34A General business: equalisation reserve.

1

Every insurance company to which this section applies which carries on general business of a prescribed description shall maintain, in accordance with regulations made for the purposes of this section, a reserve (in this section referred to as an “equalisation reserve”) in respect of its general business of that description.

2

Subject to subsection (3) below, this section applies to any insurance company to which this Part of this Act applies—

a

whose head office is in the United Kingdom;

b

whose business in the United Kingdom is restricted to reinsurance; or

c

whose head office is not in a member State.

3

This section does not apply to an insurance company of a description prescribed for the purposes of this subsection.

4

Without prejudice to the generality of subsection (1) above, regulations made for the purposes of this section may make provision—

a

as to the circumstances in which, and times at which, amounts are to be placed to, or taken from, an equalisation reserve;

b

as to the determination of the amounts to be so placed or taken; and

c

as to such other matters incidental to the maintenance of an equalisation reserve as the Secretary of State considers expedient.

7

In applying subsection (5) above, the amount of the company’s liabilities shall be taken to be increased by the amount of any reserve maintained under section 34A below.