(1) A "write-down order" is an order of the court directing that the value of one or more of an insurer's liabilities is reduced on such terms as may be specified in the order.

(2) The court may make a write-down order in relation to an insurer if it is satisfied that -

(a) the insurer is, or is likely to become, unable to pay its debts (within the meaning given to that expression by section 123 of the 1986 Act or Article 103 of the 1989 Order), and

(b) making the order is reasonably likely to lead to a better outcome for the insurer's policyholders and other creditors (taken as a whole) than not making the order.

(3) A write-down order -

(a) takes effect on the later of -

(i) the date specified in the order, and

(ii) the date on which the appointment of a person to act as the manager of the order first takes effect (see section 377G(7));