Guidance for Regulated Entities Ceasing Business and Surrendering Authorisation

Guidance for Regulated Entities preparing to cease regulated business and voluntarily surrender of an authorisation, registration or licence Financial Services Act 2008 or Insurance Act 2008 STATUS OF GUIDANCE The Isle of Man Financial Services Authority (“the Authority”) issues guidance for various purposes, including to illustrate best practice, to assist regulated entities to comply with relevant legislation and to provide examples or illustrations. Guidance is, by its nature, not law, however it is persuasive. Where a person follows guidance, this would tend to indicate compliance with the legislative provisions, and vice versa. Contents

1. Glossary 3
2. General Overview 4
3. Information to be provided to the Authority prior to surrender 5 Appendix 1: Table of Information required in respect of a proposed winding up of regulated business and surrender of authorisation/registration/licence 7 Appendix 2: PII run-off cover considerations 16 Appendix 3: Supplementary guidance for general insurance intermediaries including directors’ declaration 17 Appendix 4: Supplementary guidance for insurance managers including directors’ declaration 19 Appendix 5: Supplementary guidance for Authorised Insurers/Permitted Insurers including directors’ declaration and list of insurance contracts 21 Appendix 6: Financial Services Act 2008 – Regulated Entity declaration 27 Glossary Application Notification to the Authority requesting surrender or partial surrender of an authorisation, licence or registration. Authorised Insurer A person who is authorised, or permitted under Section 5 of the IA08 to carry on insurance business in or from the Isle of Man. An authorised insurer is one that is incorporated and domiciled in the Isle of Man whereas a permitted insurer is a foreign insurer that is incorporated in another jurisdiction but has a place of business in the Isle of Man and is carrying on insurance business in or from that place of business in the Isle of Man. Business Name As registered under The Registration of Business Names Act 1918. Claim The interpretation of “Claim” is not limited to an insurance claim but may include for example an assertion of a legal right or interest (where the context allows). FSA08 Financial Services Act 2008. IA08 Insurance Act 2008. Insurance Intermediary A person registered under Section 25 of the IA08 and who for remuneration brings together, either directly or through the agency of a third party, with a view to the insurance of risks, persons seeking insurance and insurers and carries out work preparatory to the conclusion of contracts of insurance. Insurance Manager A person registered under Section 25 of the IA08, not being an employee of an insurer who: a) provides management services for one or more insurers; or b) holds that person out as a manager in relation to one or more insurers. PII Professional Indemnity Insurance. Regulated Entity A person who is authorised, licensed or registered under the FSA08 or IA08. The Authority Isle of Man Financial Services Authority. General Overview The cessation of regulated business is a major event in the life cycle of a business. In support of the Authority’s objective to provide appropriate protection to policyholders and customers, we aim to ensure that surrenders and/or winding ups [1] are orderly and solvent. The Authority carefully scrutinises any application from a Regulated Entity that proposes to cease conducting regulated business. This guidance sets out the Authority’s high-level approach for the orderly cessation, or partial [2] cessation, of regulated business. It should be noted that detailed requirements vary between industry sectors and the Authority’s requirements reflect underlying differences in business, risk and regulatory frameworks. This guidance does not apply to Professional Officers licensed under the Financial Services Act 2008 to carry out services under Class 4 – sub-class (6) only, of the Regulated Activities Order 2011. Such persons should contact the Portfolio Supervision Team to discuss surrender requirements. A Regulated Entity must have ceased regulated business before it can surrender its authorisation, registration or licence; otherwise it commits an offence. It is an offence, knowingly or recklessly, to give the Authority information that is materially false or misleading (Section 52 IA08, Section 40 FSA08). It should be noted that no insurance company may be wound up voluntarily (see paragraph 6 of Schedule 3 to the IA08). An Isle of Man Authorised Insurer must surrender its insurance authorisation before it can be wound up voluntarily unless a court has determined otherwise. To effect an orderly surrender, the Authority expects the directors (or the Isle of Man resident officer or senior management where appropriate) of a Regulated Entity to: Evidence and take proper steps to assure themselves that the Regulated Entity has ceased regulated business (or ceased the activity linked to the partial surrender); Evidence and take proper steps to assure themselves that policyholders or clients have been made sufficiently aware of the Regulated Entity’s intention to surrender and the options that are available to them, and that the Regulated Entity has properly transferred or terminated client relationships; Take proper steps to secure the Regulated Entity’s records, including client and AML/CFT records, and to allow future access to the records if and when required; and Address the risk of subsequent Claims or other risks that may arise in respect of the Regulated Entity’s former business, taking action to appropriately manage, mitigate or insure such risks. Information to be provided to the Authority prior to surrender To inform the Authority’s consideration of the surrender (or partial surrender) and any related matters, a Regulated Entity should complete and submit Appendix 1 : Table of Information in respect of a proposed winding up of a Regulated Entity’s business and its subsequent surrender of authorisation, registration or licence. It should be noted that the Authority will not start considering an application to surrender until it is in receipt of a fully completed application. Any notice period that applies will not commence until a fully completed application has been received by the Authority. In addition, before finalising the surrender, the Authority requires a Regulated Entity to complete and submit the relevant declaration in order to satisfy itself that the Regulated Entity is not undertaking activity that requires it to maintain its authorisation/ registration/licence with the Authority: Appendix 3 : General Insurance Intermediary Declaration (including supplementary guidance). Appendix 4 : Insurance Manager Declaration (including supplementary guidance). Appendix 5 : Authorised Insurer/Permitted Insurer Declaration and List of Insurance Contracts as required (including supplementary guidance). Appendix 6 : Financial Services Act 2008 Firm Declaration . All regulatory reporting requirements up to the date of surrender are unchanged unless agreed otherwise by the Authority, and the Regulated Entity should make appropriate arrangements to ensure it continues to meet its regulatory obligations. The Authority may consider requests to alter reporting requirements on a case-by-case basis. Requests should include a clear rationale and consideration of associated risks. How to help the Authority consider and process the surrender In practice, an orderly surrender typically follows a dialogue over several months, the time frame being impacted by the Regulated Entity’s plans / timeline; the complexity of the surrender and related matters; and the completeness of the information provided. To facilitate this process, we encourage you to: Advise the Authority at an early stage; Supply supporting and background information, and explanatory material [3] ; Nominate contact(s) in the Regulated Entity who are familiar with the plans and can answer questions; and Wherever possible, send documents in a searchable format. There will be a delay in processing the application if information is inaccurate or incomplete. You must notify the Authority immediately if there is a change to the information provided and/or inaccurate information has been provided. Any notice period that applies will not commence until a fully completed application has been received by the Authority Appendix 1: Table of Information required in respect of a proposed winding up of regulated business and surrender of authorisation/registration/licence [4] This table should be completed in ink and block capitals or typed. Item Applicable? Attachment? Comments - If not applicable, state why. If information is to be provided at a later date, state the date it will be provided by. Plan for winding up the regulated business and surrender of authorisation/registration/licence (the “winding-up plan”) The reasons for the surrender. Yes Yes No

