A company qualifies for this exemption if the following requirements are satisfied:
- Approved stock exchange
You must hold shares in the holding company of a class listed on any stock market of a stock exchange approved in regulation 152I, Schedule 12 of the Regulations. See Appendix 1: Approved stock exchanges for more information.
- Designated a life insurance company
The holding company is included in a class of companies designated as engaged in life insurance on either:
- an approved stock exchange, or
- an approved international sectoral classification system. See Appendix 3: Approved international sectoral classification systems for more information.
- Trading requirement
The class of shares you have in the holding company must be widely held and actively traded on a regular basis on a stock market of an approved stock exchange during the period in which the exemption applies.
- Subsidiaries principally engaged in life insurance business
If the holding company has only one wholly owned subsidiary, that subsidiary must be authorised under the law of its place of residence to carry on life insurance business, and have been principally engaged in the active carrying on of life insurance business.
If the holding company has more than one wholly owned subsidiary, the principal activities of the wholly owned subsidiaries in the group, considered together, must be the active carrying on of life insurance business. At least one of the wholly-owned subsidiaries must be authorised under the law of its place of residence to carry on life insurance business.
Whether the subsidiary or subsidiaries were principally engaged in the active carrying on of life insurance business is decided by a balance sheet test. This test requires that at least 50% of the gross value of the subsidiary company's assets were for use in carrying on life insurance business as defined in section 11 of the Life Insurance Act 1995. [section 507A and definition of 'life insurance business' in section 470]