a

basic life assurance and general annuity business,

b

gross roll-up business, and

c

PHI business.

4A

Income arising from, and gains or losses accruing on the disposal of, foreign currency assets is referable to gross roll-up business.

6

For the purposes of subsection (5) above “the relevant fraction”, in relation to basic life assurance and general annuity business, is—

$\frac{A}{A+B+C}$

where—

A is the aggregate of—

• (a) the mean of the opening and closing liabilities of the basic life assurance and general annuity business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business,

• (b) if there has been a relevant reattribution, the mean of the opening and closing amounts of the shareholders' excess assets, and

• (c) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;

B is the aggregate of—

• (a) the mean of the opening and closing liabilities of the gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and

• (b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts; and

C is the aggregate of—

• (a) the mean of the opening and closing liabilities of the PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and

• (b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts.

6A

For the purposes of subsection (5) above “the relevant fraction”, in relation to gross roll-up business, is—

$\frac{B}{A+B+C}$

where A, B and C have the same meaning as in subsection (6) above.

6B

For the purposes of subsection (5) above “the relevant fraction”, in relation to PHI business, is—

$\frac{C}{A+B+C}$

where A, B and C have the same meaning as in subsection (6) above.

6C

But if the denominator found in accordance with subsection (6), (6A) or (6B) above is nil, the relevant fraction for the purposes of subsection (5) above in relation to the category of business in question is such fraction as is just and reasonable.