Insurance Act, 2017 (Act No. 18 of 2017)Chapter 6 : Financial SoundnessPart 2 : Security requirements for branches of foreign reinsurers and Lloyd's40. Security to be held in trust |
| (1) | A branch of a foreign reinsurer must provide and maintain security in respect of its insurance business conducted in the Republic in the form of assets valued in accordance with prescribed requirements that are at least equal to the technical provisions for the insurance business calculated in accordance with this Act. |
| (2) | Lloyd’s underwriters must provide and maintain security in respect of the insurance business conducted in the Republic in the form of assets valued in accordance with prescribed requirements that are at least equal to the aggregate of the technical provisions for the insurance business of each Lloyd’s underwriter in the Republic calculated in accordance with this Act. |
| (3) | The security referred to in subsections (1) and (2) must— |
| (a) | comply with any matters prescribed; |
| (b) | be held in trust and be provided to the trustees of the trust referred to in section 41; and |
| (c) | be reported on by the representative of the branch of a foreign insurer or Lloyd’s in accordance with Chapter 7. |
| (4) | The Prudential Authority may prescribe matters referred to in section 36(6) in respect of a branch of a foreign reinsurer, Lloyd’s underwriters, Lloyd’s or the security referred to in subsection (1) or (2). |
| (5) | Section 36(3), (4) and (5) apply with the necessary changes to a branch of a foreign insurer, Lloyd’s underwriter, Lloyd’s and any security referred to in subsection (1) or (2). |
| (6) | For the purposes of this section "insurance business conducted in the Republic" means insurance business relating to any— |
| (a) | risk of a policyholder residing or located in the Republic irrespective of where the risk is located and includes any placement of insurance business through a person that provides binder functions referred to in section 49A(1) of the Long-term Insurance Act, 1998, or section 48A(1) of the Short-term Insurance Act, 1998, on behalf of Lloyd’s or a Lloyd’s underwriter; and |
| (b) | risk emanating in the Republic irrespective of where the policyholder resides or is located. |