CIB 3.1.3 Permanent Share Capital

Permanent Share Capital means ordinary share capital or an equivalent capital instrument which meets the following conditions:

(a) it is fully paid up and subscription to it is not financed directly or indirectly by the issuer;
(b) it is directly issued;
(c) it is recognised as equity under applicable national accounting standards and insolvency law and gives investors a claim as shareholder or equivalent status;
(d) it is simple and the terms upon which it is issued are clearly defined;
(e) it is undated and non-redeemable except with the prior written consent of the Regulator;
(f) it does not give the holder a right to require redemption and its terms do not create any expectation that it will be redeemed at any point;
(g) it is immediately and fully available to the Captive Insurer to absorb losses on a going concern basis;
(h) it ranks for repayment upon winding up or insolvency pari passu with all other Permanent Share Capital and after all other debts and liabilities;
(i) it is not subject to a guarantee, pledge or other credit enhancement that could legally or economically enhance its seniority in the insolvency or liquidation of the Captive Insurer; and
(j) any dividends and other charges in relation to Permanent Share Capital are:
(a) payable only out of accumulated realised profits;
(b) payable only at the option of the Captive Insurer;
(c) non-cumulative;
(d) not fixed, capped or otherwise ascertainable in advance of being declared;
(e) not calculated by reference to the amount paid in at issuance; and
(f) not such as to trigger the insolvency of the Captive Insurer in the event of non-payment.