Regulation 10 Transfers from equalisation reserve where net premiums written fall below specified limits

(1)

This regulation applies to a Part II company where—

(a)

the company has carried on Part II business for no less than five financial years and net premiums written in respect of all that business in two or more of the four financial years preceding the last financial year are less than the amounts specified in regulation 5 (2)(a)(i) or (ii) above, as the case may be; or

(b)

the company has carried on Part II business for less than five financial years and the average net premiums written in respect of all that business in those years is less than the amounts specified in regulation 5 (2)(a)(i) or (ii) above, as the case may be; and

(c)

the company has an equalisation reserve to be brought forward from the financial year preceding the last financial year; and

(d)

net premiums written in the last financial year in respect of Part II business are less than the amounts specified in regulation 5 (2)(a)(i) or (ii) above, as the case may be.

(2)

In this regulation “average net premiums written” means the average amount of net premiums written in respect of that business in a financial year and any previous financial years ending on or after 23rd December 1996.

(3)

For the purposes of sub-paragraph (2) above, if any of the financial years which the company is required to take into account for the calculation of average net premiums written has been extended or shortened, pursuant to section 69 of the Act, the value of net premiums written in that financial year shall be the amount represented by the formula—

\frac{NPW \times 365}{d}

where—

NPW means net premiums written in the financial year concerned; and
d means the number of days falling in that financial year.

(4)

A company to which this regulation applies shall, at the end of the financial year, make a transfer from the equalisation reserve of such an amount as is necessary to reduce the equalisation reserve to zero.