17ARe‑insurance business

17A Re‑insurance business

(1) Where: (a) a company has entered into, or proposes to enter into, a contract of insurance insuring an approved lender against the whole or part of any insurable loss in respect of an insurable loan made, or proposed to be made, by the lender; and (b) the company is a subsidiary of the approved lender; the Corporation may enter into a contract re‑insuring the whole or part of any loss of the company under the contract of insurance. (2) Subject to this Act, the terms and conditions to be included in contracts of re‑insurance to be entered into by the Corporation shall be such as are determined by the Corporation. (3) Notwithstanding that a company ceases to be a subsidiary of an approved lender, the company shall, for the purposes of subsection (1), continue to be a subsidiary of the approved lender in relation to any contract of insurance that is the subject of a contract of re‑insurance entered into by the Corporation before the company ceased to be a subsidiary of the approved lender. (4) The question whether a company is a subsidiary of an approved lender shall be determined in the same manner as the question whether a corporation is a subsidiary of another corporation is determined for the purposes of the Companies Act 1981. (5) In subsection (1):

insurable loss, in relation to an insurable loan, includes:

(a) loss of moneys constituting the loan;
(b) loss of interest and other charges on or in relation to the loan; and
(c) any other loss arising from any default in relation to the loan.