GIM7060 - Equalisation reserves: classes other than credit business: calculation

The methods of calculating the equalisation reserve are set out in PRU 7.5.20 onwards.

The figures that are used in the equalisation reserve calculations are generally net of reinsurance, so that, for example “net claims incurred” means claims arising from events occurring during the year (including direct claims handling expenses) net of reinsurance recoveries and other recoveries such as salvage.

And in the case of a non-resident company within the scheme that operates through a UK branch the calculations are made by reference to business carried on in the United Kingdom only.