(1) For the purposes of this Part, the insolvent estate of a UK insurer shall not include any assets which at the commencement date are subject to a relevant compromise or arrangement.

(2) In this regulation -

(a) "assets" has the same meaning as "property" in section 436 of the 1986 Act or Article 2(2) of the 1989 Order;

(b) "commencement date" has the meaning given in regulation 18(4);

(c) "insolvent estate" in England and Wales and Northern Ireland has the meaning given by rule 1.2 of the Insolvency Rules or Rule 0.2 of the Insolvency Rules (Northern Ireland) and in Scotland means the company's assets;

(d) "relevant compromise or arrangement" means -

(i) a compromise or arrangement sanctioned by the court in relation to a UK insurer before 20th April 2003 under -

(aa) section 425 of the Companies Act 1985 (excluding a compromise or arrangement falling within section 427 or 427A of that Act), or