LLM3100 | Reinsurance to close (RITC) and technical provisions: section 107 FA2000: adaptations for Lloyd's members (page 3 of 3): regulation 7(6) to (11) of the GI reserves tax Regulations

Regulation 7(6)

Regulation 7(6) was repealed by SI2003/2862.

It previously amended the rules for general tax rules dealing foreign currency elections in Finance Act 1993 by limiting the elections a Lloyd’s member could make to one of the prescribed Lloyd’s currencies. Foreign currency elections were removed in the 2003 amendments to the Finance Act 1993 and regulation 7(6) was repealed.

Elections made for periods of account ending before 5 December 2003 (the date that the amendment took effect) are still valid.

Regulation 7(7) and 7(8)

Regulation 7(7) omits the reference to the ‘reinsurer syndicate’ in regulation 7(5)(b) so that the ’one-year later’ rule in regulation 7(5) applied to run-off syndicates.

Regulation 7(8) applied the 4% rule to run-off syndicates.

Regulation 7(9) and 7(10)

Regulation 7(9) and 7(10) applied special rules for connected companies.

If company A has 10% of a syndicate’s capacity and connected company B has none, and the percentages are reversed in the following year, both were treated as having a 10% share of the syndicate in both years. The RITC paid and received by both is wholly subject to the FA00/S107 rules.

For the purposes of the transfer of business rules in regulation 4 of SI2001/1757, company B was treated as having taken over the liabilities.

Regulation 7(11)

Regulation 7(11) requires a managing agent to pass on the details a member needs to carry out the calculations required by the rules. This will include details of the amount of claims and RITC paid by a syndicate for each underwriting year.