GIM7060 - Equalisation reserves: classes other than credit business: calculation

The methods of calculating the equalisation reserve are set out in INSPRU 1.4.20 onwards.

The figures that are used in the equalisation reserve calculations are net of reinsurance, so that, for example ‘net claims incurred’ means claims arising from events occurring during the year (including direct claims handling expenses) net of reinsurance recoveries and other recoveries such as salvage.

In the case of a non-UK resident company within the equalisation reserves regulatory rules operating through a UK branch the calculations are made by reference to UK business only.