Appendix D

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Service Level Agreement 1998 between the Treasury and GAD

Annex A – Allocation of Priority for Detailed Scrutiny of Life Insurers

Priority Description Other indicators (note: these indicators are subordinate to the description, and are merely to give some broad assistance. They are no substitute for judgement, both where a higher or lower priority may be justified) Target
1 As at present, the allocation of priority 1 will denote a company which either is not demonstrating that it holds the required minimum margin or else where there are significant problems which lead GAD to believe that it does not meet the requirements under proper bases.  Within two weeks
2 This priority denotes those companies that there are significant and substantial concerns.
  1. The cover for the RMM is less than 1.25x
  2. There is evidence of material noncompliance with the valuation regulations
Within four months
3 This priority denotes companies where there are sufficient concerns to warrant early attention, or there are other reasons to require scrutiny early in the cycle.
  1. The cover for the RMM is less than 1.5x
  2. There is evidence of a nontrivial, but not material noncompliance with the valuation regulations
  3. The company was in priority 1 or 2 for the previous year
  4. A company visit is scheduled for September to January (or equivalent for nonDecember companies)
  5. The company had commenced trading, but was authorised for less than eighteen months at the valuation date.
Within six months
4 Companies which warrant a full scrutiny for any reason, but would otherwise not fall within a category to ensure this.
  1. The cover for the RMM is less than 2 x
  2. The company was in priority 3 in the previous year
  3. There is evidence of noncompliance with less important regulations
  4. The company did not receive a full scrutiny in either of the previous two years
  5. A company visit is scheduled for February to August (or equivalent for non-December companies).
Within nine months
5 Companies which do not qualify for priority 4 or higher after the initial scrutiny Cover for the RMM is more than 2 x, and scrutiny within the last two years Within eleven months

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