Regulation 6 Companies carrying on mutual business and business other than mutual business

This regulation applies in any case where an insurance company which, in accordance with section 34A regulations, is required to make transfers into or out of an equalisation reserve in respect of any business carried on by that company for any accounting period, is carrying on both mutual business and business other than mutual business for the whole or any part of that period.

Paragraphs (a) and (b) of subsection (2) of section 444BA shall be modified so as to provide that, for the purposes of corporation tax, the amounts of the net premiums earned, the net premiums written and the net claims incurred which, in accordance with section 34A regulations, are used for the purpose of computing the amounts transferred into or out of the equalisation reserve or the amount of the maximum reserve in relation to the equalisation reserve for the accounting period in question, shall be restricted to the amounts attributed to business other than mutual business.

For the purposes of corporation tax, the modification specified in paragraph (2) shall be made before subsections (4) to (6) of section 444BA are applied.

In paragraph (2) “net premiums earned”, “net premiums written”, “net claims incurred” and “maximum reserve” have the meanings given by section 34A regulations.