Openings in Financial Services

There shall be excluded from the operation of section 442A any policy to which paragraph 10 of Schedule 1 to the Financial Services Act 1986does not apply by reason of Note (1) to that paragraph any annuity contract under which  payment of the annuity is to commence not later than 12 months after the date of the contract, and no surrender value is capable of being produced. There shall be excluded from section 431C any reinsurance business where  in relation to the reinsurance arrangement

 

  The cedant company is a 90% subsidiary of the reinsurer, or the reinsurer is a 90% subsidiary of the cedant company, or each is a 90% subsidiary of another body corporate, the cedant company is either resident in the United Kingdom or is an overseas life insurance company which, as respects the reinsurance arrangement or, as the case may be, the business being reinsured, is within the charge to corporation tax by virtue of section 11 of the Taxes Act, and

 

  The business being reinsured is basic life assurance and general annuity business in the hands of the cedant company; or the business is of any of the descriptions specified in section 431D(1)(b) of the Taxes Act; or the business—  is the reinsurance of the business of a company which is not resident in the United Kingdom, is not business of any of the descriptions specified in section 431D(1)(b) of the Taxes Act, and is linked business where the linked assets concerned consist wholly or substantially of land in the United Kingdom.

For the purposes of paragraph (4) above, the fact that a premium payable by the cedant company under the reinsurance arrangement is calculated so as to reflect a guarantee by that company under the terms of the policy that it will issue a different policy at a future date shall not be taken to mean that risks other than mortality risk or morbidity risk are being reinsured under the reinsurance arrangement.