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SUP App 2.8 Ceasing to effect contracts of insurance

07/03/2016R

If a firm (whether within or outside the scope of the Solvency II Directive) decides to cease to effect new contracts of insurance, it must, within 28 days of that decision, submit a run-off plan to the FCA including:

  1. (1)

    a scheme of operations; and

  2. (2)

    an explanation of how, or to what extent, all liabilities to policyholders (including, where relevant, liabilities which arise from the regulatory duty to treat customers fairly in setting discretionary benefits) will be met in full as they fall due.

07/03/2016G

Under Principle 11, the FCA normally expects to be notified by a firm when it decides to cease effecting new contracts of insurance in respect of one or more classes of contract of insurance (see SUP 15.3.8 G). At the same time, the FCA would normally expect the firm to discuss with it the need for the firm to apply to vary its permission (see SUP 6.2.6 G and SUP 6.2.7 G) and, if appropriate, to submit a scheme of operations in accordance with SUP App 2.8.1 R.