Permitted property: cash: insurers’ internal currency accounts
Insurers may use internal currency accounts for dealing transactions. These accountscontain the pooled funds of a number of different policyholders and pay interest accordingto each policyholders share of the balance. The cash in the accounts is derived fromsale proceeds and income and is used to pay fees and expenses. It follows that at timesthe balance attributable to a particular policyholder may be negative.
The insurer may not give a choice to a policyholder whether cash balances arising in thepolicy are dealt with through such an account. In that case the account would not beproperty that may be selected by the policyholder under the terms of the policy and thepolicy would not be a PPB.
Even if the policyholder has the ability to select the type of cash account used for thesepurposes, it will not cause the policy to be a PPB unless the cash account is selected forspeculative purposes. Provided the accounts purpose is specified in the policy termsand it excludes acquisition of cash for the purpose of realising a gain, it will not beviewed as selected for speculative purposes.
|Further reference and feedback||IPTM1013|