Checklist for Completing and Submitting a Captive Non-Life Insurance Application under the European Communities (Non-Life Insurance) Framework

Transcription

1 2012 Checklist fr Cmpleting and Submitting a Captive Nn-Life Insurance Applicatin under the Eurpean Cmmunities (Nn-Life Insurance) Framewrk Regulatins, 1994

2 Applicant Central Bank f Ireland Checklist Ntes: Cmplete all sectins f this checklist. Insert the relevant sectin number, frm the applicatin, in the clumn f bxes entitled Applicant. (The last clumn is fr Central Bank f Ireland use nly). Where the checklist states cnfirm a will be accepted as a cnfirmatin. Where the required cnfirmatin/dcumentatin/infrmatin is nt prvided with/in the applicatin, please refer t this in the cvering letter indicating the prpsed submissin date theref. (Delays in submitting required cnfirmatins, dcumentatin and/r infrmatin will delay the licensing timeframes). Please refer t the Guidelines n Cmpleting and Submitting Licence Applicatins fr timeframes fr an applicant firm t be authrised. All dcuments t be submitted in English (r Irish if desired) nly. 1.0 Details f the Applicant Supply full name and address. 1.2 Prvide the cntact details f a principal wh will accept receipt f any crrespndence frm the Central Bank f Ireland in respect f the licence applicatin (i.e. name, address, telephne, fax and details). 1.3 Prvide cntacts details f prfessinal advisrs in relatin t the captive nn-life insurance applicatin (if applicable), (i.e. name, address, telephne, fax and details). 1.4 Cnfirm that the Central Bank f Ireland can liaise with the named prfessinal advisrs in respect f the licence applicatin. 1.5 Disclse details f the applicant s: a) Secretary; b) Bankers; c) Legal advisr; and d) External auditr. 2.0 Overview f Parent/Grup Prvide: 2.1 Full name and address f parent/grup. 2.2 Cnfirm that the Bard f the parent has apprved the submissin f the applicatin fr the establishment f a Captive Nn-Life Insurance Cmpany t the Central Bank f Ireland. (A certified cpy f the bard minutes cnfirming that the parent has cnsented t the establishment f the applicatin shuld be submitted). 2.3 Brief histry/backgrund f parent/grup. 2.4 Overview n the wnership and structure f parent/grup. 1 The applicant r the firm refers t the entity seeking authrisatin. 1

3 2.5 Prvide the rganisatin chart f the grup utlining: a) the legal structure f each f the entities cncerned (i.e. whether the entities are incrprated, limited liability cmpanies, unlimited liability cmpanies, etc); b) the percentage hlding f each sharehlder; and c) details as t where the applicant will be psitined in the grup. In relatin t the parent/grup prvide: 2.6 Please prvide audited accunts in respect f parent/grup fr the last three years. 2.7 Infrmatin n industry ranking, size f parent n lcal and glbal scale. 2.8 Main grup activities/lines f business. 2.9 Details f main areas f glbal activity f parent/grup Details f main areas f EU activity Details f all existing grup peratins in Ireland. The fllwing infrmatin shuld be prvided in respect f each f the existing Irish peratins: a) A descriptin f the activities being carried ut by each f the existing Irish peratins; b) Details as t whether the peratins are supervised by the Central Bank f Ireland r any ther regulatry authrity; and c) Have any material cntrl deficiencies arisen in any f the Irish regulated peratins in the last 12 mnths. If s, prvide an verview f the deficiency, the mitigating actins taken and the current status f this issue Cmment n the assciatin f the applicant with: a) existing Irish peratins; and b) ther grup peratins prviding details f any prpsed links between existing peratins (including Irish peratins) and the applicant (setting ut any interactin which the applicant will have with the existing peratins including prpsed timeframes fr mergers f peratins and grup rerganisatin, if applicable) Prvide debt ratings fr parent/grup institutinal sharehlders. Please prvide cmmentary theren (this shuld include details f any upgrades/dwngrades in the last 3 years and reasns therefre) Subsidiaries/Participatins in ther cmpanies des the applicant intend t have subsidiaries r significant investments in ther regulated entities. 3.0 Regulatry Supervisin 3.1 a) Cnfirm that the applicant has btained the prir cnsent f its hme cuntry supervisry authrity (this cnfirmatin may be prvided during the applicatin prcess but must be submitted with the final applicatin at the latest); b) Details f ther regulated entities in ther jurisdictins and please prvide us with cntact details fr the regulatr in these jurisdictins. 3.2 Has the parent/grup, within the last 5 years, received regulatry apprval fr new entities in any ther jurisdictin? 3.3 Has the parent/grup applied t establish a regulated entity, (ver the last 5 years) in any ther jurisdictin, which was either withdrawn r refused? 3.4 Has the parent/grup been subject t an investigatin int allegatins f fraud, miscnduct r malpractice by any regulatry authrity (ver the 2

