8. The Fourth Schedule to the principal Regulations is amended —
(a)
by deleting the words “the interest rate risk” in paragraph 2(9) and substituting the words “any interest rate risk”;
(b)
by deleting sub-paragraphs (a) and (b) of paragraph 4(1) and substituting the following sub-paragraphs:
“(a)
in an increasing interest rate environment, the difference between —
(i)
the sum of —
(A)
the aggregate of liabilities in respect of the policies of the fund determined in the manner provided in regulation 19 (1), adjusting the interest rate assumption upwards by an appropriate adjustment set out in Table 10 of the Sixth Schedule; and
(B)
the corresponding C1 requirement calculated according to paragraph 3 of the Third Schedule; and
(ii)
the sum of —
(A)
the aggregate of liabilities in respect of the policies of the fund determined in the manner provided in regulation 19 (1); and
(B)
the corresponding C1 requirement calculated according to paragraph 3 of the Third Schedule; and
(b)
in a decreasing interest rate environment, the difference between —
(i)
the sum of —
(A)
the aggregate of liabilities in respect of the policies of the fund determined in the manner provided in regulation 19 (1), adjusting the interest rate assumption downwards (subject to a minimum interest rate of zero) by an appropriate adjustment set out in Table 10 of the Sixth Schedule; and
(B)
the corresponding C1 requirement calculated according to paragraph 3 of the Third Schedule; and
(ii)
the sum of —
(A)
the aggregate of liabilities in respect of the policies of the fund determined in the manner provided in regulation 19 (1); and
(B)
the corresponding C1 requirement calculated according to paragraph 3 of the Third Schedule.”;
(c)
by deleting sub-paragraph (3) of paragraph 4 and substituting the following sub-paragraphs:
“(3) The liability adjustment requirement in respect of a non-participating fund or an investment-linked fund shall be —
(a)
in an increasing interest rate environment, the difference between —
(i)
the modified liability in respect of policies of the fund determined in the manner provided in paragraph 4(2) (i) of the Third Schedule, adjusting the interest rate assumption upwards by an appropriate adjustment set out in Table 10 of the Sixth Schedule; and
(ii)
the modified liability in respect of policies of the fund determined in the manner provided in paragraph 4(2) (i) of the Third Schedule; and
(b)
in a decreasing interest rate environment, the difference between —
(i)
the modified liability in respect of policies of the fund determined in the manner provided in paragraph 4(2) (i) of the Third Schedule, adjusting the interest rate assumption downwards (subject to a minimum interest rate of zero) by an appropriate adjustment set out in Table 10 of the Sixth Schedule; and
(ii)
the modified liability in respect of policies of the fund determined in the manner provided in paragraph 4(2) (i) of the Third Schedule.
(4) The liability adjustment requirement in respect of a participating fund shall be —
(a)
in an increasing interest rate environment, the difference between —
(i)
the modified minimum condition liability in respect of policies of the fund determined in the manner provided in paragraph 4(3) (i) of the Third Schedule, adjusting the interest rate assumption upwards by an appropriate adjustment set out in Table 10 of the Sixth Schedule; and
(ii)
the modified minimum condition liability in respect of policies of the fund determined in the manner provided in paragraph 4(3) (i) of the Third Schedule; and
(b)
in a decreasing interest rate environment, the difference between —
(i)
the modified minimum condition liability in respect of policies of the fund determined in the manner provided in paragraph 4(3) (i) of the Third Schedule, adjusting the interest rate assumption downwards (subject to a minimum interest rate of zero) by an appropriate adjustment set out in Table 10 of the Sixth Schedule; and
(ii)
the modified minimum condition liability in respect of policies of the fund determined in the manner provided in paragraph 4(3) (i) of the Third Schedule.”; and
(d)
by deleting the words “appropriate proportion of its contingent liabilities” in paragraph 9(2) and substituting the words “amount in respect of its contingent liabilities which is determined as the product of the value of the contingent liabilities and the appropriate risk factor”.