Is this application in respect of a full or partial surrender? Yes Full Partial

The proposed surrender date [5] . Yes Yes No

The intended date before surrender at which regulated business will cease. Yes Yes No

Proposals for ceasing regulated business, including transferring policyholders or clients to other providers and terminating client relationships. Yes Yes No

Proposals for terminating relationships with policyholders, clients and other applicable counterparties or customers. Insurance Managers should notify the insurance companies for whom the Insurance Manager has provided insurance management services of their intention to cancel their registration as an Insurance Manager under the IA08. Insurance Intermediaries should notify all insurers for whom the intermediary acts; they should provide an outline of the steps taken to advise existing general insurance clients of the intention to cease providing intermediation activities and the advice that has been given to them as to how they can make alternative arrangements (or what alternative arrangements have been made in relation to their policies). Yes No Yes No

Contingency plans if the surrender takes longer than expected. For example, if there is a delay to the transfer of an item of business, how will that residual business be serviced, and what financial implications would this have? Yes No Yes No

Financial and reporting matters Projections of income and expenditure up to the planned surrender date, including projections of operating expenses [6] [7] . Yes No Yes No

Arrangements for supplying audited financial statements and other financial information (e.g. management letter and audit reports), where the Regulated Entity normally provides these. Considerations should include: Any exemptions already in place; The surrender date relative to the financial year-end (how much of the last financial year has involved regulated activity); Matters arising from the Regulated Entity’s most recent financial statements, auditor’s management letter or report; The size, nature and complexity of the Regulated Entity’s operations and its licence permissions; and Whether the Regulated Entity is to be placed in members’ voluntary liquidation (which involves a statutory declaration of solvency). Yes No Yes No

For an Authorised Insurer, the Authority requires audited financial statements from the period of the last audited balance sheet date to the later of: the date (“Date T”) at which: the insurance liabilities were permanently terminated; the Authorised Insurer has no outstanding insurance related balances; and all liens and charges relating to insurance activities are removed; or a date later than Date T, subject always to the limitations on accounting periods set out in the Companies Act 1982. Where at the last audited balance sheet date, the Authorised Insurer had fully and permanently terminated its insurance liabilities and the directors are able to confirm that Date T (as defined above) was on, or prior to, the last audited balance sheet date, the Authority may exempt the Authorised Insurer from the requirement to submit audited financial statements. Yes No Yes No

In the case of Regulated Entities that normally produce a Clients’ Assets Report (“CAR”), in deciding whether a CAR should be provided up to the date of surrender and whether this is reviewed by the auditor, consideration should be given to: Matters arising from the Regulated Entity’s most recent CAR, auditor’s management letter or auditor’s report; The CAR frequency and factors considered in determining the frequency per the Authority’s risk based approach; and The number of client money breaches that have occurred. Yes No Yes No

Business planning Changes to activities, services or products as regulated activity is wound up. Yes No Yes No

Organisation, corporate governance and compliance Proposals for maintaining services to policyholders and clients in the period prior to surrender. Yes No Yes No

Proposals for changing the Regulated Entity’s name (including any Business Names), and any subsidiary company name(s), after surrender to remove any restricted words which could indicate regulated activities in the name. Yes No Yes No

Where a Regulated Entity holds “PII” [8] , proposed arrangements for run-off PII, including the proposed extension/run-off period and rationale for this period. Please refer to Appendix 2 in respect of matters for consideration. Note: If the Regulated Entity is being dissolved, you should obtain insurance advice that any PII cover will remain in effect, notwithstanding the liquidation and eventual dissolution of the Regulated Entity. Yes No Yes No

How long the Regulated Entity plans to remain in existence post-surrender. If it is proposed that the Regulated Entity will be dissolved, confirm the process by which a client can make a claim after that dissolution. Yes No Yes No

Plans for nominee companies and other subsidiaries, whether regulated or not. Yes No Yes No

Client and policyholder services Copies of notifications to policyholders or clients advising them of the Regulated Entity’s intention to surrender and the options that are available to them [9] . Yes No Yes No

For general Insurance Intermediaries, a copy of the notification issued to insurers (for whom the intermediary acted and has active terms of business agreements in place) setting out its intention to cancel the registration. Yes No Yes No

Confirmation of plans to manage policyholders or clients who have lost contact. Yes No Yes No

Details of any unresolved or undischarged complaints against the Regulated Entity and, if applicable, details of the steps taken under the Regulated Entity’s complaints procedures and an explanation of the arrangements made for the future consideration of any such complaints. Yes No Yes No

Arrangements to cease holding clients’ assets. Yes No Yes No

Any assets that need to be vested with IoM Treasury (Financial Governance Division) as bona vacantia. Yes No Yes No

Record retention and access Arrangements for storage and location of the Regulated Entity’s accounting records, sufficient to show and explain transactions effected by it on behalf of its clients. Yes No Yes No

Arrangements for storage and location of the Regulated Entity’s internal organisation and risk management systems. Yes No Yes No

Arrangements for storage and location of the Regulated Entity’s policyholder or client records. Yes No Yes No

Arrangements for storage and location of the Regulated Entity’s AML/CFT records. Yes No Yes No

Arrangements to access the records after the Regulated Entity is liquidated and dissolved (if that is planned). Yes No Yes No

Outsourcing An overview of any transitional arrangements involving outsourcing, material delegation, or being managed by another Regulated Entity. Yes No Yes No

Regulation Details of any outstanding regulatory matters that need to be concluded. Yes No Yes No

Details of any overseas regulator who regulates some or all of the parties to the structure. The Authority will contact the regulator. Yes No Yes No

Liquidators If there is an intention to go into liquidation after ceasing regulated activity, please provide the Authority with an overview of the planned liquidation, including time scales. Yes No Yes No