4 last 5 years) in any ther jurisdictin. 3.5 Has the parent/grup r any its directrs/senir managers/executives been censured r disciplined by any regulatry bdy further t its prfessinal activities? 3.6 If yes in relatin t 3.2 t 3.5 prvide full details theref. 3.7 Financial Cnglmerates Directive (Directive 2002/87/EC f the Eurpean Parliament and f the Cuncil f 16 December 2002 n the supplementary supervisin f credit institutins, insurance undertakings and investment firms in a financial cnglmerate) / SI 727 f 2004 Eurpean Cmmunities (Financial Cnglmerates) Regulatins a) Please cnfirm if the grup is subject t supervisin pursuant t the Financial Cnglmerates Directive. 3.8 If answer t 3.7 is yes, utline the existing arrangements fr supervisin as a Financial Cnglmerate including cntact details f relevant regulatrs. 3.9 If answer is t 3.7 is yes, please cnfirm the applicant will als fall within the scpe f this supervisin r explain therwise If answer t 3.7 is n, please cnfirm whether r nt the establishment f this new entity will result in the applicant s grup becming a Financial Cnglmerate Supplementary supervisin f insurance undertakings in an insurance grup (Directive 98/78/EC f the Eurpean Parliament and f the Cuncil f 27 Octber 1998 n the supplementary supervisin f insurance undertakings in an insurance grup) / SI 366 f 2007 Eurpean Cmmunities (Insurance and Reinsurance Grups Supplementary Supervisin) Regulatins 2007 a) Please cnfirm if the grup is subject t supervisin as an insurance grup If answer t 3.11 is yes, utline the existing arrangements fr supervisin as an insurance grup including cntact details f relevant regulatrs If answer t 3.11 is yes, please cnfirm that the applicant will als fall within the scpe f this supervisin r explain therwise If the answer t 3.11 is n, please cnfirm whether r nt the establishment f this new entity will result in the applicant s grup becming an insurance grup Other regulatry supervisin within the Eurpean Unin a) Please cnfirm if the grup is subject t any cnslidated supervisin within the EU (such as Cnslidated Supervisin as part f a Banking Grup r an Investment Grup) If answer t 3.15 is yes, utline the existing arrangements including cntact details f relevant regulatrs If answer t 3.15 is yes, please cnfirm that the applicant will als fall within the scpe f this supervisin r explain therwise If the answer t 3.15 is n, please cnfirm whether r nt the establishment f this new entity will result in the applicant s grup becming subject t the cnslidated supervisin requirements abve Other regulatry supervisin utside the Eurpean Unin a) Please cnfirm if the grup is subject t any cnslidated supervisin utside the EU. 3

5 3.20 If the answer t 3.19 is yes, utline the existing arrangements including cntact details f relevant regulatrs If the answer t 3.19 is yes, please cnfirm that the applicant will als fall within the scpe f this supervisin r explain therwise If the answer t 3.19 is n, please cnfirm whether r nt the establishment f this new entity will result in the applicant s grup becming subject t any cnslidated supervisin utside the EU. Insurance Hlding Cmpany 3.23 Des the applicant s grup have an insurance hlding cmpany that has its head ffice in the State If there is an insurance hlding cmpany with a head ffice in the state, please cnfirm cmpliance with Regulatin 14 f SI 366 f Please cmplete an Individual Questinnaire fr any persn wh will be cncerned in the directin r management f the Insurance Hlding Cmpany Ownership Structure 4.1 Prvide details f: a) All direct hlders f shares r ther interests in the applicant; and b) All indirect hlders f shares/interests (where the hlding/interest represents 10% r mre f the capital r f the vting rights f the applicant r which makes it pssible t exercise a significant influence ver the management f the undertaking, i.e. qualifying sharehlder). (Clearly utline whether there are any hlding cmpanies invlved in the wnership structure the ratinale fr such a structure shuld be prvided). 4.2 Please prvide a descriptin f the financial and nn-financial interests r relatinships f the direct and indirect sharehlders f the cmpany with: a) any sharehlders f the new cmpany/r current sharehlders f the Grup; b) any persn entitled t exercise vting rights f the new cmpany/r currently with the Grup; and c) any member f the bard r similar bdy, r f the senir management f the new cmpany/r currently the Grup. 4.3 Please cmplete Appendix 1 fr all qualifying sharehlders and please submit an Individual Questinnaire fr all individual qualifying sharehlders thrugh ur Online Reprting System. Please cntact the Authrisatin team wh will arrange fr the applicant t have access t the Online Reprting System. 4.4 Where there are qualifying sharehldings f mre than 10% please prvide details f: a) the perid fr which the prpsed sharehlder intends t hld the sharehlding after the cmpany has been authrised; b) any intentin f the sharehlder t increase, reduce, r maintain the level f the sharehlding in the freseeable future; c) an indicatin f the intentins f the sharehlder twards the target institutin and in particular whether r nt there is the intentin t act as an active minrity sharehlder, and the pssible ratinale fr such actin; d) infrmatin n the ability (financial psitin) and willingness f the 2 Insurance Hlding Cmpany as defined in SI 366 f 2007 Eurpean Cmmunities (Insurance and Reinsurance Grups Supplementary Supervisin) Regulatins An Individual Questinnaire des nt need t be submitted fr any persn wh has already submitted an Individual Questinnaire as part f this applicatin. 4

