Requirements for other funded credit protection
Cash on deposit with, or cash assimilated instruments held by, a third party institution shall be eligible for the treatment set out in Article 232(1), where all the following conditions are met:
the borrower's claim against the third party institution is openly pledged or assigned to the lending institution and such pledge or assignment is legally effective and enforceable in all relevant jurisdictions and is unconditional and irrevocable;
the third party institution is notified of the pledge or assignment;
as a result of the notification, the third party institution is able to make payments solely to the lending institution or to other parties only with the lending institution's prior consent.
Life insurance policies pledged to the lending institution shall qualify as eligible collateral where all the following conditions are met:
the life insurance policy is openly pledged or assigned to the lending institution;
the company providing the life insurance is notified of the pledge or assignment and, as a result of the notification, may not pay amounts payable under the contract without the prior consent of the lending institution;
the lending institution has the right to cancel the policy and receive the surrender value in the event of the default of the borrower;
the lending institution is informed of any non-payments under the policy by the policy-holder;
the credit protection is provided for the maturity of the loan. Where this is not possible because the insurance relationship ends before the loan relationship expires, the institution shall ensure that the amount deriving from the insurance contract serves the institution as security until the end of the duration of the credit agreement;
the pledge or assignment is legally effective and enforceable in all jurisdictions which are relevant at the time of the conclusion of the credit agreement;
the surrender value is declared by the company providing the life insurance and is non-reducible;
the surrender value is to be paid by the company providing the life insurance in a timely manner upon request;
the surrender value shall not be requested without the prior consent of the institution;
the company providing the life insurance is subject to Directive 2009/138/EC or is subject to supervision by a competent authority of a third country which applies supervisory and regulatory arrangements at least equivalent to those applied in the Union.