Appendix 2: PII run-off cover considerations For Regulated Entities normally required to obtain PII, a period of two years run-off cover is usual practice where there are no related high-risk indicators. This period may be extended up to six years post surrender date/date of cessation of regulated business for surrenders with high-risk indicators, or may be reduced, as appropriate. Examples of high risk indicators include, but are not limited to: The Regulated Entity has a weak track record in respect of adequately dealing with complaints, or has ongoing claim(s) or a high likelihood of having future complaints that may result in legal proceedings being issued The Regulated Entity has recent or outstanding material regulatory issues Client types such as a high proportion of retail clients (i.e. quantum of AUM / customer numbers). Examples of low risk indicators include, but are not limited to: Where group PII policy arrangements adequately cover the Regulated Entity, this is usually considered acceptable Where the Regulated Entity has wound down and ceased the majority of its regulatory business at least one year before the date of surrender, the PII run-off period should take this into account Where the book of business is being transferred to another Regulated Entity, and the Authority is satisfied in respect of the acquirer assurances obtained. The Regulated Entity is responsible for arranging and maintaining the required cover for the agreed period; any deviation from this post surrender must be immediately discussed with the Authority. Appendix 3: Supplementary guidance for genera l insurance intermediaries including directors’ declaration Supplementary guidance Regulation 8 of the Insurance Intermediaries (General Business) Regulations 2020 deals with the requirements for cancellation of registration. The registered Insurance Intermediary must provide at least 28 days’ notice of its intention to seek a cancellation of its registration under Section 26A of the IA08. There will be a delay in processing the cancellation of the registration if information is inaccurate or incomplete. You must notify the Authority immediately if there is a change to the information provided and/or inaccurate information has been provided. It is an offence, knowingly or recklessly, to give the Authority information that is materially false or misleading (Section 52 IA08). General insurance intermediaries’ declaration (To be submitted on the Regulated Entity’s letterhead, signed on behalf of the Board of Directors of the Regulated Entity and submitted to the Authority) Declaration of the Directors of [state name of intermediary] to the Authority I, the undersigned, and having obtained approval from the Board of Directors of [state name of intermediary] (herein “the Company) hereby declare that: The information provided in this application is accurate and complete to the best of our knowledge. We will notify the Authority immediately if there is a material change to the information provided. In signing the declaration, we have read and understood the declaration. We understand that the Authority may require the Company to provide further information or documents at any time. Having made full enquiry into the affairs of the Company, we have formed the opinion that the Company is no longer carrying on any activity which would require it to be registered under Section 25 of the Insurance Act 2008. All insurers for whom the Company acts have been notified of the Company’s intention to cancel its registration as a general Insurance Intermediary under the Insurance Act 2008. [ If applicable: The Company ceased to hold or control clients’ assets with effect from dd/mm/yyyy.

(Delete if not applicable, for instance where a regulated entity has never held or controlled clients’ assets) .] [ If applicable: The Company has notified all current policyholders of the intention to cease the provision of intermediation services and advised those policyholders of any alternative arrangements put in place.] There are no unresolved or undischarged complaints against the Company from policyholders for whom intermediation services have been provided (or alternative wording if such complaints do exist) . [ Where applicable: The Company’s professional indemnity insurers have agreed to extend the reporting period for the notification of claims under the expiring professional indemnity insurance arrangements for XX years.] OR

[The Company has purchased a run-off professional indemnity insurance policy for XX years.]

