C3C1C2Part 23Distributions

Annotations:
Modifications etc. (not altering text)
C3

Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))

Chapter 3Supplementary provisions

Accounting matters

I1843Realised profits and losses of long-term insurance business F2of certain insurance companies

F41

The provisions of this section have effect for the purposes of this Part as it applies in relation to an authorised insurance company carrying on long-term business, other than—

a

a person to whom section 833A applies; or

b

an insurance special purpose vehicle.

2

An amount included in the relevant part of the company's balance sheet that—

a

represents a surplus in the fund or funds maintained by it in respect of its long-term business, and

b

has not been allocated to policy holders or, as the case may be, carried forward unappropriated in accordance with asset identification rules made under F5Part 9A of the Financial Services and Markets Act 2000 (c. 8),

is treated as a realised profit.

3

For the purposes of subsection (2)—

a

the relevant part of the balance sheet is that part of the balance sheet that represents accumulated profit or loss;

b

a surplus in the fund or funds maintained by the company in respect of its long-term business means an excess of the assets representing that fund or those funds over the liabilities of the company attributable to its long-term business, as shown by an actuarial investigation.

4

A deficit in the fund or funds maintained by the company in respect of its long-term business is treated as a realised loss.

For this purpose a deficit in any such fund or funds means an excess of the liabilities of the company attributable to its long-term business over the assets representing that fund or those funds, as shown by an actuarial investigation.

5

Subject to subsections (2) and (4), any profit or loss arising in the company's long-term business is to be left out of account.

6

For the purposes of this section an “actuarial investigation” means an investigation made into the financial condition of an authorised insurance company in respect of its long-term business—

a

carried out once in every period of twelve months in accordance with rules made under F6Part 9A of the Financial Services and Markets Act 2000, or

b

carried out in accordance with a requirement imposed under section 166 of that Act,

by an actuary appointed as actuary to the company.

7

In this section “long-term business” means business that consists of effecting or carrying out contracts of long-term insurance.

This definition must be read with section 22 of the Financial Services and Markets Act 2000, any relevant order under that section and Schedule 2 to that Act.

F18

In this section “ insurance special purpose vehicle ” means a special purpose vehicle within the meaning of F3Article 13(26) of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) .