Regulation 3 set out rules for recalculating the "original provisions"
for the earlier period of account.
Rule 1: Subject to regulation 5 (GIM6350), all calculations were to be made in sterling.
Rule 2: Determined the "original provisions for the earlier period of account".
Rule 3: Determined out the cost of settling liabilities to which the original provisions related.
Rule 4: Applied where the insurer entered into a reinsurance contract or a novation .
Rule 5: Discounted each liability and aggregated them to find the "recalculated provisions"
Rule 6: Compared the difference between original and recalculated provisions and a "margin for error".
Rule 7: Subject to the margin for error, the difference represented the "cumulative excess or deficiency".
Rule 8: Compared the cumulative excess or deficiency with amounts found in "intervening periods".
Rule 8A: Applied where an election had been made under FA00/S107 (4).
Rule 9: Calculated interest on the result of Rule 8 to find the excess or deficiency for the period in which the calculation is made.
Rule 10: UPP and URP were excluded from the rules.