Note: If the Company has chosen not to extend its PII Insurance arrangements nor purchased run-off cover, provide a written explanation as to why. The Authority has the power under Regulation 7(7) of the Insurance Intermediaries (General Business) Regulations 2020 to require an Insurance Intermediary to arrange such cover). ] [ Where applicable: The Company confirms it will provide the information required by the Authority as follows: Include here any other items that have been agreed to be provided but have not been provided as at the date of this declaration … … ] (To be signed on behalf of the Board of Directors of the Company and dated accordingly) Appendix 4: Supplementary guidance for insurance managers including directors’ declaration Supplementary guidance Regulation 23 of the Insurance Regulations 2025 deals with the requirements for cancellation of registration. The registered Insurance Manager must provide at least 28 days’ notice of its intention to seek a cancellation of its registration under Section 26A of the IA08. There will be a delay in processing the cancellation of the registration if information is inaccurate or incomplete. You must notify the Authority immediately if there is a change to the information provided and/or inaccurate information has been provided. It is an offence, knowingly or recklessly, to give the Authority information that is materially false or misleading (Section 52 IA08). Insurance managers’ declaration (To be submitted on the Regulated Entity’s letterhead, signed on behalf of the Board of Directors of the Regulated Entity and submitted to the Authority) Declaration of the Directors of [state name of Insurance Manager] to the Authority I, the undersigned, and having obtained approval from the Board of Directors of [state name of insurance manager] (herein “the Company) responsible for the good conduct of the Company hereby declare that: The information provided in this application is accurate and complete to the best of our knowledge. We will notify the Authority immediately if there is a material change to the information provided. In signing the declaration, we have read and understood the declaration. We understand that the Authority may require the Company to provide further information or documents at any time. Having made full enquiry into the affairs of the Company, we have formed the opinion that the Company is no longer carrying on any activity which would require it to be registered under Section 25 of the Insurance Act 2008. All insurers for whom the Company provided insurance management services have been notified of the Company’s intention to cancel its registration as an insurance manager under the Insurance Act 2008. There are no unresolved or undischarged complaints against the Company from insurers for whom insurance management services were provided. [ If applicable: The Company has put in place run-off professional indemnity insurance. Note: Omit if such a precaution has not been taken but include in a covering note the reasons why the Company has chosen not to put run-off Professional Indemnity Insurance in place). ] [ Where applicable: The Company confirms it will provide the information required by the Authority as follows: Include here any other items that have been agreed to be provided but have not been provided as at the date of this declaration … … ] (To be signed on behalf of the Board of Directors of the Company and dated accordingly) Appendix 5: Supplementary guidance for Authorised Insurers/Permitted Insurers [10] including directors’ declaration and list of insurance contracts Supplementary guidance The Authority will expect an Authorised Insurer to plan for its surrender of authorisation, whether it be on a stressed (where access to capital, funding, reinsurance or liquidity is difficult) or non-stressed (where the insurer has made a strategic decision to cease insurance business) basis. Regulation 21 of the Insurance Regulations 2025 deals with the requirements for the surrender of authorisation. An Authorised Insurer must provide at least 28 days’ notice of its intention to seek a surrender of its insurance authorisation under Section 10A IA08. (Regulation 22 imposes the same requirements on permitted insurers). Regulation 21(2)(b) requires that the notice of the intention to surrender authorisation must include details of the arrangements the insurer considers necessary to confirm that all of its insurance business is discontinued and wound up. These arrangements are referred to as the insurer’s ‘winding-up’ plan. (Regulation 22(2)(b) imposes the same requirement on permitted insurers).

