These Dedicated Internal Fund Rules (the “Rules”) govern the operation and management of a Dedicated Internal Fund (the “Fund”) established within a Capital Redemption Policy issued by a Luxembourg-authorised insurance undertaking (the “Insurer”).
The Fund is created for the exclusive benefit of a single policyholder or a defined group of policyholders, in accordance with Luxembourg insurance law and applicable regulatory requirements.
The Fund operates within the Luxembourg insurance regulatory framework and is subject to:
The Fund does not constitute a separate legal entity and forms an integral part of the Insurer’s balance sheet, subject to asset segregation and policyholder protection mechanisms.
Assets allocated to the Fund are held in custody by an independent custodian bank appointed by the Insurer.
Such assets are recorded in segregated accounts and are legally distinct from:
This segregation forms part of the Luxembourg policyholder protection framework.
The investment strategy of the Fund shall be defined in accordance with the policyholder’s risk profile and investment objectives, as documented in the policy records.
Eligible assets may include, subject to regulatory limits:
All investments must comply with Luxembourg insurance diversification and eligibility rules.
The Insurer retains ultimate responsibility for the management of the Fund.
An external investment advisor or discretionary manager may be appointed, subject to prior approval by the Insurer and compliance with regulatory requirements.
Any such appointment does not transfer responsibility away from the Insurer.
The assets of the Fund shall be valued on a regular basis in accordance with the Insurer’s valuation policy and applicable accounting standards.
Valuations shall reflect fair market value where available, or appropriate valuation methodologies for non-listed assets.
The Fund is subject to ongoing risk monitoring by the Insurer, including controls relating to:
The Insurer may impose additional restrictions where deemed necessary to protect policyholder interests.
The policyholder has economic rights over the Fund through the Capital Redemption Policy, subject to the terms and conditions of the Policy.
The policyholder does not acquire direct ownership of the underlying assets.
These Rules may be amended by the Insurer to reflect changes in legislation, regulatory guidance or internal policies.
Material amendments shall be communicated to the policyholder.
These Rules are governed by and construed in accordance with the laws of the Grand Duchy of Luxembourg.