Paragraph 9
For the purposes of paragraph 7 above, the provision for claims outstanding, in relation to a society and a year of account, is (subject to any applicable valuation regulations) the amount set aside by the society as at the beginning or end of the year of account as being an amount likely to be sufficient to meet–
the claims described in sub-paragraph (2) below, and
the expenses described in sub-paragraph (3) below,
less any recoverable amounts within the meaning of sub-paragraph (4) below.
The claims mentioned in sub-paragraph (1) above are claims under contracts of insurance in respects of incidents occurring–
in the case of an amount set aside as at the beginning of the year of account, before the beginning of that year, and
in the case of an amount set aside as at the end of a year of account, before the end of that year,
being claims which have not been treated as claims paid and including claims relating to business accounted for over a longer period than a year of account, claims the amounts of which have not been determined and claims arising out of incidents that have not been notified to the society.
The expenses mentioned in sub-paragraph (1) above are expenses (such as, for example, legal or medical costs) which are likely to be incurred by the society, whether through the employment of its own staff or otherwise, and are directly attributable to the settlement of individual claims, whether or not the individual claims in question are those mentioned in sub-paragraph (1) above.
Recoverable amounts for the purposes of sub-paragraph (1) above are amounts estimated by the society to be recoverable by it in respect of the claims mentioned in that sub-paragraph, including amounts recoverable from third parties and amounts recoverable from other insurers but excluding amounts recoverable in respect of reinsurance ceded by the society.