares of technical provisions (but excluding amounts recoverable from an ISPV);
2. (b) deposits with and debts owed by ceding undertakings;
3. (c) debts owed by policyholders and intermediaries arising out of direct and reinsurance operations (except where overdue for more than 3 months and other than commission prepaid to agents or intermediaries);
4. (d) for general insurance business only, claims arising out of salvage and subrogation;
5. (e) for long-term insurance business only, advances secured on, and not exceeding the surrender value of, contracts of long-term insurance issued by the firm;
6. (f) tax recoveries; or
7. (g) claims against the compensation scheme or any analogous scheme in any EEA state.
3. (3) assets that are:
1. (a) tangible fixed assets, other than land and buildings;
2. (b) cash at bank and in hand, deposits with credit institutions and any other bodies authorised to receive deposits;
3. (c) for general insurance business only, deferred acquisition costs;
4. (d) accrued interest and rent, other accrued income and prepayments; or
5. (e) for long-term insurance business only, reversionary interests.

13.2

Subject to 13.3 below a unit in a collective investment scheme is only admissible for the purposes of 13.1 above if it falls within 13.1(1)(d), notwithstanding that it may also fall into one or more other categories in 13.1.

13.3

A derivative, quasi-derivative or stock lending transaction is only admissible for the purposes of 13.1 if it falls within 13.1(1)(f), notwithstanding that it may also fall into one or more other categories in 13.1.