6 prpsed sharehlder t supprt the target institutin with additinal wn funds if needed fr the develpment f its activities r in case f financial difficulties; e) a descriptin f the sharehlder s intentins and expectatins twards the cmpany in the medium-term, cvering all the elements mentined abve in the business plan prvided; f) details n the influence that the acquirer intends t exercise n the financial psitin (including dividend plicy), the strategic develpment, and the allcatin f resurces f the target institutin. 4.5 Please indicate whether the Grup r qualifying sharehlders if applicable have any perceived cnflict f interest with the prpsed new cmpany. 5.0 Legal Structure 5.1 Cnfirm that the applicant will be registered in Ireland and subject t Irish law. 5.2 Outline the full legal structure f the applicant, i.e. limited cmpany, unlimited cmpany, etc. 5.3 If the applicant has a legal structure ther than a limited cmpany, please utline the ratinale fr using a different structure. 5.4 Cnfirm the fllwing dcumentatin accmpanies this checklist: a) A certified cpy f the Certificate f the Incrpratin f the applicant (and Certificate f Name Change if applicable). A certified dcument is ne that is stamped, signed and dated as being a true cpy f the riginal at a particular date in time by a party independent f the applicant. Please nte that the certificatin stamp must be present n the relevant dcument; b) A draft cpy f the Memrandum and Articles f Assciatin f the applicant. (The final cpy will be required upn licensing f the applicant); c) Cnfirm that the bjects in the Memrandum and Articles are limited t the business prvided fr in this applicatin and in the insurance directives; d) Latest audited accunts where the applicant is incrprated in excess f 18 mnths. 6.0 Objectives and Prpsed Operatins 6.1 Clearly set ut: a) The nature f the prpsed risks; b) The insurance classes being applied fr; c) The territries t be cvered; d) A summary f the types f events/circumstances being insured; e) Please prvide the target financial bjectives f bth the grup and the applicant e.g return n equity. Please indicate when the applicant will meet the target; f) Full details f the applicant s prpsed captive nn-life insurance business t include 1) gegraphical spread f prjected premium, 2) guiding principles as t reinsurance (treaty wrdings, retentin levels, and treaty limits); 5

