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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Recognised Jurisdictions and Funds
Declaration Notices
Financial Markets Tribunal
Archive
Rulebook Modules
Prudential — Insurance Business Module (PIN) [VER15/01-18]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices

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  • PIN 9.4.7 Guidance

    The terms and conditions of an arrangement or letter of credit will normally be expected to include provisions having the following effect:

    a. the arrangement or letter of credit is not revocable or cancellable at the option of the Insurer, and contains no provision for automatic cancellation on the insolvency of the Insurer;
    b. the DFSA has the right to apply assets deposited, or to draw upon the letter of credit, for the purpose of meeting Insurance Liabilities of the Insurer and any expenses incidental to that activity;
    c. in the case of a custody arrangement, the Insurer is prohibited from applying, directly or indirectly, the assets deposited, except in the following manners:
    i. in settlement of Insurance Liabilities of the Insurer that are in respect of the Insurance Business that is in run-off;
    ii. in exchange for fair value, for other assets of a type described in PIN Rule 4.7.3 and deposited with the same custodian under the same conditions;
    iii. in consideration for the transfer to another Insurer of Insurance Liabilities of the Insurer that are in respect of the Insurance Business that is, or has been placed into, run-off;
    iv. withdrawal from the custody of the custodian for deposit with a different custodian approved by the DFSA;
    v. withdrawal from the custody of the custodian in accordance with PIN Rule 9.4.12; or
    vi. withdrawal from the custody of the custodian in accordance with a written notice issued by the DFSA revoking or varying the collateral notice; and
    d. in the case of a letter of credit, the amount of the letter of credit may be reduced only:
    i. in order to achieve, in accordance with PIN Rule 9.4.12 a reduction in the amount of assets made available by the Insurer; or
    ii. in accordance with a written notice issued by the DFSA revoking or varying the collateral notice.

    Derived from DFSA RM06/2004 (Made 16th September 2004). [VER1/09-04]