{
  "url": "https://openlegislation.uk/insurance-companies-accounts-and-statements-regulations-1996/regulation-12",
  "json_url": "https://openlegislation.uk/insurance-companies-accounts-and-statements-regulations-1996/regulation-12.json",
  "legislation": "uksi/1996/943",
  "legislation_title": "The Insurance Companies (Accounts and Statements) Regulations 1996",
  "legislation_url": "https://openlegislation.uk/insurance-companies-accounts-and-statements-regulations-1996",
  "path": "regulation/12",
  "kind": "regulation",
  "number": "12",
  "heading": "Risk groups for general business",
  "text": "(1) Every company which carries on general business shall, in the manner provided in this regulation and for the purpose of the forms specified in regulation 13 below, classify the direct and facultative business carried on by it in each country into risk groups by reference to accounting classes 1 to 8 as appropriate.\n(2) Each risk group classified for the purposes of this regulation shall comprise risks within an accounting class insured by the company in each country which, in the opinion of the directors, are not significantly dissimilar, either by reference to the nature of the objects exposed to such risks or by reference to the nature of the cover against such risks provided by the company.\n(3) Subject to paragraph (4) below, the company shall classify its risks so that—\n(a) risks are not included in the same risk group where, having regard to the patterns of risk, claims incurrence and settlement patterns, it is necessary to group them separately for the purposes of applying statistical methods (within the meaning of paragraph 47(1) of the shareholder accounts rules) in calculating the provision for claims outstanding in accordance with generally accepted accounting practice;\n(b) claims-made policies are not included in the same risk group as policies which are not claims-made policies;\n(c) policies falling within general business class 14, 15, 16, 17 or 18 are not included in the same risk group as policies falling within any other of those general business classes, except that policies falling within general business class 14 may be included in the same risk group as policies falling within general business class 15;\n(d) policies in respect of private motor car risks are not included in the same risk group as policies in respect of other risks falling within accounting class 2;\n(e) policies in respect of comprehensive private motor car risks are not included in the same risk group as policies in respect of non-comprehensive private motor car risks; and\n(f) policies transferred to the company by way of a transfer approved by the Secretary of State pursuant to Schedule 2C of the Act are not included in the same risk group as other policies.\n(4) Paragraph (3) above shall not apply in relation to the risk group mentioned in any sub-paragraph of that paragraph where, in the case of any financial year—\n(a) the gross premiums written for that year in respect of that risk group are less than 2½ per cent. of the world-wide gross premiums written for all accounting classes for that year, or £500,000; or\n(b) the gross premiums written for that year in respect of the risk groups in which policies would in accordance with that sub-paragrpah be included (except the largest) are less than ½ per cent. of the world-wide gross premiums written for all accounting classes for that year, or £100,000.\n(5) Subject to paragraphs (2) to (4) above, a company may in respect of any accounting class include all business carried on by it in any country in any financial year as a single risk group.\n(6) Notwithstanding the provisions of paragraphs (2) to (4) above, a company may classify all business carried on by it in any country in respect of any accounting class in any financial year as a single risk group, provided that gross premiums written for that year in respect of that business are less than—\n(a) 5 per cent. of the world-wide gross premiums written for all accounting classes for that year; or\n(b) £500,000.\n(7) Notwithstanding the provisions of paragraphs (1) to (4), no risk groups need be classified by a company in respect of a country if the gross premiums written in respect of business falling within accounting classes 1 to 8 and carried on in that country are—\n(a) in the case of any financial year ending before 23rd December 1997, less than—\n(i) 2½ per cent. of the world-wide gross premiums written for all accounting classes for that year; or\n(ii) £100,000.\n(b) in the case of any financial year ending on or after that date, less than—\n(i) 1 per cent. of the world-wide gross premiums written for all accounting classes for that year; or\n(ii) £100,000;\n(8) For the purposes of this regulation and regulation 13 below, home foreign business shall be treated as though it were carried on in a different country from other business carried on in the United Kingdom.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "footnote",
      "label": "f1",
      "text": "Schedule 2C was inserted by S.I. 1994/1696, reg. 28 and amended by S.I. 1994/3123, reg. 7."
    }
  ],
  "outstanding_effects": [
    {
      "type": "amended",
      "affecting": "uksi/1998/2996",
      "affecting_title": "The Insurance Companies (Amendment) Regulations 1998"
    }
  ],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1996/943/regulation/12",
    "retrieved_at": "2026-10-29T12:46:26.922464+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}