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6.2. Investment restrictions
FINANCIAL SERVICES LEGISLATION
RULES
INSURANCE AND REINSURANCE PRUDENTIAL RULES
SCHEDULE 2 Categories of Long-Term Insurance
SCHEDULE 6. Prudential returns by Insurers
WORKING SCHEDULE 1 - List of Defined Terms for PINS and associated rulebooks
Entire Act

6.2. Investment restrictions

6.2.1. Assets not admitted to trading on a regulated financial market

An Insurer must ensure that assets and securities that are not admitted to trading on a regulated financial market are kept to prudent levels.

6.2.2. Derivatives

(1) An Insurer must not use a Derivative instrument for speculation or proprietary trading.

(2) An Insurer may only use a Derivative instrument:

  • (a) to apply an index tracking strategy to part or all of a portfolio;
  • (b) to apply capital protected strategies to part or all of a portfolio;
  • (c) to apply efficient portfolio management techniques to a portfolio; or
  • (d) to reduce investment risk currently employed on a portfolio.

6.2.3. Forward foreign exchange transactions

An Insurer must not invest in forward foreign exchange transactions save to the extent that they hedge currency exposures to currencies other than the reporting currency in its prudential returns.