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A hybrid capital instrument cannot form part of the capital resources of an insurance firmG unless it meets the following conditions:

(a) The claims of the creditors must rank behind those of all unsubordinated creditors;
(b) No amounts due may be payable:
(i) At a time when the insurance firmG is in breach of Paragraph CA-1.2.1; or
(ii) If the payment would mean that the insurance firmG would be in breach of Paragraph CA-1.2.1;
(c) The only events of default must be non-payment of any amount falling due under the terms of the instrument or the winding-up of the insurance firmG ;
(d) The remedies available to the subordinated creditor in the event of non-payment or other breach of the written agreement or instrument must be limited to petitioning for the winding up of the insurance firmG or proving the debt in a liquidationG of the insurance firmG ;
(e) Any events of default and any remedy described in (d) must not prejudice the matters in (a) and (b);
(f) In addition to the requirements about repayment in (a) and (b), the debt must not become due and payable before its stated final maturity date (if any) except on an event of default complying with (c);
(g) The debt agreement or terms of the instrument are governed by the laws of Bahrain;
(h) To the fullest extent permitted under the laws of the relevant jurisdictions, creditors must waive their right to set off amounts they owe the insurance firmG against subordinated amounts included in the insurance firm'sG capital resources owed to them by the insurance firmG ;
(i) The terms of the instrument must be set out in a written agreement that contains terms that provide for the conditions set out in (a) to (h);
(j) The debt must be unsecured and fully paid up; and
(k) The insurance firmG has obtained an external legal opinion stating that the requirements in (a) to (j) have been met.
Amended: January 2007
(2 Versions)
Up to Jun 30 2007Jul 1 2007 onwards
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