S.L. 386.10 Art. 15ALiability of cells carrying on exclusively business of affiliatedinsurance with certain conditions.

(1) Notwithstanding the provisions of regulations 14 and

15, where a cell:

(a) exclusively carries on business of affiliated insurance;

(b) holds eligible basic own funds to cover the Solvency Capital Requirement which shall not be less than the Minimum Capital Requirement as though the said cell were an authorised insurance undertaking or an authorised reinsurance undertaking, in accordance with the requirements of article 15 and 17 of the Insurance Business Act, and any regulations and Insurance Rules made for the purposes of the said articles; and

(c) is specifically permitted by the memorandum and articles of association of the cell company, the cell company may, by specific written agreement to that effect, provide that only the cellular assets of that cell may be utilised to satisfy the cellular liability of such cell:

Provided that where the business of the cell in question relates to compulsory insurance, the cell company shall be obliged to establish to the satisfaction of the competent authority sufficient guarantees for the protection of insureds, policyholders, creditors or other interested parties;

(2) For the purposes of this regulation:

"business of affiliated insurance" means the business of a cell which carries on business of insurance or reinsurance restricted to risks originating from:

(a) an undertaking being the sole holder of the cell shares of the particular cell; or

(b) undertakings in which the undertaking referred to in paragraph (a) holds a participating interest; and

"compulsory insurance" means any insurance which a person is required by law to have in effect.

(3) Specific written agreements entered into in terms of sub-regulation (1) shall be operative as between the contracting parties, and shall not be of prejudice or advantage to third parties.