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Changes over time for: Paragraph 47
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Timeline of Changes
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Version Superseded: 06/04/2008
Status:
Point in time view as at 01/12/2003. This version of this provision has been superseded.
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You are viewing this legislation item as it stood at a particular point in time. A later version of this or provision, including subsequent changes and effects, supersedes this version.
Note the term provision is used to describe a definable element in a piece of legislation that has legislative effect – such as a Part, Chapter or section.
Changes to legislation:
There are currently no known outstanding effects for the Companies Act 1985, Paragraph 47.
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Changes to Legislation
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General businessU.K.
47(1)A provision shall in principle be computed separately for each claim on the basis of the costs still expected to arise, save that statistical methods may be used if they result in an adequate provision having regard to the nature of the risks.
(2)This provision shall also allow for claims incurred but not reported by the balance sheet date, the amount of the allowance being determined having regard to past experience as to the number and magnitude of claims reported after previous balance sheet dates.
(3)All claims settlement costs (whether direct or indirect) shall be included in the calculation of the provision.
(4)Recoverable amounts arising out of subrogation or salvage shall be estimated on a prudent basis and either deducted from the provision for claims outstanding (in which case if the amounts are material they shall be shown in the notes to the accounts) or shown as assets.
(5)In sub-paragraph (4) above, “subrogation” means the acquisition of the rights of policy holders with respect to third parties, and “salvage” means the acquisition of the legal ownership of insured property.
(6)Where benefits resulting from a claim must be paid in the form of annuity, the amounts to be set aside for that purpose shall be calculated by recognised actuarial methods, and paragraph 48 below shall not apply to such calculations.
(7)Implicit discounting or deductions, whether resulting from the placing of a current value on a provision for an outstanding claim which is expected to be settled later at a higher figure or otherwise effected, is prohibited.
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