7 g) Cnfirmatin that the peratins f the cmpany will be limited t nn-life insurance and t peratins arising directly therefrm; (Art 7 (2) (a) Framewrk Regulatins); h) The applicatin shuld set ut the cuntries in which business will be written and whether this will be n a freedm f services r establishment basis; i) The applicatin shuld prvide the ratinale fr the prpsed F.O.E r. F.O.S structure. Where an establishment(s) in anther Member State is prpsed, the applicatin must include a draft branch applicatin file fr that cuntry(s) which must recncile with the data in the main applicatin 4 ; j) Where ther Member States are invlved, applicants shuld nte that there may be further legal requirements t be fulfilled in each member State. These are usually cmmunicated by the relevant authrities in the cuntries by means f their General Gd Requirements. k) If the applicant intends t write business utside the EU, prvide an verview f hw the applicant can underwrite that business frm an Irish authrised undertaking; 6.2 Ratinale and anticipated benefits f setting up an Irish captive nn-life insurance cmpany. 6.3 Detailed infrmatin n the surces f funding fr the applicant. 7.0 Organisatin f the Applicant and Gvernance Arrangements 7.1 Demnstrate hw heart and mind will be present in Ireland 5. (The day-t-day peratins must be cnducted within the State). 7.2 Bard f Directrs. Prvide details f the prpsed bard f directrs specifically identifying 6 : a) Executive directrs; b) Nn-executive directrs; c) Independent directrs; d) Terms f references fr the Bard f Directrs. 7.3 Applicant s Gvernance Arrangements. Prvide: a) Organisatin chart f the applicant s crprate gvernance structure; b) Set ut details f reprting lines f the applicant t the grup; c) Details f all management cmmittees and members 7, e.g., Audit Cmmittee; Risk Cmmittee; 4 The Central Bank f Ireland will nly issue a branch applicatin fr ntificatin purpses t anther Member State Regulatr, after the head ffice applicatin has been granted a licence, i.e., if the applicatin is successful. 5 Heart and Mind: An undertaking whse registered ffice is lcated in the State must ensure it has sufficient resurces available t it t cnduct its business and that the strategic directin, decisin making, cntrl and accuntability f the insurance undertaking is lcated in the State. 6 Please refer t the Crprate Gvernance Cde fr Captive Insurance and Captive Reinsurance Undertakings fr cmpsitin f the bard. %20Crprate%20Gvernance%20Cde%20fr%20captive%20Insurance%20and%20captive%20Reinsurance%2 0Undertakings/Crprate%20Gvernance%20Cde%20fr%20Captives.pdf 7 Please refer t the Crprate Gvernance Cde fr Captive Insurance and Captive Reinsurance Undertakings fr cmpsitin f cmmittees. %20Crprate%20Gvernance%20Cde%20fr%20captive%20Insurance%20and%20captive%20Reinsurance%2 0Undertakings/Crprate%20Gvernance%20Cde%20fr%20Captives.pdf 6

8 Other relevant cmmittees (Investment, Underwriting, etc.) Details shuld include: Cmpsitin theref; Frequency f meetings; General respnsibilities/terms f reference; Reprting lines; and Details f sub-cmmittees (if applicable). 7.4 Please cnfirm the applicant will cmply with all the requirements f the Crprate Gvernance Cde fr Captive Insurance and Captive Reinsurance Undertakings. 7.5 Senir Management/ Captive staff a) Please prvide full details f prpsed senir management and captive staff. 7.6 Prvide list f persns wh will carry ut Pre-Apprval Cntrlled Functins (PCF s) fr the applicant firm (including PCF s that are utsurced) and the PCF functin they will be perfrming. 7.7 A cmpleted Individual Questinnaire must be cmpleted fr PCF s. The regulatins identify senir psitins as PCF s such as Chief Chief Executive Officer, Directr r Head Cmpliance, Risk and Internal Audit. The Individual Questinnaire must be cmpleted thrugh ur Online Reprting System. Please cntact the Authrisatin team wh will arrange fr the applicant t have access t the Online Reprting System. Please refer t the Fitness and Prbity regime available n the Central Bank f Ireland s website fr further infrmatin n PCF s and due diligence t be undertaken t assess a persn s prbity t perfrm a cntrl functin (CF) Risk Management 9 Detailed infrmatin is required in respect f the fllwing key functins: 8.1 Internal Audit. Where the size r nature f the peratins f the applicant warrants it, a prperly staffed internal audit functin shuld exist (which has direct access t the bard f directrs r an apprpriate sub-cmmittee f the bard) that reprts t the bard. Outline the rle f internal audit; Include details f whether internal audit will be utsurced t a grup cmpany r carried ut lcally; Outline expected frequency f internal audits; Outline the scpe f the internal audit; Cnfirm that the audit functin is independent frm the peratinal activities f the applicant; Please submit an verview f the internal audit team and their experience; If the applicant is already trading, please submit an verview f audit reprts ver the last 3 years t include: Title f reprt; issues identified classified by High, Medium r Lw Risk; current status f issues. Fr any high risk issues please submit cpies f the reprt. Further audit reprts may be requested There may be verlap between Sectin 8 and Sectin 9. 7

