PART IVPRIORITY OF PAYMENT OF INSURANCE CLAIMS IN WINDING UP ETC.
Preferential debts: long term business of a non-transferring composite insurer23.
(1)
For the purpose of compliance with the requirement in regulation 22(3), the long term business assets of a non-transferring composite insurer must be applied in discharge of the following debts and in the following order of priority—
(a)
relevant preferential debts;
(b)
long term insurance debts.
(2)
Relevant preferential debts rank equally among themselves, unless the long term business assets, any available general business assets and other assets (if any) applied in accordance with regulation 24 are insufficient to meet them, in which case they abate in equal proportions.
(3)
Long term insurance debts rank equally among themselves, unless the long term business assets available after the payment of relevant preferential debts and any available general business assets and other assets (if any) applied in accordance with regulation 25 are insufficient to meet them, in which case they abate in equal proportions.
(4)
So far as the long term business assets, and any available general business assets, which are available for the payment of unsecured creditors are insufficient to meet the relevant preferential debts, those debts (and only those debts) have priority over the claims of holders of debentures secured by, or holders of, any floating charge created by the insurer over any of its long term business assets, and must be paid accordingly out of any property comprised in or subject to that charge.
(5)
The order of priority specified in paragraph (1) applies for the purposes of any payment made in accordance with paragraph (4).
(6)
For the purposes of this regulation—
“available general business assets” means those general business assets which must be applied in discharge of the insurer’s outstanding long term business preferential debts, in accordance with regulation 22(8);
“long term insurance debt” means an insurance debt which is attributable to the long term business of the insurer;
“relevant preferential debt” means a preferential debt which is attributable to the long term business of the insurer.