Section 269ZI | “Qualifying latent claims”

(1)This section applies for the purposes of section 269ZG.

(2)Where a general insurance company has a liability in respect of a claim, the claim is a “qualifying latent claim” if conditions A to C are met.

(3)In this section “claim” means a claim (whether actual or potential) under an insurance policy.

(4)Condition A is that—

(a)the claim is of a type that was not reasonably foreseeable at the time when the insurance policy concerned was entered into, and

(b)it is likely that, had the company foreseen that type of claim, the price or other terms of the policy would have been significantly different.

(5)Condition B is that the latency period associated with that type of claim (see subsection (7)) is more than 10 years.

(6)Condition C is that the insurance policy, or the part of the insurance policy under which the claim is or would be made, is—

(a)an employer's liability policy, or

(b)a public or products liability policy.

(7)The “latency period” associated with a type of claim is the mean period for claims of the type between—

(a)the insured event giving rise to the claim, and

(b)notification of the claim.

(8)The mean period mentioned in subsection (7) is to be determined as at the end of the accounting period mentioned in section 269ZG(2).

(9)In this section—

“employer's liability policy” means an insurance policy against the risks of the person insured incurring liabilities to the insured's employees for injury, illness or death arising out of their employment during the course of business;

“general insurance company” is to be interpreted in accordance with section 269ZG;

“insurance policy” includes any contract of insurance;

“liability” includes a contingent or prospective liability;

“public or products liability policy” means an insurance policy against the risks of the person insured incurring liabilities to third parties for damage to property, injury, illness or death, arising in the course of the insured's business.