Independence from management and business relationships
5.—(1)  In these Regulations, subject to regulation 14 or 23, as the case may be, a director shall be considered to be independent from management and business relationships with an insurer if —
(a)the director has no management relationship with the insurer or any of its subsidiaries; and
(b)the director has no business relationship with the insurer or any of its subsidiaries, or with any officer of the insurer,
that could interfere, or be reasonably regarded as interfering, with the exercise of the director’s independent business judgment with regard to the interests of the insurer.
(2)  Without prejudice to paragraph (1)(a), a director shall not be considered to be independent from management relationships with an insurer or any of its subsidiaries if —
(a)he is employed by the insurer or any of its subsidiaries, or has been so employed at any time during the current financial year or any of the preceding 3 financial years of the insurer or any of its subsidiaries;
(b)any member of his immediate family —
(i)is employed by the insurer or any of its subsidiaries as an executive officer whose compensation is determined by the Remuneration Committee or the Board of the insurer or any of its subsidiaries; or
(ii)has been so employed at any time during the current financial year or any of the preceding 3 financial years of the insurer or any of its subsidiaries; or
(c)he is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the management of the insurer or any of its subsidiaries.
(3)  Without prejudice to paragraph (1)(b) but subject to regulation 14 or 23, as the case may be, a director shall not be considered to be independent from business relationships with the insurer or any of its subsidiaries if —
(a)he is a director, a substantial shareholder or an executive officer of any corporation, or a partner of a firm or a limited liability partnership or a sole proprietor, where such corporation, firm, limited liability partnership or sole proprietor carries on business for purposes of profit to which the insurer or any of its subsidiaries has made, or from which the insurer or any of its subsidiaries has received, payments in the current or immediately preceding financial year; or
(b)he is receiving or has received any compensation from the insurer or from any of the insurer’s subsidiaries, other than compensation received for his services as a director or as an employee, at any time during the current or immediately preceding financial year of the insurer.
(4)  In this regulation, “officer”, in relation to an insurer, includes —
(a)a director, a secretary or an employee of the insurer;
(b)a receiver or manager of any part of the undertaking of the insurer appointed under a power contained in any instrument; and
(c)the liquidator of the insurer appointed in a voluntary winding-up.