The Insurance Companies (“The Long-term Business Fixed Capital”) Regulations 2023

The Insurance Companies (“The Long-term Business Fixed Capital”) Regulations 2023 (SI 2023/1236) were published on legislation.gov.uk, the official UK website for the publication of legal government documents. The new regulations specify the definition of „structural assets“ held by insurers that are part of their long-term business and capital base. Structural assets are excluded from the typical (trading) tax that arises when the value of insurers‘ assets increase or dividends or any other forms of benefits are derived from such assets.
Specifically, the new regulations define structural assets as
– non-with-profits funds (funds that pool together policyholders‘ premiums and invest them in various assets such as stocks, bonds, property, and other investments);
– investments in subsidiaries (loans, bonds, equity shares) if such subsidiaries meet specific requirements (they are an insurance company, a non-UK resident company, or provide significant services to the insurance company);
– property that is being used by the insurer in its business operations (occupied);
– investment in subsidiaries (loans, bonds, equity shares) if the insurance company itself conducts mutual life assurance business and the subsidiary is NOT an investment or matching adjustment company;
– investment in a matching adjustment company where the insurer’s reason for holding such investments is for the purposes of applying a matching adjustment; and
– goodwill.