Regulation 21(3) requires the winding-up plan to include details as to how the Authorised Insurer has verified that it is not required to be authorised in respect of any class of insurance business corresponding to the authorisation to be surrendered (including verifying that all of its insurance obligations under the contracts of insurance it has written under such class(es) have either been fully and permanently terminated by either paying claims in full or by commuting the liability back to the policyholder, or have been fully and permanently transferred to another insurer). It should be noted that there will be a delay in processing the surrender of insurance authorisation if information is inaccurate or incomplete. The Authority must be notified immediately if there is a change to the information provided and/or inaccurate information has been provided. In relation to Class 13 insurers, it should be noted that Regulation 9 of Schedule 2 to the Insurance Regulations 2025 states that in relation to a Class 13 insurer, unless the insurer is in a position to surrender all of its classes of authorisation, it cannot surrender its class 13 authorisation without the Authority’s written approval to do so. It is an offence, knowingly or recklessly, to give the Authority information that is materially false or misleading (Section 52 IA08). Winding up an insurance company if the directors are unable to sign the declaration An Authorised Insurer will not be able to surrender its insurance authorisation if the directors are unable to certify that the insurer has no existing or future potential exposure to costs or liabilities in connection with it carrying on of an insurance business. It should be noted that under paragraph 6 of Schedule 3 to the IA08, no insurance company may be wound up voluntarily. This is to ensure that the insurer surrenders its insurance permissions before being wound up and supports the Authority’s objective of protecting policyholders. In circumstances where the directors are unable to provide the appropriate declaration that all of the Authorised Insurer’s insurance liabilities have been fully and permanently terminated, the insurer will be expected to take appropriate legal advice to determine alternative options, such as applying to the court for a voluntary winding up via the special resolution route. The Authority expects an Authorised Insurer, as part of its winding-up plan, to ensure that it retains sufficient funds to meet the costs of any court process or liquidation costs. Winding up an insurance company with financial issues Section 12C of the IA08 outlines the consequences of an Authorised insurer breaching its MCR. It should be noted that if the insurer is not able to submit an acceptable remediation scheme under Section 12C(1)(a) of the IA08, the Authority has the power to present a petition for the winding up of the insurer under paragraph 4 of Schedule 3 to the IA08. (Section 12C(2) of the IA08 states that where the eligible capital resources of an Authorised Insurer fall below the MCR the insurer is deemed to be unable to pay its debts for the purposes of Section 162 or Section 307 of the Companies Act 1931 (as the context requires)). It should be noted that the Authority will not exercise its right to petition for the winding up of the Authorised Insurer unless the Authority determines it expedient in the public interest to do so. Winding-up plan This section provides additional information for Authorised Insurers/Permitted Insurers on the level of detail to be provided in the winding-up plan as required under Section 1(d) of Appendix 1 , and the additional financial reporting requirements under Section 2(a) of Appendix 1. The plan must demonstrate how the insurer has verified that all of its insurance obligations under the contracts of insurance it has written have been/or will soon be either fully and permanently terminated or are fully and permanently transferred to another insurer. At a minimum, the plan must contain: a list of all the insurance contracts [11] issued by the insurer since its authorisation and an explanation as to how the insurer’s existing and future potential exposure under each has been or will be, fully and permanently terminated. ( For non long-term insurance business, the means by which insurance exposures can be terminated often depends on the type of contract wording used, for example where insurance is provided on a ‘claims made’ basis it may be possible to identify the point in time at which it is no longer possible for further claims to be made (this would also require there to be no outstanding claims). Where insurance is provided on an ‘occurrence’ basis, it may be possible to obtain written agreement from each insured that all of its claims have been settled and that the insured(s) will make no further claims against the insurer and/or obtain a release of liability from the insured(s). Exposures under either of the above-mentioned claims bases may be terminated by way of their: novation to another insurer; or commutation back to a ceding insurer, provided that the Authorised Insurer transferring its exposures has obtained agreement to do so from all of the parties insured under the contract(s) being novated or commuted (as the case may be ). a numerical projection [12] of the insurance business liabilities under each contract, in line with the proposed winding-up plan for that contract; and (if applicable) a summary of the assessment carried out for each contract to determine that the proposed winding-up plan is in line with the insurer’s ‘Treating Customers Fairly’ policy and results in fair outcomes for all policyholders. Once the termination of all liabilities has been completed [13] under the winding-up plan, the Authorised Insurer can proceed with providing the final information required under the guidance note, including the submission of audited accounts under Section 2(c) of Appendix 1 and the Authorised Insurers’ Declaration as noted below. Requirements when an insurer’s run-off period extends into future financial years Where an Authorised Insurer still has contracts with outstanding liabilities that require running-off/terminating, in addition to the information required under Section 2 (Financial and Reporting Matters) of Appendix 1, the insurer must also provide for each future financial year-end until such time that the insurer believes it will have terminated all liabilities, a projection [14] of the insurer’s: MCR coverage and SCR coverage in accordance with paragraph (2); profit and loss account in accordance with paragraphs (3 and 4 as applicable); and balance sheet in accordance with paragraph (3 and 4 as applicable). The financial information required under paragraph (1)(a) should be provided in the format of the ‘SCR Summary’ tab and ‘MCR Summary’ tab of the long-term business or non-long-term business annual return, as applicable. For class 1, 2 and 10 business (or Class 12 in relation to class 1, 2 and 10 business) [15] , the information required under paragraphs 1(b) and (c) should be provided in the format of the ‘Regulatory Balance Sheet’ tab and the ‘Revenue Account Projected’ tab or equivalent of the long-term business annual return. For classes 3-9, 11 and 12 business (in relation to class 3-9 and 11 business), the financial information required under paragraphs 1(b) and (c) should be provided in the format of the additional accounting information section of the ‘Additional Information’ or equivalent tab of the non-long-term business annual return. Class 13 insurers should