9 8.2 Cmpliance Indicate wh will be respnsible fr the cmpliance functin; Set ut cmpliance reprting lines, prcesses, key cmpliance respnsibilities, etc. (The cmpliance fficer shuld be independent f cmpany peratins unless therwise agreed with the Central Bank f Ireland). 8.3 Risk Appetite Statement Submit a cpy f the risk appetite statement 10 fr the applicant. The risk appetite statement shuld include the fllwing: All material risks that the applicant is expsed t; T express the risk appetite in quantitative measures and qualitative terms; T separately address risk appetite ver shrt, medium and lng term; T identify clear trigger levels fr each material risk. In additin t material breach limits, statement need t include interim limits which when breached will require remedial actin; A clearly dcumented and cmmunicated escalatin prcedure in place (bth internal and external escalatin prcedures) as well as identifying what cnstitutes a material breach; T identify the individual(s) with respnsibility fr mnitring and escalatin; T cmmunicate the statement t all relevant staff, including thse respnsible fr prducing, mnitring r using the risk measures n a regular basis; The apprval f the statement by the bard. 8.4 Risk Management Outline the risk management functin; Identify the majr risks that the applicant faces, and detail hw the applicant prpses t mnitr, manage, cntrl and reprt n each f these risks (in relatin t each f its prpsed business lines); Demnstrate that cmprehensive risk management systems cmmensurate with the scpe, size and cmplexity f the applicant s activities, including derivatives and assciated risks, will be in place, incrprating: - Cntinuus measuring, mnitring and cntrlling f risks; - Accurate and reliable management infrmatin systems; - Timely management reprting; and - Thrugh audit and cntrl prcedures. 8.5 Underwriting Detail the underwriting guidelines and criteria; Detail the rle and bjectives f the applicant s underwriting functin; Describe the data and prcesses that will be emplyed by the underwriting functin t achieve thse bjectives; Outline the underwriting activities f the applicant t include underwriting strategy and underwriting plicy; Outline the internal cntrls ver the underwriting prcess; Describe hw the perfrmance f the underwriting functin will be mnitred and cntrlled. 10 Please refer t Sectin 13 f the Crprate Gvernance Cde fr Captive Insurance and Captive Reinsurance Undertakings fr Risk Appetite Statement. 20captive%20Reinsurance%20Undertakings/Crprate%20Gvernance%20Cde%20fr%20Captives.pdf 8

10 8.6 Prvisining Outline the plicies and prcedures in place t establish technical prvisins particularly in relatin t prvisins such as incurred but nt reprted (IBNR) and incurred but nt enugh reprted (IBNER). 8.7 Asset and Liability Management Outline the Asset Liability Management plicy t include identificatin and assessment f mismatches between assets and liabilities (i.e. with respect t duratin and currency), cntingencies plans fr unexpected utflws/inflws, and any prpsed uncvered mismatches. 8.8 Investment Prvide the investment strategy; Prvide the strategic asset allcatin, by asset class, type, currency and duratin; Prvide details f the specific investments purchased; Prvide details f the specific cunterparties. Prvide internal quantitative limits per cunterparty, gegraphical area r industry. See Central Bank f Ireland s guidelines fr insurance cmpanies (1) risk management f Derivatives 11 and (2) asset management Liquidity and Cncentratin Risk Management Describe the prcess f identifying, mnitring and measuring the cncentratin f risk n the underlying lines f business and the prtfli as a whle Operatinal Risk Management Prvide a plicy n peratinal plicy t include a definitin f peratinal risk, identificatin f majr peratinal risks, and detail hw the applicant prpses t mnitr, manage, cntrl and reprt n peratinal risks Reinsurance and Other Risk Mitigatin Technique Dcument the reinsurance plicy (t include the extent f reinsurance prpsed), including settling reinsurance prgrams, level f risk transfer, selectin f type f reinsurance, principles fr the selectin f reinsurance cunterparties; Prcedures fr assessing the creditwrthiness and diversificatin f reinsurance cunterparties; Prcedures fr assessing the effective risk transfer; Cncentratin limits fr credit risk expsure t reinsurance cunterparties, and apprpriate systems fr mnitring these expsures; Liquidity management t deal with any timing mismatch between claims payments and reinsurance recveries; Prvide draft reinsurance treaties; Detail the structure f any reinsurance/retrcessin prgramme, including excesses, limits, currencies and reinsurers. Prvide draft retrcessin treaties. Nte: Applicants shuld refer t the Central Bank f Ireland s Guidelines n the Reinsurance Cver f Primary Insurers and the Security f their

