(1) Subsection (4) applies where it appears to the PRA that -
(a) relevant public expenditure has been incurred in respect of a PRA-authorised person, and
(b) that expenditure might not have been incurred but for a serious failure in -
(i) the system established by FSMA 2000 for the regulation of PRA-authorised persons and their activities, so far as it relates to the functions of the PRA, or
(ii) the operation of that system, so far as it relates to those functions.
(2) Subsection (4) also applies where it appears to the PRA that -
(a) events have occurred which -
(i) had or could have had a significant adverse effect on the safety or soundness of one or more PRA-authorised persons, or
(ii) if the effecting and carrying out of contracts of insurance is a PRA-regulated activity for the purposes of FSMA 2000, related to a PRA-authorised person carrying on that activity and indicated a significant failure to secure an appropriate degree of protection for policyholders, and
(b) those even
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