contact the Authority for the information to be included in the winding-up plan which will be agreed on a case-by-case basis. As part of its winding-up plan an Authorised Insurer must also submit an updated ORSA report in which the base position reflects the winding-up plan of the insurer. All projections provided must include commentary on the material assumptions, methodologies and expert judgements underlying the projections. The winding-up plan should also include any anticipated changes to terms of contractual agreements such as loans, reinsurance arrangements, outsourcing agreements and changes to the structure of an Authorised Insurer’s capital that are expected to occur. The winding-up plan should include details of any communication plan that is deemed necessary to ensure that any stakeholders impacted by a winding up are provided with adequate information and the means by which stakeholders can communicate with the Authorised Insurer. Stakeholders include, and are not limited to, policyholders, regulators, ratings agencies, reinsurers, customers, creditors, shareholders, staff, outsourced service providers and other market participants. Communications may be in the form of complaints. An Authorised Insurer must update the Authority in writing on progress against the insurer’s submitted winding-up plan on a regular basis (to be agreed with the Authority). An Authorised Insurer must notify the Authority promptly of any matter which has happened or is likely to happen and which represents a significant departure from the submitted winding-up plan, and either: explain the nature of the departure and the reasons for it and provide revised projections under paragraph 1(a), (b) and (c) for the remaining term of the winding up plan; or include an amended winding-up plan and explain the amendments and the reasons for them. If the deviation is material enough to trigger a new ORSA under the insurer’s ORSA policy, then this should also be submitted to the Authority. It is an offence, knowingly or recklessly, to give the Authority information that is materially false or misleading (Section 52 IA08). Authorised insurers’ declaration (To be submitted on the Regulated Entity’s letterhead, signed on behalf of the Board of Directors of the Regulated Entity and submitted to the Authority) Declaration of the Directors of [state name of insurer] to the Authority I, the undersigned, on behalf of the Board of Directors of [state name of insurer] (herein the “Company”), hereby declare that we have made full enquiry into the affairs of the Company and that, having so done, we have formed the opinion that the Company is no longer carrying on an insurance business (as defined under Section 54 of the Insurance Act 2008), and that the Company has no existing or future potential exposure to costs or liabilities in connection with its carrying on of an insurance business. We confirm that the information provided in this declaration is accurate and complete to the best of our knowledge. We will notify the Authority immediately if there is a material change to the information provided. In signing the declaration, we have read and understood the declaration. We understand that the Authority may require the Company to provide further information or documents at any time. We are aware that while advice may be sought from a third party (e.g. legal advice), responsibility for the accuracy of information, as well as the disclosure of relevant information on the form, is ultimately the responsibility of those who sign the declaration. (To be signed on behalf of the Board of Directors of the Company and dated accordingly. The person signing the declaration on behalf of the board of directors should hold one of the following control function roles in relation to the insurer i.e. director, head of compliance or be the R22A Head office personnel with responsibility for the IOM branch). Note: This declaration refers to the full and final termination of exposures and not just the absence of reported claims or provision for unreported claims. An insurer will continue to be considered as carrying on insurance activities if it can be called upon, at some point in time in the future, to perform an obligation under the insurance contract – i.e. pay a claim. An insurer must demonstrate how all of its insurance obligations have been fully and permanently terminated to ensure that future claims cannot arise, however remote the circumstance may be. Partial Surrenders When an Authorised Insurer is looking to surrender one or more of its class(es) of authorisation, but wishes to continue carrying on insurance business within the remaining classes of authorisation, the Authority will expect that insurer to demonstrate to the Authority how the directors have verified that its insurance obligations under the contracts of insurance it has written under those class(es) of insurance that have been/or will soon be either fully and permanently terminated or, have been transferred to another insurer. The Authorised Insurer should note that whilst it may have ceased effecting new contracts of insurance under a particular class(es) of authorisation, the insurer will need to retain that class(es) of authorisation until all of its insurance obligations under the contracts of insurance written under that class(es) of insurance have been fully and permanently terminated. The Authorised Insurer should contact the Authority to agree modifications to the winding-up plan that are considered appropriate by the Authority to result in a partial surrender of authorisation. Appendix 6: Financial Services Act 2008 – Regulated Entity declaration When a Regulated Entity is looking to surrender one or more of its licence classes (or sub classes), but wishes to continue carrying on regulated activity within its remaining licence classes (or sub classes), the Authority will expect that Regulated Entity to demonstrate to the Authority how the directors have verified that the Regulated Entity has fully and permanently ceased the activity in relation to the licence classes (or sub classes) that it is seeking to surrender, or, that the regulated business has been properly transferred to another Regulated Entity. It is an offence, knowingly or recklessly, to give the Authority information that is materially false or misleading (Section 40 FSA08). (To be submitted on the Regulated Entity’s letterhead, signed on behalf of the Board of Directors of the Regulated Entity and submitted to the Authority) Declaration of the Directors of [state name of Firm] to the Authority I, the undersigned, on behalf of the Board of Directors of [state name of firm] (herein the “Company”), hereby declare that: Having made full enquiry into the affairs of the Company, we have formed the opinion that the Company is no longer carrying on any activity which would require it to be licensed under the Financial Services Act 2008. If applicable: The Company has notified all current customers or clients of the intention to cease regulated activities and advised those customers or clients of any alternative arrangements put in place. If applicable: The Company ceased to hold or control clients’ assets with effect from dd/mm/yyyy . There are no unresolved or undischarged complaints against the company (or alternative wording if such complaints do exist) . [ Where applicable: [The Company’s Professional Indemnity Insurers have agreed to extend the reporting period for the notification of claims under the expiring Professional Indemnity Insurance arrangements for XX years.] OR

