Prudential Regulation Authority Rulebook

1.1

The changes to this rule are effective from 23:00 on 31/12/2020.

Unless otherwise stated, this Part applies to:

1. (1) a UK Solvency II firm; and
2. (2) in accordance with 5, third country branch undertakings except:
1. (a) Swiss general insurers; and
2. (b) SRO insurers.

1.2

In this Part, the following definitions shall apply:

material transaction

means a transaction (when aggregated with any similar transactions) in which:

1. (1) the price actually paid or received for the transfer of assets or liabilities or the performance of services; or
2. (2) the price which would have been paid or received had that transaction been negotiated at arm's length between unconnected parties;
1. exceeds:
2. (a) in the case of a firm which carries on long-term insurance business, but not general insurance business, the sum of €20,000 and 5% of the firm's liabilities arising from its long-term insurance business, excluding linked long-term liabilities and net of reinsurance ceded; or
3. (b) in the case of a firm which carries on general insurance business, but not long-term insurance business, the sum of €20,000 and 5% of the firm's liabilities arising from its general insurance business, net of reinsurance ceded; or
4. (c) in the case of a firm which carries on both long-term insurance business and general insurance business:
1. (i) where the transaction is in connection with the firm's long-term insurance business, the sum of €20,000 and 5% of the firm's liabilities arising from its long-term insurance business, excluding linked long-term liabilities and net of reinsurance ceded; and
2. (ii) in all other cases, the sum of €20,000 and 5% of the firm's liabilities arising from its general insurance business, net of reinsurance ceded.
3. and
5. (d) in the case of third country branch undertakings, a reference to the “firm’s liabilities” is to be interpreted as a reference only to the liabilities relevant to the operations effected by the third country branch.

scheme of operations

means a scheme which:

1. (1) describes the nature of the risks which the insurer is underwriting, or intends to underwrite, and the guiding principles which it intends to follow in reinsuring or covering those risks; and
2. (2) contains the information required under 3.1.