Adequacy of premiums: long term business
18. After section 35A of the 1982 Act insert—
“Adequacy of premiums: long term business.
35B.—(1) Before entering into a contract of insurance the effecting of which constitutes the carrying on of long term business, a UK company shall satisfy itself that the aggregate of—
(a)the premiums payable under the contract and the income which will be derived from them; and
(b)any other resources of the company which will be available for the purpose,
will be sufficient, on reasonable actuarial assumptions, to meet all commitments arising under or in connection with the contract.
(2) A UK company shall not rely on other resources for the purposes of subsection (1) above in such a way as to jeopardise the solvency of the company in the long term.”