Guidance

In considering:

(a) whether to grant such a waiver; and
(b) the amount which the Regulator will allow the Insurer to bring into account for these purposes;

the Regulator will take into account the following factors:

(i) where the ISPV is an Authorised ISPV, the Regulator will wish to be satisfied that the ISPV complies with Rules 10.1.2 to 10.1.7 The Regulator may rely on information supplied in connection with the ISPV's application for authorisation. However, if the application for a waiver is made some time after authorisation was granted, the Regulator may request confirmation that there has been no material change to the information originally supplied;
(ii) where the ISPV is not authorised, the Regulator will expect to receive confirmation that the ISPV is subject to regulation by a Regulator in a jurisdiction acceptable to the Regulator. In addition, it will need details of the debt issuance or other financing mechanism by which the ISPV's reinsurance liabilities are funded. The Regulator will also expect to receive information about the ISPV's key management and control functions, including details of the ISPV's auditors and arrangements for claims handling, and any material outsourcing agreements. The Regulator will also need information about the structure of any Group of which the ISPV is a member;
(iii) no credit will be allowed for a contract of reinsurance with an ISPV unless there is an effective transfer of risk to the ISPV. The Regulator will require evidence that the contract of reinsurance and the extent of the credit that the Insurer proposes to take for it satisfy the risk transfer principle; and
(iv) the Regulator will also expect to receive an analysis of the potential for risk to revert to the Insurer or any of its associates under realistic adverse scenarios or for liabilities to arise in respect of the risks transferred for which no provision has been made.