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HMRC internal manual

General Insurance Manual

Equalisation reserves: classes other than credit business: ring-fencing

The equalisation reserve is not available to meet losses from any class or type of business which is outside the scope of equalisation reserves, such as motor insurance, however high claims might be in a particular year.

The equalisation reserve for credit insurance must be maintained and calculated separately from the reserve for other business. It follows that exceptional losses in credit insurance cannot be covered by the main equalisation reserve, and exceptional losses in, say, property business cannot be met from the credit insurance business reserve.