LLM3000 - Reinsurance to close (RITC), technical provisions and equalisation reserves: introduction

Reinsurance to close and technical provisions

GIM Chapter 6 (see LLM10000) addresses the special tax issues that relate to technical provisions of general insurance companies. Similar issues arise in relation to reinsurance to close (‘RITC’) and, for open syndicates, technical provisions for Lloyd’s syndicate members. GIM6080 explains the background to the introduction of FA00/S107 and the General Insurance Reserves (Tax) Regulations 2001, SI2001/1757. This legislation applied specific and complex tax rules to the taxation of technical provisions of a general insurer, including Lloyd’s underwriting members. These rules are described at GIM6150 to GIM6340 and the corresponding rules and adaptations for Lloyd’s members are at LLM3010 to LLM3200 in this Chapter.

LLM3210 explains a special rule that applied to RITC before the introduction of FA00/S107.

GIM6510+ explains the rules for general insurance companies following the repeal of FA00/S107 by FA07/SCH11. The corresponding rules and adaptations for Lloyd’s syndicates are at LLM3300 to 3330 below.

Equalisation reserves

FA09/S47 empowers the Treasury to make regulations extending existing equalisation relief, given to general insurance companies for the equalisation reserves they are required by the Financial services Authority to establish, so that it may also benefit corporate and partnership members of Lloyd’s who choose to establish ‘equivalent Lloyd’s reserves’. The effect of these regulations, The Lloyd’s Underwriters (Equalisation Reserves) (Tax) Regulations 2009, SI2009/2039, is described at LLM3400+. Equalisation reserves recognise the volatile and fluctuating results associated with certain general insurance business classes.

1. LLM3010

   Section 107 FA2000: application to Lloyd's members: general
2. LLM3020

   Section 107 FA2000: application to Lloyd's members: the 4% rule
3. LLM3030

   Section 107 FA2000: application to Lloyd's members: periods affected
4. LLM3040

   Section 107 FA2000: adaptations for Lloyd's members: meaning of technical provisions
5. LLM3050

   Section 107 FA2000: adaptations for Lloyd's members: changes in a member’s share of a syndicate’s business
6. LLM3060

   Section 107 FA2000: adaptations for Lloyd's: changes in a member’s share of a syndicate’s business: examples
7. LLM3070

   Section 107 FA2000: adaptations for Lloyd's members: the declarations basis and the 'one-year later' rule
8. LLM3080

   Section 107 FA2000: adaptations for Lloyd's members (page 1 of 3): regulation 7(1) to (3) of the GI reserves tax Regulations
9. LLM3090

   Section 107 FA2000: adaptations for Lloyd's members (page 2 of 3): regulation 7(4) and (5) of the GI reserves tax regulations
10. LLM3100

    Section 107 FA2000: adaptations for Lloyd's members (page 3 of 3): regulation 7(6) to (11) of the GI reserves tax regulations
11. LLM3110

    Section 107 FA2000: particular difficulties
12. LLM3120

    Section 107 FA2000: further help available: the 'Lloyd's Calculator'
13. LLM3130

    Section 107 FA2000: example: member increases their share of a syndicate’s business (page 1 of 4)
14. LLM3140

    Section 107 FA2000: example: member increases their share of a syndicate’s business (page 2 of 4)
15. LLM3150

    Section 107 FA2000: example member increases their share of a syndicate’s business (page 3 of 4)
16. LLM3160

    Section 107 FA2000: example member increases their share of a syndicate’s business (page 4 of 4)
17. LLM3170

    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 1 of 4)
18. LLM3180

    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 2 of 4)
19. LLM3190

    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 3 of 4)
20. LLM3200

    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 4 of 4)
21. LLM3210

    Taxation prior to section 107 FA 2000
22. LLM3300

    Taxation following repeal of section 107 FA2000: the appropriate amount: adaptations for Lloyd’s members
23. LLM3310

    Taxation following repeal of section 107 FA 2000: the appropriate amount: adaptations of FA07/SCH11
24. LLM3320

    Taxation following repeal of section 107 FA 2000: appropriate amount Regulations SI2009/1926: application to members of Lloyd’s syndicates
25. LLM3330

    Taxation following repeal of section 107 FA 2000: the appropriate amount: application to Lloyd’s syndicates: amendment of the administrative regulations for enforcement purposes
26. LLM3400

    Equalisation reserves for corporate and partnership members: background
27. LLM3410

    Equalisation reserves for corporate and partnership members: scope of relief
28. LLM3420

    Equalisation reserves for corporate and partnership members: equivalent Lloyd’s reserve
29. LLM3430

    Equalisation reserves for corporate and partnership members: application of the section 444BA ICTA rules
30. LLM3440

    Equalisation reserves for corporate and partnership members: election not to take a tax deduction
31. LLM3450

    Equalisation reserves for corporate and partnership members: cessations
32. LLM3460

    Equalisation reserves for corporate and partnership members: anti-avoidance
33. LLM3470

    Equalisation reserves for corporate and partnership members: repeal