S.L. 403.16 Art. 15Producing security in lieu of making deposit.

(1) Notwithstanding anything contained in these a regulations, subject to the following sub-regulations of this regulation, any insurer to whom regulation 3 or 4 applies may, in like manner, satisfy the requirements of that regulation by producing to the competent authority, in lieu of making a deposit with a custodian of assets under this Part of these regulations, a security on assets for an amount equal to at least the appropriate required amount and maintaining security on those assets for that amount at all times during the currency of the security.

(2) The content of every security produced under sub-regulation (1) shall have to be agreed in advance between the insurer, the issuer and the competent authority; and the security shall have to be reinstated by the depositor to secure the appropriate required amount each time the level of the amount is likely to fall, or falls, below the required amount.

(3) The provisions of regulations 10, 12, 13 and 14 shall apply in relation to a security as they apply in relation mutatis mutandis to a deposit.

(4) Where -

(a) an insurer makes a deposit with a custodian of assets in accordance with regulation 9 and, at a later date, elects to substitute that deposit with a security to be produced to the competent authority in accordance with sub-regulation (1); or

(b) an insurer produces to the competent authority a security in accordance with sub-regulation (1) and, at a later date, elects to substitute that security with a deposit to be made with a custodian of assets in accordance with regulation 9, in every case, the insurer shall make an application in writing to the competent authority in that regard, giving the relevant details, and -

(i) if the application is to substitute a deposit with a security, the competent authority shall direct in writing the insurer to carry out the substitution in accordance with sub-regulations (1) and (2) and, when the security is produced, the custodian to release from custody the deposit; and

(ii) if the application is to substitute a security with a deposit, the competent authority shall direct in writing the insurer to carry out the substitution in accordance with regulation 9, and when the deposit is made and held in custody, the issuer to terminate the security without prejudice to any claims which the competent authority may have, or may have had, against the security prior to its termination.