(1) This regulation applies in the case of a winding up of -

(a) a long term insurer;

(b) a general insurer;

(c) a composite insurer, where the long term business of that insurer has been or is to be transferred as a going concern to a person who may lawfully carry out the contracts in that long term business in accordance with section 376(2) of the 2000 Act.

(2) Subject to paragraph (3), the debts of the insurer must be paid in the following order of priority -

(a) preferential debts;

(b) insurance debts;

(c) all other debts.

(3) Preferential debts rank equally among themselves after the expenses of the winding up and must be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions.