What are the fully funded requirements?
INSPRU includes guidance on what we expect you to do to meet the requirement for an ISPV to be ‘fully funded’. It includes rules applying to a UK ISPV’s assets and liabilities and its contractual arrangements which ensure the ISPV remains fully funded. To be fully funded, we think an ISPV must: • have received the proceeds of issuing debt or other method by which it is financed; • in each contract of reinsurance, include terms which secure that its aggregate maximum liability (i.e. its exposure) under its contracts of reinsurance does not exceed the amount of its assets at any time; • ensure that under terms of any debt it issues or other financing arrangement used to fund its reinsurance liabilities the rights of providers of that debt or other financing are fully subordinated to the claims of creditors under its contracts of reinsurance; and • only enter into contracts or otherwise assume obligations which are necessary for it to give effect to the reinsurance special purpose for whi
