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HMRC internal manual

Lloyd's Manual

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Reinsurance to close (RITC) and technical provisions: section 107 FA2000: example: member reduces their share of the syndicate’s business (page 3 of 4)

For member Y, the claims paid break down as follows:

Claims paid in year following payment of the 1997 RITC

Claims paid for 1997 liabilities: total £5M (25% of £20M)

  1. The £5M all relates to Y’s 1997 liabilities.

Claims paid for 1998 liabilities: total £15M (25% of £60M)

  1. The £15M all relates to Y’s 1998 liabilities.

Summary of claims paid in year following payment of the 1997 RITC

  • Y paid £7M of claims for which Y had provided in 1997, item 1 above plus part of the RITC paid for 1997, item 4 at LLM3180.
  • Y paid £18M for claims in 1998, item 2 above plus part of the RITC paid for 1998, item 6 at LLM3180. These will not feature in the FA00/S107 calculations as they were paid before the end of the year for which the RITC was paid.

Claims paid in year following payment of the 1998 RITC

Claims paid for 1997 liabilities: total £2M (20% of £10M)

  1. The £2M all relates to Y’s 1997 liabilities.

Claims paid for 1998 liabilities: total £4M (20% of £20M)

  1. The £4M all relates to Y’s 1998 liabilities.

Claims paid for 1999 liabilities: total £16M (20% of £80M)

  1. The £16M all relates to Y’s 1999 liabilities.

Summary of claims paid in year following payment of the 1998 RITC

  • Y paid £2M of claims for which Y had provided in 1997, item 3 above.
  • Y paid £4M of claims for which Y had provided in 1998, item 4 above.
  • Y paid £16M for claims in 1999, item 5 above. These will not feature in the FA00/S107 calculations as they were paid before the end of the year for which the RITC was paid.