GIM6010 - Technical provisions: background
The paragraphs below explain the ‘unearned premium provision’ (UPP) and the ‘unexpired risks provision’ (URP). Strictly, the unearned premium provision is a deferred income item rather than a true provision. Remember that the most significant items within technical provisions are the provisions against claims outstanding and claims incurred but not yet reported - see GIM2170 for general accounting background. They also give guidance on the tax treatment of technical provisions according to established principles.
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Unearned Premium Provision |
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Unexpired Risks Provision |
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Unexpired Risks Provision: differences between accounts and regulatory return |
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Unexpired Risks Provision: discounting |
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Unexpired Risks Provision: exchange gains and losses |
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Unexpired Risks Provision: mortgage indemnity business |
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General |
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Accounting practice |
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Reported claims and 'incurred but not reported' (IBNR) |
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Salvage, subrogation and reinsurance recoveries |
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Exchange gains and losses |
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Claims handling expenses |
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Enquiries |
See GIM6145 to GIM6440 regarding the special rules of FA00/S107 which applied for periods from 1 January 2000 and periods ending before 19 July 2007, and GIM6500+ for the rules which (broadly) apply for periods from 1 January 2009.