11 Reinsurers 13. In principle, credit fr reinsurance arrangements with related cmpanies (in slvency calculatins) is nly available where the grup reinsurer is a satisfactrily rated entity Internal Cntrls/Plicies Prvide full details f the internal cntrl prcedures. Internal cntrl shuld address the cntrl envirnment, cntrl activities, cmmunicatin and mnitring. (Applicants must ensure that adequate measures are in place regarding lending authrities, segregatin f duties, prcedures etc) Cnflicts f Interest Prvide full details regarding the pssible cnflicts f interest arising in the cnduct f the different types f activity under the applicant s cntrl, demnstrating that adequate arrangements have been made t prtect the interest f clients Outsurcing The infrmatin that shuld be prvided t the Central Bank f Ireland in relatin t utsurcing prpsals shuld be cnsistent with regulatry principles, fr example Slvency II guidance 14 ; Please prvide full details f any utsurcing by the applicant t bth affiliates and third parties. Cpies f all service level agreements shuld be prvided. (Transactin flw charts fr the activities invlving utsurcing may be required, i.e. details f the interrelatinships f the varius entities, timings, etc.); Please prvide the scpe f activities t be utsurced shuld be described (utlining whether chain utsurcing is prpsed); Cnfirm that the utsurcing service prvider will prvide the Central Bank f Ireland with access 15 t data held by it (and premises) in rder that the Central Bank f Ireland can prperly carry ut its supervisry functins. Please nte that the Central Bank f Ireland will expect t sight a prvisin in ALL agreements in respect f this; Please prvide details f hw the utsurced activities will be mnitred and cntrlled including details f key perfrmance indicatrs used; Please prvide details f terminatin f the agreement, rights and bligatins f the utsurcing institutin and utsurcing service prvider. 9.0 Premiums/Underwriting, Claims, Distributin, Investment Management, Finance 9.1 Underwriting Outline the underwriting activities f the applicant t include staffing and authrity levels/limits and hw thse limits are mnitred; Outline the reprting lines f all individuals within the underwriting sectin; and Prvide details f the basis fr calculatin f premium rate, details f risk diversificatin, details f areas f high cncentratin f risk, and the basis fr underwriting prcedures Final-Advice-n-System-f-Gvernance.pdf 15 Access shuld als be prvided t allw the utsurcing institutin s cmpliance and internal audit department access t data and the external auditrs full and unrestricted rights f inspectin and auditing f that data. 10

12 9.2 Claims Handling Prvide details with regard t the claims handling prpsals f the firm t include details n the claims handling prcedures; Shuld the firm be engaging in the services f a third party claims administratr then a draft cpy f the claims handling agreement must be submitted. 9.3 Plicy Dcuments Prvide draft plicy dcuments. 9.4 Finance Detail the remit and staffing f the financial cntrl functin (including prjectins n cmpliance with prudential reprting requirements), the reprting lines f the financial cntrl functin, the key reprts utilised and the frequency f reprting. 9.5 Investment Management Detail the remit and staffing f the investment management functin including the reprting lines f the functin, the key reprts utilised and the frequency f reprting. 9.6 Outsurcing Please prvide an peratinal prcess map fr the entire applicant including functins utsurced t service prviders Capital, Slvency and Financial Prjectins 3 year prjectins are required in all instances where prjectins are referred t. The aim f this sectin is t review the applicant has reasnable financial prjectins and cmplies with the capital requirements. The assumptins are reviewed fr reasnableness fr example using industry data, actual experience and market research. The assumptins are checked int the financial prjectins which shuld prduce a Prfit and Lss Accunt and Balance Sheet which shuld shw cmpliance with the capital requirements. Prvide full details in relatin t: 10.1 Frecasts underlying business plan such as premium rates, vlume, reinsurance rates, lss ratis, cmmissin rates and investment incme assumptins. The basis fr these frecasts shuld be explained in the cntext f 1) industry data, 2) actual experience, e.g. lss ratis and 3) market research Financial prjectins a) While applicatins shuld cver the specific requirements utlined belw, it wuld be advisable t prvide as cmprehensive an applicatin as pssible in rder t minimise fllw-up queries. The applicatin shuld therefre include financial prjectins prepared n an ptimistic, realistic and pessimistic basis with explanatins f the underlying assumptins supprting each. The fllwing prjectins shuld be prvided fr at least 3 years n an ptimistic, pessimistic and realistic basis. (i) Prfit and lss accunt prepared in accrdance with apprpriate accunting standards; (ii) Balance Sheet prepared in accrdance with apprpriate accunting standards; (iii) Estimates f Premium, Claims and Expenses (Frms 1 and 11); (iv) Frecast Balance Sheet (Frm 10); (v) Slvency Margin (Frm 14); (vi) Schedule f Management Expenses t include set up csts and 11

