{
  "url": "https://openlegislation.uk/insurance-companies-amendment-regulations-1996/regulation-3",
  "json_url": "https://openlegislation.uk/insurance-companies-amendment-regulations-1996/regulation-3.json",
  "legislation": "uksi/1996/942",
  "legislation_title": "The Insurance Companies (Amendment) Regulations 1996",
  "legislation_url": "https://openlegislation.uk/insurance-companies-amendment-regulations-1996",
  "path": "regulation/3",
  "kind": "regulation",
  "number": "3",
  "heading": "Interpretation: Part VIII",
  "text": "(1) Regulation 44 of the 1994 Regulations (interpretation: Part VIII) shall be amended as follows.\n(2) Omit the definitions of “equity share” and “equity share capital”.\n(3) After the definition of “equivalent securities”, insert—\n““exposure” in relation to assets means an amount determined in accordance with regulation 57 of, and paragraph 5 of Schedule 12 to, these Regulations;\n“exposure” in relation to a counterparty means an amount determined in accordance with regulation 57 of, and paragraphs 13 to 15 of Schedule 12 to, these Regulations;.”\n(4) After the definition of “industrial and provident society”, insert—\n““initial margin”, in respect of a derivative contract or a contract or asset having the effect of a derivative contract, means assets which, before or at the time the contract is entered into, are transferred by the insurance company subject to a condition that such assets (or where the assets transferred are securities, equivalent securities) will be returned to the company on completion of that contract;.”\n(5) After the definition of “option”, insert—\n““permitted asset exposure limit” has the meaning set out in paragraph 3 of Schedule 12 to these Regulations;\n“permitted counterparty exposure limit” has the meaning set out in paragraph 4 of Schedule 12 to these Regulations;.”\n(6) After the definition of “Treasury Bills”, insert—\n““variation margin” means—\n(a) in respect of a derivative contract, or a contract having the effect of a derivative contract, assets (other than assets transferred by way of initial margin) which, at the relevant date, have been transferred by, to, or for the benefit of the company in pursuance of a condition in that contract or a related contract; and\n(b) in respect of an asset having the effect of a derivative contract, assets which, at the relevant date, have been transferred by, to, or for the benefit of, the company in pursuance of a contractual right conferred, or obligation imposed, by the holding of the asset having the effect of a derivative contract;.”\n(7) In sub-paragraph (a) of paragraph (3), for the words from “and the lower of” to “these Regulations)” substitute—\n““and the sum of the aggregate amount available under all letters of credit established for the benefit of the company with the same counterparty, the aggregate amount of all guarantees issued for the benefit of the company by that counterparty and the amount of any exposure of the company to that counterparty does not exceed the permitted counterparty exposure limit for that counterparty.”.”\n(8) In sub-paragraph (b)(ii) of paragraph (3), replace the full stop by “; and” and insert—\n“(iii) where the assets give rise to exposure to a counterparty, the exposure of the company to that counterparty, when added to the aggregate amount available under all letters of credit established for the benefit of the company with that counterparty, and to the aggregate amount of all guarantees issued for the benefit of the company by that counterparty, does not exceed the permitted counterparty exposure limit for that counterparty.”.\n(9) For paragraph (4) substitute—\n“(4) For the purposes of paragraph (3) above—\n(a) the aggregate amount available under letters of credit established with a counterparty shall be taken not to exceed the sum of the aggregate amount of all debts and the aggregate value of all obligations in respect of which those letters of credit were established; and\n(b) the aggregate amount of guarantees issued by a counterparty shall be taken not to exceed the sum of the aggregate amount of all debts and the aggregate value of all obligations so guaranteed; and\n(c) assets which are securing any other debt owed to (or obligation to be fulfilled for the benefit of) the company shall be treated as if they were assets of the company.”.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "footnote",
      "label": "f1",
      "text": "The definition of “equivalent securities” was inserted by S.I. 1995/3248, reg. 2(8)."
    },
    {
      "type": "footnote",
      "label": "f2",
      "text": "Regulation 57 was substituted by S.I. 1995/3248, reg.12."
    },
    {
      "type": "footnote",
      "label": "f3",
      "text": "Schedule 12 was substituted by S.I. 1995/3248, reg.20 and Schedule 2."
    },
    {
      "type": "footnote",
      "label": "f4",
      "text": "Paragraph (3) was substituted by S.I. 1995/3248, reg.3."
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1996/942/regulation/3",
    "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."
}