GIM6270 - Technical provisions: periods of account beginning on or after 1 January 2000: General Insurance Reserves (Tax) Regulations: the cumulative excess or deficiency

Regulation 3: Rule 7: the cumulative excess or deficiency

If the difference between the original and recalculated provisions is less than the 5% margin for error, the difference is ignored for the purposes of the calculation.

If it is greater than the margin for error, the margin is deducted. In the example in GIM6260, £4 would be deducted from £20, and the result, £16 is referred to as the “cumulative excess or deficiency”.

This is the difference between the original provisions and the recalculated provisions over the whole period between the balance sheet of the earlier period of account and the recalculation date.