# The Insurance Companies Regulations 1994, Regulation 19: Long term classes III, VII and VIII


(1) For long term business of class III, VII or VIII the required margin of solvency shall be determined in accordance with paragraphs (2) to (5) below.
(2) In so far as an insurance company bears an investment risk, the first calculation shall be applied.
(3) In so far as—
(a) an insurance company bears no investment risk, and
(b) the total expired and unexpired term of the relevant contract exceeds five years, and
(c) the allocation to cover management expenses in the relevant contract has a fixed upper limit which is effective as a limit for a period exceeding five years,
the first calculation shall be applied, but as if regulation 18(2)(a) above contained a reference to 1 per cent. instead of 4 per cent.
(4) If neither paragraph (2) nor paragraph (3) above applies, then, subject to paragraph (5) below, the required margin of solvency is zero.
(5) Where an insurance company covers a death risk, a sum arrived at by applying the second calculation (regulation 18(4) and (5) above being disregarded) shall be added to any required margin of solvency, including a required margin of solvency of zero, arrived at under paragraph (2), (3) or (4) above.

---
Source: https://www.legislation.gov.uk/uksi/1994/1516/regulation/19 (the official version)
Page: https://openlegislation.uk/insurance-companies-regulations-1994/regulation-19
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.