13 breakdwn f expenses included in management reprt; (vii) Detail n lss histry f the business the firm prpses t write t include lss histry prfile fr at least the last 5 years (if applicable). (viii)if the applicant is currently trading, prvide the P&L, Balance Sheet and Capital requirement fr the last three years. Prvide the financial perfrmance f each prduct line fr the last five years. b) Calculatin and explanatin f the risk gap 16 and hw the cmpany seeks t address these gaps in the event f significant lsses. The slvency margin calculatins are prvided in Directive 2002/13/EC. The Central Bank f Ireland recgnises that where a captive is being established with prven risk management and a detailed, credible claims histry sufficient t allw fr actuarial inferences t be drawn, the situatin differs frm that f a start-up third party insurance cmpany, and accrdingly the business mdel shuld have greater certainty. In such instances, firms may apply fr the applicatin f a lwer slvency margin. Cnfirm that the firm s initial capital meets the higher f the fllwing: The minimum guarantee fund; r 125% f the slvency requirements in respect f a pure prperty prgramme classes 8 and 9 with ancillary cnsequential business interruptin class 16 nly; In respect f all ther prgrams the slvency requirement is 150% Capital Set ut full details f: The capitalisatin f the applicant splitting it between share capital, capital Cntributin, subrdinated debt etc.; Minimum Guarantee Fund (MGF). The undertaking must pssess a MGF Slvency II (i) Financial prjectins (using a QIS5 spreadsheet with latest technical specificatins) fr first three years f peratins; (ii) Applicants plans t use standard frmula, internal mdel r partial internal mdel as apprpriate; (iii) Assessment f main gaps between current arrangements and Pillar II and III requirements. While the Slvency II regime is nt in place, applicants are required t demnstrate where they are nw and demnstrate a credible plan t achieve cmpliance. As the Slvency II regime is being develped the Central Bank f Ireland will facilitate a discussin in relatin t the abve requests IT/Business Cntinuity Plan Prvide details f: 11.1 All IT systems t be used in relatin t frnt and back ffice peratins; (Please use peratinal prcess map at 9.6 abve as a basis fr this infrmatin) The main IT service prviders and back up IT service prviders; and 11.3 The business cntinuity plan (cnfirming the business cntinuity arrangements in place in an alternative lcatin in the State). 16 This is defined as the prjected net ttal f captive s net retained liability less ne year s premium net f expenses, capital, prfit and lss accunt balance and any ther free reserves. 17 This is subject t an indexatin review. The next increase is expected frm 31/12/2012. Please refer t the Insurance Sectin f the Central Bank f Ireland website fr an update. 12

14 12.0 Other Cnfirm that: 12.1 Lcatin set ut details f the applicant s: a) Initial Infrastructure Plans; and b) Future/Permanent Plans Prvide any ther infrmatin relevant t the applicatin. Cnfirmatin frm Applicant and Captive Management Cmpany We [the applicant/parent/sharehlders] hereby cnfirm that we are respnsible fr the preparatin f this checklist and supprting dcuments. We have delegated the cmpletin f the checklist including the cnfirmatins set ut in (i) and (ii) belw, t [Captive Management Cmpany]. There is willingness and a capacity n the part f the applicant t cmply with cdes, prudential and legislative requirements applicable t captive nn-life insurance cmpanies n a cntinuus basis. Signed: Name (in Print): Title: Name f Emplyer: Date: (i) (ii) The infrmatin set ut in this checklist is crrect and accurate The checklist is cmpleted in full Signed Name (in print) Title Name f Emplyer Date 13

