The Insurance Companies (Reserves) (Tax) Regulations 1996

Differing treatments of reserves

3.—(1) This regulation applies in any case where for any accounting period—

(a) an insurance company maintains any reserve to which these Regulations apply, and

(b) the amount of that reserve for the purposes of the Tax Acts is different from the amount of that reserve as maintained for regulatory purposes.

(2) A separate computation of the amount of the reserve for the purposes of the Tax Acts and of the amount of the reserve as maintained for regulatory purposes shall be made for each accounting period until, in any later accounting period, the two computations produce the same opening balance for the reserve.

(3) For the purposes of this regulation a reserve is maintained by a company for regulatory purposes if it is maintained—

(a) by virtue of section 34A regulations, or

(b) for the purposes of the company’s statutory accounts, or

(c) for the purposes of any credit insurance business in accordance with requirements specified in subsection (3) of section 444BD.