Regulation 3 Equalisation reserve

Subject to regulation 4 below, every company which carries on credit insurance business shall maintain a reserve (in these Regulations referred to as an “equalisation reserve”) determined (at the option of the company) in accordance with one of the four methods set out in Schedule 1 to these Regulations.

In applying section 32(5) of the 1982 Act (margins of solvency), the value of the company’s liabilities shall be treated as being increased by the amount of the equalisation reserve.