Regulation 5 Debts and other rights

Regulation 48 of the 1994 Regulations^f1 (debts and other rights) shall be amended as follows.

For paragraph (10), substitute—

“(10)

The value of any right to recover assets transferred by way of initial margin shall be determined—

(a)

where the initial margin was a payment in cash, as if there were a debt owed to the insurance company for that amount, and

(b)

where the initial margin took the form of a transfer of securities, as if there were a debt owed to the insurance company of an amount equal to the value of such securities as determined in accordance with this Part of these Regulations.”.

After paragraph ( 10) insert—

“(11)

The value of any rights arising under a derivative contract to which regulation 55 below does not apply, or under a contract or asset having the effect of a derivative contract to which regulation 55 below does not apply, shall be the value of any right to recover assets transferred by way of initial margin together with the value of any other unconditional right to receive a specified amount.

(12)

This regulation shall not apply to any rights (other than debts due) in respect of—

(a)

investments in dependants;

(b)

securities or beneficial interests in a limited partnership;

(c)

units or other beneficial interests in a collective investment scheme;

(d)

a derivative contract, except as provided under paragraphs (10) or (11) above; or

(e)

a contract or asset which has the effect of a derivative contract except as provided under paragraphs (10) or (l l) above or under regulation 56(4) or 56(5) below.”.