{
  "url": "https://openlegislation.uk/insurance-companies-amendment-regulations-1996/note",
  "json_url": "https://openlegislation.uk/insurance-companies-amendment-regulations-1996/note.json",
  "legislation": "uksi/1996/942",
  "legislation_title": "The Insurance Companies (Amendment) Regulations 1996",
  "legislation_url": "https://openlegislation.uk/insurance-companies-amendment-regulations-1996",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This Note does not form part of the Regulations)\nThese Regulations make amendments to Parts IV, VIII and IX of and Schedules 3, 10 and 12 to the Insurance Companies Regulations 1994. They concern the treatment of assets and liabilities of a UK-authorised insurance company for the purposes of the Insurance Companies Act 1982, the determination of a minimum margin of solvency and the methods by which benefits payable to policyholders under linked long-term contracts of insurance may be determined.\nRegulation 1 provides for citation and commencement.\nRegulations 2 and 10 redraft respectively regulations 23 and 60 (of the 1994 Regulations) concerning the treatment of cumulative preference share capital.\nRegulation 3 updates the provisions for interpretation of Part VIII, largely as a consequence of the changes to that Part.\nRegulation 4 amends regulation 47A concerning certain sale and repurchase transactions.\nRegulation 5 amends regulation 48 to provide explicitly for the treatment of “initial margin” and makes certain other amendments to improve the clarity of the regulation. The amendments to regulation 55, introduced by regulation 8, are linked to these changes.\nRegulation 7 extends the range of collective investment schemes which may be valued under regulation 52. The amendments to regulation 51 (dealing mainly with valuation of securities) introduced by regulation 6 are largely consequential on this change.\nRegulation 9 amends the definition of a“contract or asset having the effect of a derivative contract” in regulation 56 and makes other drafting changes to improve the clarity of the regulation.\nRegulation 11 amends the definition and scope of the “provision for adverse changes” required under regulation 61.\nRegulation 12 amends a definition used in Schedule 3 for the purposes of determining the margin of solvency required (under the 1982 Act) to be maintained by a company.\nRegulation 13 makes minor changes to the rules concerning the reference values which may be used for the determination of policyholder benefits under linked long-term contracts.\nRegulation 14 makes changes of detail to the rules for the calculation of the extent to which certain assets can be taken into account, required under regulation 57.\nRegulation 15 contains a transitional provision.\nCompliance Costs\nCompliance Cost Assessments were prepared in respect of the Insurance Companies (Third Directives) Regulations 1994, the Insurance Companies Regulations 1994 and the Insurance Companies (Accounts and Statements) (Amendment) Regulations 1994 and placed in the libraries of both Houses of Parliament. Copies are also available from the Insurance Directorate of the Department of Trade and Industry, Room 5.C.53, 1 Victoria Street, London SW1H 0ET. These assessments concluded that the cost impact of the Regulations was broadly neutral. These Regulations will not impose any new burden on business, and a further Compliance Cost Assessment has not been prepared.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1996/942/note",
    "retrieved_at": "2026-10-29T12:46:27.554569+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}