Equalisation reserves: the tax rules: insurers not regulated in the UK: non-statutory reserves
Equalisation reserves may be maintained where there is no UK regulatory requirement to do so. The supervision of insurers from other Member States of the European Economic Area (EEA) is the sole responsibility of the Home State, unless the company is a pure reinsurer. The UK regulator does not require the setting up of an equalisation reserve for any part of the business in these cases.
Even if the Home State imposes a requirement on the insurer to appropriate amounts to an equalisation reserve, the rules will inevitably be different from those in the UK. And even though credit insurance equalisation reserves (but no others) are a mandatory requirement under Article 15a of the 1st Non-Life Directive, Member States are allowed to use one of four different methods.