Private Stability Support

Terms and Conditions
and
Risk Disclosures

Babel Cover Limited

PART I - PRIVATE STABILITY SUPPORT TERMS AND CONDITIONS

1. Purpose and Status

1.1 These Private Stability Support Terms and Conditions (the Terms) govern participation in the Stability Support framework administered by Babel Cover Limited (the Operator).

1.2 The purpose of Stability Support is to provide contingent capital support to the Operator in circumstances where, for a given accounting period: aggregate discretionary claims paid exceed aggregate net membership contributions within the BMIC Collective.

1.3 Stability Support participation operates as a private, invitation-only arrangement and is not publicly marketed.

1.4 Nothing in these Terms:

  • creates an investment arrangement;
  • creates a profit-sharing relationship;
  • establishes a partnership, joint venture, trust, or collective management structure.

1.5 Participation amounts are confirmed separately through allocation confirmations or statements issued by the Operator.

2. Stability Support Participation

2.1 Approved participants may provide capital support to the Operator in an agreed amount (the Committed Support Amount).

2.2 Confirmation of the Committed Support Amount will be provided separately following allocation or funding.

2.3 Upon receipt, the Committed Support Amount becomes the property of the Operator.

2.4 Stability Support participation is non-transferable and non-assignable without the written consent of the Operator.

3. Term

3.1 Stability Support participation operates on a 12-month term from the effective allocation date.

3.2 Participation may be renewed for further terms by mutual agreement.

3.3 Participants do not have a unilateral right to withdraw committed support during the active term.

4. Application of Stability Support

4.1 The Operator may apply Stability Support capital where, for a 12-month accounting period: Aggregate Discretionary Claims Paid exceed Aggregate Net Membership Contributions Received within the BMIC Collective.

4.2 Any application of Stability Support capital shall not exceed the verified aggregate shortfall.

4.3 Determination of claims, contributions, and any resulting shortfall shall be made solely by the Operator and shall be final.

5. Enhancement

5.1 The Operator may, at its sole and absolute discretion, declare an enhancement allocation in respect of a given accounting period.

5.2 In determining whether to declare enhancement, the Operator may consider:

  • claims experience;
  • capital resilience;
  • prudential considerations;
  • operational stability of the Collective.

5.3 Enhancement declared in any annual period shall not exceed 15% of the participant’s Committed Support Amount.

5.4 No formula, ratio, or performance metric creates an entitlement to enhancement.

5.5 Enhancement does not accrue and past declarations create no expectation of future declaration.

5.6 Unless withdrawn in accordance with Section 6, any declared enhancement will increase the participant’s Stability Support Position and remain subject to application under Section 4.

6. Withdrawal of Enhancement

6.1 Withdrawal of retained enhancement may occur only:

  • at the time of renewal; or
  • by mutual written agreement with the Operator.

6.2 Any withdrawal is subject to the Operator determining that the withdrawal would not materially impair the operational resilience of the Stability Support framework.

7. No Management or Governance Rights

Participants:

  • have no voting rights;
  • have no advisory or governance role;
  • have no entitlement to participate in management decisions;
  • have no ownership interest in any assets of the Operator or the BMIC Collective.

8. No Partnership or Fiduciary Relationship

Participation in Stability Support does not create:

  • a partnership;
  • a joint venture;
  • a trust;
  • a fiduciary relationship; or
  • a collective investment arrangement.

9. Confidentiality

Participants must keep confidential:

  • the existence of Stability Support participation;
  • the terms of these arrangements; and
  • all non-public information received in connection with participation.

10. Regulatory Position

Participants acknowledge that Stability Support participation:

  • is private and invitation-only;
  • is not a regulated investment;
  • is not insurance;
  • does not constitute a collective investment scheme.

11. Governing Law

These Terms are governed by the laws of England and Wales.

PART II - RISK DISCLOSURES

IMPORTANT NOTICE

This section describes the principal risks associated with participation in the Stability Support framework administered by Babel Cover Limited.

This arrangement is private and unregulated.

It is not an investment product.

Participants should carefully consider whether they are able to bear the full economic risk of participation.

12. Nature of the Agreement

Participation in Stability Support is a private capital support arrangement.

It is:

  • not a public offering;
  • not transferable or tradeable;
  • not a security;
  • not insurance or reinsurance;
  • not a collective investment scheme; and
  • not covered by the Financial Services Compensation Scheme.

Participants are not acquiring units, shares, or interests in a fund.

13. Capital at Risk

The entire Committed Support Amount may be applied where aggregate discretionary claims exceed aggregate membership contributions.

Participants may lose some or all of their committed capital.

There is:

  • no capital guarantee;
  • no minimum repayment obligation;
  • no fixed repayment date;
  • no liquidity; and
  • no secondary market.

Retained enhancement allocations (if any) remain subject to the same application risk as the original Committed Support Amount.

14. Discretionary Claims Environment

The BMIC Collective operates on a discretionary basis.

Claims are considered and paid subject to available funds and operational judgement.

Aggregate claims may materially exceed contributions in any year.

Stability Support exists solely to provide resilience in such circumstances.

15. Enhancement Allocations

Enhancement allocations:

  • are entirely discretionary;
  • are not interest;
  • are not yield;
  • are not profit participation;
  • may be zero in any year.

Enhancement declared in any annual period will not exceed 15% of the Committed Support Amount.

Past enhancement declarations create no expectation of future declaration.

Unless withdrawn, enhancement remains exposed to the same capital application risk.

16. No Management or Control

Participants have:

  • no voting rights;
  • no control over claims decisions;
  • no participation in management;
  • no entitlement to operational decision-making.

All operational and capital application decisions are made solely by the Operator.

17. No Reliance

By participating, individuals confirm that they:

  • are entering into the arrangement by private invitation;
  • are not relying on public marketing or promotion;
  • are not relying on projections or performance expectations; and
  • are able to bear the potential loss of their committed capital.

18. Participant Acknowledgement

By participating in Stability Support, participants acknowledge that:

  • they understand the discretionary and contingent nature of the framework;
  • they understand that capital is genuinely at risk; and
  • they have reviewed and accepted these Terms and Risk Disclosures.