The Companies Act 1985 (Insurance Companies Accounts) Regulations 1993

Chapter IV Interpretation of Part I

General

81.—(1) The following definitions apply for the purposes of this Part of this Schedule and its interpretation—

“the 1982 Act” means the Insurance Companies Act 1982;

“fungible assets” means assets of any description which are substantially indistinguishable one from another;

“general business” has the same meaning as in the 1982 Act;

“lease” includes an agreement for a lease;

“listed investment” means an investment listed on a recognised stock exchange, or on any stock exchange of repute outside Great Britain and the expression “unlisted investment” shall be construed accordingly;

“long lease” means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years;

“long term business” has the same meaning as in the 1982 Act;

“long term fund” means the fund or funds maintained by a company in respect of its long term business in accordance with the provisions of the 1982 Act;

“policy holder” has the same meaning as in the 1982 Act;

“provision for unexpired risks” means the amount set aside in addition to unearned premiums in respect of risks to be borne by the company after the end of the financial year, in order to provide for all claims and expenses in connection with insurance contracts in force in excess of the related unearned premiums and any premiums receivable on those contracts;

“short lease” means a lease which is not a long lease.

(2) In this Part of this Schedule the “ECU” means the unit of account of that name defined in Council Regulation (EEC) No.3180/78 as amended.

The exchange rates as between the ECU and the currencies of the member States to be applied for each financial year shall be the rates applicable on the last day of the preceding October for which rates for the currencies of all the member States were published in the Official Journal of the Communities.

Loans

82.  For the purposes of this Part of this Schedule a loan or advance (including a liability comprising a loan or advance) is treated as falling due for repayment, and an instalment of a loan or advance is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.

Materiality

83.  For the purposes of this Part of this Schedule amounts which in the particular context of any provision of this Part are not material may be disregarded for the purposes of that provision.

Provisions

84.  For the purposes of this Part of this Schedule and its interpretation —

(a) references in this Part to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets;

(b) any reference in the profit and loss account format or the notes thereto set out in Section B of this Part to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description; and

(c) references in this Part to provisions for liabilities or charges (other than provisions referred to in paragraphs 43 to 53 above) are to any amount retained as reasonably necessary for the purpose of providing for any liability or loss which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.

Scots land tenure

85.  In the application of this Part of this Schedule to Scotland—

“land of freehold tenure” means land in respect of which the company is the proprietor of the dominium utile or, in the case of land not held on feudal tenure, is the owner;

“land of leasehold tenure” means land of which the company is the tenant under a lease;

and the reference to ground-rents, rates and other outgoings includes feu-duty and ground annual.

Staff costs

86.  For the purposes of this Part of this Schedule and its interpretation —

(a) “Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement;

(b) “Pension costs” includes any other contributions by the company for the purposes of any pension scheme established for the purpose of providing pensions for persons employed by the company, any sums set aside for that purpose and any amounts paid by the company in respect of pensions without first being so set aside; and

(c) any amount stated in respect of either of the above items or in respect of the item “wages and salaries” in the company’s profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph 79(1)(a) above.