SUP App 2.7 Capital resources below the level of individual capital guidance

For a dormant asset fund operator, unless any of SUP App 2.4.1 R, SUP App 2.5.1 R, SUP App 2.5.3 R or SUP App 2.6.1 R applies, if a firm's circumstances change, such that its capital resources have fallen, or are expected to fall, below the level advised in individual capital guidance given to the firm by the FCA, then, consistent with PRIN 2.1.1 R Principle 11 (Relations with regulators), a firm should inform the appropriate regulator of this fact as soon as practicable, explaining why capital resources have fallen, or are expected to fall, below the level advised in individual capital guidance, and:

1. (1)

   what action the firm intends to take to increase its capital resources; or

2. (2)

   what modification the firm considers should be made to the individual capital guidance which it has been given.

Terms in SUP App 2.7.1G have the meaning in INSPRU 7 and GENPRU in force as at 31 December 2015. References to SUP App 2 provisions are to the provisions in force in the PRA Rulebook on 31 December 2015.

In relation to a firm carrying on with-profits insurance business, if it intends either (a) to remedy a fall in the level of capital resources advised in its individual capital guidance, or (b) to prevent a fall in the level advised in that guidance, for example, in either case, by taking management action to de-risk a with-profits fund or by reducing non-contractual benefits for policyholders, it should explain to the appropriate regulator how such proposed actions are consistent with the firm's obligations under the FCA's Principle 6 (Customers' interests).