7.1.1. Long-Term Insurance Funds to be established

An Insurer conducting Long-Term Insurance Business must either:

• (a) establish and maintain one or more Long-Term Insurance Funds; or
• (b) notify the AFSA that the Insurer is deemed to constitute a single Long-Term Insurance Fund.

7.1.2. Long-Term Insurance Fund

(1) Unless (2) applies, all the Long-Term Insurance Assets of an Insurer constitute its LongTerm Insurance Fund.

(2) Where an Insurer identifies particular Long-Term Insurance Assets in connection with different parts of its Long-Term Insurance Business, the assets identified in relation to each such part constitute separate Long-Term Insurance Funds of the Insurer.

7.1.3. Long-Term Insurance Assets

(1) An Insurer’s Long-Term Insurance Assets are the items in (2), adjusted to take account of:

• (a) outgo in respect of the Insurer’s Long-Term Insurance Business; and
• (b) any transfers made out of the Long-Term Insurance Fund in accordance with PINS

7.5.2 (Transfers of assets out of Long-Term Insurance Funds).

(2) The items are:

• (a) admissible assets identified by the Insurer as being available to cover liabilities arising under or in connection with Long-Term Insurance Business with due regard to generally accepted actuarial practice (including assets into which those assets have been converted) but excluding any assets identified as being held to cover liabilities in respect of subordinated debt;
• (b) any other assets identified by the Insurer as being available to cover its liabilities arising from Long-Term Insurance Business (including assets into which those assets have been converted) including, if the Insurer so elects, assets which are excluded under (a);
• (c) premiums and other receivables in respect of Long-Term Insurance Business;
• (d) other receipts of the Long-Term Insurance Business; and
• (e) all income and capital receipts in respect of the items set out in (2).

7.1.4. Insurer deemed to constitute Long-Term Insurance Fund to be treated as though it had established such fund

An Insurer that is deemed, in accordance with PINS 7.1.1(b), to constitute a single Long-Term Insurance Fund shall be treated for all purposes relating to these rules as though the Insurer had established a Long-Term Insurance Fund to which all of the assets and liabilities of the Insurer are attributed.

7.1.5. Treatment of Branches

An Insurer that is a Branch and that is subject to a regulatory requirement in another jurisdiction to arrange its affairs in a manner that is equivalent or substantially equivalent to the requirements of PINS 7.1.1 may make an application to the AFSA for that arrangement of its affairs to be deemed to constitute a Long-Term Insurance Fund.

Guidance

If the AFSA approves an application under PINS 7.1.5, it will give a written notice to the Branch stating the manner in which the arrangement will be deemed to constitute a Long-Term Insurance Fund.