[The Company has purchased a run-off Professional Indemnity Insurance (“PII”) policy for XX years and will/has provide/d the PII Run-off Confirmation Form within 20 days of it being effected.] [The Company confirms it will provide the information required by the Authority as follows: Include here any other items that have been agreed to be provided but have not been provided as at the date of this declaration … …] (To be signed on behalf of the Board of Directors of the Company and dated accordingly. The person signing the declaration on behalf of the board of directors should hold one of the following control function roles in relation to the firm i.e. director, head of compliance or be the R28 IOM Resident Officer in respect of a branch). Winding up in the context of this guidance means the process through which a Regulated Entity ceases to undertake regulated business under either the FSA08 or IA08, enabling it to surrender its regulatory permissions (as opposed to the process of entering into a liquidation resulting in eventual dissolution). ↑ A partial cessation means the surrender of a permission or class of insurance, whilst continuing to undertake regulated activity under remaining permissions/classes of insurance held. ↑ For example, a winding up plan (see additional guidance for insurance companies - Appendix 5), structure charts, financial projections. ↑ This guidance is not exhaustive. It does not cite all the applicable provisions of an Act, Regulation, Code or Rule Book. The matters to consider during the surrender process vary according to the nature, complexity and scale of the Regulated Entity. ↑ The Financial Services Rule Book specifies a minimum notice period of 30 business days (partly to prevent abandonment of a business). In practice, an orderly surrender typically follows a dialogue over several months, with the actual surrender date being agreed near the end of the process, when dates are reasonably firm. Insurance Regulated Entities have equivalent notice periods, see Appendices 3, 4 and 5 for details. ↑ The Authority may agree to adjust the Annual Audited Expenditure in the financial resources calculation for FSA08 Regulated Entities. ↑ See supplementary guidance in respect of Authorised Insurers in relation to additional financial reporting requirements under Appendix 5. ↑ The Authority expects PII cover to be maintained after surrender, taking account of the sort of period over which any potential claims might reasonably be expected to come to light. After considering the Regulated Entity’s winding-up plan and rationale for not extending its PII arrangement, the Authority may require a relevant Regulated Entity to hold run-off PII cover for a specified period in respect of claims arising from past acts or omissions. ↑ Where the Regulated Entity provides services to collective investment schemes under the FSA08 (Class 3 permissions), the Authority will want to establish what alternative arrangements each collective investment scheme has made. ↑ A permit holder whose home jurisdiction has an approved supervisor, may be exempted from parts of the surrender process. Each application to be considered on its own merits. ↑ In relation to long term insurers, this can be a list by homogenous product group rather than individual contract. All product variants ever sold should be included. ↑ A Class 12 insurer, or a Class 3-9 general (Non-Life) insurer (who is not deemed by the Authority to be a commercial insurer) may apply to the Authority for an exemption from the requirement to produce this information if that insurer has already reached the stage where all/majority of its insurance liabilities have been fully and permanently terminated at the time of making the application to surrender. ↑ Termination of all liabilities include the extinguishment of all current, past or future potential exposures to costs or liabilities in connection with the carrying on of an insurance business. ↑ Same as 15. ↑ Including class 9 or 11 business, where a long-term business insurer has also been authorised to carry out this class of business. ↑