15 APPENDIX 1 QUALIFYING SHAREHOLDERS Please cmplete the relevant sectin belw in relatin t all qualifying sharehlders. A qualifying sharehlder, pursuant t Eurpean Cmmunities (Nn-Life Insurance) Framewrk Regulatins, 1994, means a direct r indirect hlding in an undertaking which represents 10 per cent r mre f the capital f the vting rights r which makes it pssible t exercise a significant influence ver the management f the undertaking. (Cpy the relevant sectin where necessary if mre than ne sharehlder.) (Where a (qualifying) sharehlder des nt meet ne f the legal frms prvided belw, e.g. individual sharehlders, please discuss the wnership structure with the Central Bank f Ireland in advance f submitting the applicatin). Sharehlder Cmpany Disclse name, address and registered number f Sharehlder. Where a sharehlder is an incrprated entity, cnfirm that the cmpany (i.e. sharehlder) has submitted the fllwing: a) Descriptin f activities; b) Whether r nt the cmpany is regulated and if regulated, by which authrity; c) Mst recent audited accunts if applicable. If nt available mst recent management accunts shuld be submitted. d) Details f prpsed interactin with the applicant; e) Written cnfirmatin that the cmpany is the beneficial wner f the shares; f) Details f any litigatin (r knwn circumstances which might give rise t litigatin) against the cmpany currently utstanding r that has ccurred in the last five Years,except cases arising in the curse f nrmal business activities. g) Details f any material written cmplaints made against the cmpany by its clients r its frmer clients in the last five years which are awaiting determinatin by, r have been upheld by an mbudsman. h) Details f any significant events r infrmatin (fr example, in relatin t inslvency, recnstructin, civil r criminal investigatins r prceedings, r financial services regulatins) which wuld be relevant t ur cnsideratin f the cmpany and the applicant s firm applicatin fr authrisatin. Sharehlder Nminee Cmpany Disclse name, address and registered number f Sharehlder. Where a cmpany hlds 10% r mre f the shares in an applicant firm n behalf f third parties, cnfirm that the cmpany has submitted the fllwing details relating t the prpsed nminee hlders f the shares: a) Dcumentatin evidencing the fact that the nminee is the registered hlder f the shares, i.e. certified cpy f the share register; b) Dcumentatin evidencing the wnership f the nminee cmpany, i.e. certified cpy f the share register; c) Audited accunts f the nminee cmpany; d) Identity f the beneficial wners f the shares; 14

16 e) Details regarding what bject is intended t be served by using such a nminee cmpany, rather than hlding the shares directly; and f) Apprpriate declaratins in respect f the nminee hlding the shares in trust fr the beneficial wners, including frmal cnfirmatin frm the nminee itself that the relevant declaratins f trust remain valid and in frce. Sharehlder Trusts Disclse name f Sharehlder. Where a sharehlder is a trust, cnfirm that the trustees have submitted the fllwing: a) Dcumentatin evidencing the fact that the trust is the registered hlder f the shares, i.e. certified cpy f the share register; b) Cpies f the trust deed and any ther dcumentatin cnstituting the trust r relating t the trust in sme ther way including any supplemental r ancillary deeds, dcuments r agreements r side letters; c) Cmpleted Individual Questinnaires thrugh ur Online Reprting System fr the settlers f the Trusts; d) Cmpleted Individual Questinnaires thrugh ur Online Reprting System fr the trustees f the Trusts; e) Cmpleted Individual Questinnaires thrugh ur Online Reprting System fr the beneficiaries f the trusts (including details f age fr minrs) and thse f all persns wh are within the class f prspective beneficiaries; f) Mst recent audited accunts (if available) r ther relevant financial infrmatin in relatin t the trusts t include all assets and liabilities f the trust; g) Purpse f the Trust; h) A signed undertaking is required t ensure that the requirements f the legislatin in relatin t the sharehlders are met n a cntinuus basis. The undertaking must cntain prvisins t prvide the Central Bank f Ireland with a) advance ntice f any acquiring transactins r dispsals b) advance ntice f any prpsed change in the beneficiaries t the trust, the trust deeds, r the trust s gverning law; c) and must be signed by all Sharehlders including the trustee(s) and the applicant firm; and d) any material changes in the Trust. i) Legal pinin cnfirming the validity and efficacy f the undertakings as drafted t suit the circumstances f any particular sharehlder trust. j) Prvide details f the surce f the funds under the trustee s cntrl. k) Prvide the name(s) f the persn (s) authrised t sign n behalf f the Trust. l) Prvide details f any limitatins n the trustee s pwer f investments. Sharehlder Partnerships Disclse name, address and registered number f Sharehlder. Where a sharehlder is a limited liability partnership ( LLP ), cnfirm that the partners have submitted the fllwing: a) Descriptin f the LLP itself (including names f general and limited partners and details f respective rles); b) Descriptins f activities f the LLP; c) Whether r nt the LLP is regulated and by which authrity; d) Mst recent audited accunts if applicable. If nt available mst recent management accunts; 15

17 e) Details f prpsed interactin with applicant; f) Written cnfirmatin that the LLP is the beneficial wner f the shares; and g) A cpy f the partnership deed and any relevant agreement between the general and limited partners. h) Cmpleted Individual Questinnaire thrugh ur Online Reprting System fr each partner in the Partnership. i) If the partnership is nt a LLP, please cntact the Central Bank f Ireland. 16

18 T F insuranceauthrisatin@centralbank.ie Bsca PO 11517, Duga Spencer, Baile Átha Cliath 1, Éire PO. Bx N 11517, Spencer Dck, Dublin 1, Ireland 17