5. Independence from substantial shareholder

In this Part, subject to regulation 14 or 22 (as the case may be), a director of a DFHC (Licensed Insurer) is independent from a substantial shareholder of the DFHC (Licensed Insurer) if the director is not that substantial shareholder and is not connected to that substantial shareholder.

Despite paragraph (1), a director of a DFHC (Licensed Insurer) (A) that is the sole subsidiary of another DFHC (B) that does not carry on any business other than the holding of A is to be treated as independent from the substantial shareholder of A for the purposes of regulations 6(1), 9, 11(1), 16(1) and 17(1), if the director —

is not a substantial shareholder of A or B; and

is not connected to —

a substantial shareholder of A (other than B); or

a substantial shareholder of B.

For the purposes of paragraph (1), a person is connected to a substantial shareholder if the person is —

in the case where the substantial shareholder is an individual —

a member of the immediate family of the substantial shareholder;

employed by the substantial shareholder;

employed by an associate of the substantial shareholder;

an executive director of an associate of the substantial shareholder;

a non‑executive director of an associate of the substantial shareholder;

a partner of a firm or a limited liability partnership of which the substantial shareholder is also a partner; or

accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder; or

in the case where the substantial shareholder is a corporation —

employed by the substantial shareholder;

employed by an associate of the substantial shareholder;

a director of the substantial shareholder;

an executive director of an associate of the substantial shareholder;

a non‑executive director of an associate of the substantial shareholder;

a partner of a firm or a limited liability partnership of which the substantial shareholder is also a partner; or

accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder.

In this Part, subject to regulation 14 or 22 (as the case may be), a director of a DFHC (Licensed Insurer) is independent from a substantial shareholder of the DFHC (Licensed Insurer) if the director is not that substantial shareholder and is not connected to that substantial shareholder.

Despite paragraph (1), a director of a DFHC (Licensed Insurer) (A) that is the sole subsidiary of another DFHC (B) that does not carry on any business other than the holding of A is to be treated as independent from the substantial shareholder of A for the purposes of regulations 6(1), 9, 11(1), 16(1) and 17(1), if the director —

is not a substantial shareholder of A or B; and

is not connected to —

a substantial shareholder of A (other than B); or

a substantial shareholder of B.

For the purposes of paragraph (1), a person is connected to a substantial shareholder if the person is —

in the case where the substantial shareholder is an individual —

a member of the immediate family of the substantial shareholder;

employed by the substantial shareholder;

employed by an associate of the substantial shareholder;

an executive director of an associate of the substantial shareholder;

a non‑executive director of an associate of the substantial shareholder;

a partner of a firm or a limited liability partnership of which the substantial shareholder is also a partner; or

accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder; or

in the case where the substantial shareholder is a corporation —

employed by the substantial shareholder;

employed by an associate of the substantial shareholder;

a director of the substantial shareholder;

an executive director of an associate of the substantial shareholder;

a non‑executive director of an associate of the substantial shareholder;

a partner of a firm or a limited liability partnership of which the substantial shareholder is also a partner; or

accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder.