GIM6160 - Technical provisions: periods of account beginning on or after 1 January 2000 and ending before 19 July 2007: section 107 FA 2000: definitions
FA00/S107 (7) defines certain of the terms used in the legislation.
- ‘Period of account’: the rules operate by reference to a ‘period of account’. This means a period for which accounts of the business are drawn up, and in nearly all cases will be identical with the accounting period for which the company assesses itself for corporation tax. In relation to Lloyd’s it means an underwriting year in which profits are declared. The application of the rules to Lloyd’s is dealt with in Chapter 3 of the Lloyd’s Manual.
- 'Technical provisions': this term has the same meaning as in Schedule 3 to the accounting Regulations SI2008/410, and refers to the amount in the accounts for unpaid liabilities. It includes provisions for unearned premiums and unexpired risks (see, however, Rule 10 on UPP and URP - GIM6320).
- 'Qualifying contract' means a reinsurance contract. The definition is relevant to Regulations 3 and 4 - GIM6240.
- 'General insurer' means any of the following that carry on general insurance business, as defined in the Financial Services and Markets Act 2000:
- an insurance company which has permission under FSMA Part 4 to carry on 'general business' in the UK. This means contracts within Part 1 of Schedule 1 to the Regulated Activities Order 2001, SI2001/544 (see GIM3090). This includes UK resident companies, and companies from outside the EEA with a UK branch
- an EEA firm with Schedule 3 FSMA Directive passport rights (a firm with its head office in the European Economic Area, other than the UK, carrying on business at or through a branch in the UK - see GIM10030)
- a 'Treaty firm' under Schedule 4 FSMA (a firm authorised in another EEA state - these are similar to the Directive passport rights, but granted on a case by case basis, see GIM10040)
- a controlled foreign company (GIM11080)
- an underwriting member of Lloyd's.