The Insurance Companies (Accounts and Statements) Regulations 1996

Regulations 6 and 7

SCHEDULE 1 BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

(Forms 9 to 17)

1.—(1) All the Forms included in the part of the return to which this Schedule relates (Forms 9 to 17) are to be laid out as shown in this Schedule, except that the instructions to Forms need not be reproduced.

(2) All amounts, descriptions or other text required to be shown as supplementary notes to a Form shall not be presented on the face of that Form, but shall be presented as a separate statement. The title of that statement shall identify the Form to which it relates.

Completion of Forms

2.  Where “source” appears at the head of a column on a Form, the information to be included in the preceding columns of a particular line is to be taken from those items in the returns to which reference is made on that line in the column headed “source”. No entries are to be made in the column headed “source”.

3.—(1) The company registration number to be entered in every Form shall be such number as may be agreed between the company and the Secretary of State.

(2) Boxes marked “GL/UK/CM” shall be completed by inserting—

(a) “UK” in the case of a Form which is—

(i) prepared by an EFTA company or an EEA deposit company in respect of long term or general business carried on through a branch in the United Kingdom; or

(ii) prepared by an external company (other than a pure reinsurer) in respect of long term or general business carried on through a branch in the United Kingdom; or

(iii) prepared by a Swiss general insurance company in respect of general business carried on through a branch in the United Kingdom; or

(b) “CM” in the case of a Form which is prepared by a United Kingdom deposit company in respect of a long term or general business carried on through branches in the EEA States concerned; or

(c) “GL” in any other case.

(3) Boxes marked “Period ended” should be completed so as to show, in numerals, the date of the last day of the financial year in question.

(4) No entry should be made in a box which is shaded or is not labelled.

(5) In the Forms “this financial year” means the financial year in question.

Currency

4.  The value of any asset or the amount of any liability denominated in a currency other than sterling shall be expressed in sterling as if conversion had taken place at the closing middle rate on the last day for which the appropriate rate is available in the financial year to which the asset or liability relates.

5.—(1) The amount of any income or expenditure shall be expressed in sterling using such bases of conversion as are in accordance with generally accepted accounting practice.

(2) The bases of conversion adopted shall be stated by way of supplementary note to Form 16 or, if there is no Form 16, by way of supplementary note to Form 40.

Presentation of amounts

6.  Negative amounts shall be shown between round brackets.

7.  Where in any Form an amount which is shown as brought forward from a previous year differs from the corresponding amount shown as carried forward from that year and the difference is not due solely to the use of a different rate to express other currencies in sterling, an explanation of the reason for the difference shall be given by way of a supplementary note to that Form.

8.—(1) Except to the extent permitted by sub-paragraph (2) of this paragraph, amounts due to or from the company shall be shown gross.

(2) In calculating amounts due to or from the company—

(a) amounts due from any person may, unless expressly provided otherwise, be included net of amounts which are due to that person, except that such amounts may be set off against each other under generally accepted accounting practice; and

(b) amounts due to any person may, unless expressly provided otherwise, be included net of amounts which are due from that person, except that such amounts may be set off against each other under generally accepted accounting practice.

(3) If amounts shown include amounts calculated on the basis set out in sub-paragraph (2) above, a supplementary note to Form 13 to that effect shall be provided.

(4) This paragraph does not apply to Form 17.

9.  All amounts are to be shown to the nearer £1,000.

Premiums

10.—(1) Notwithstanding the requirements of the shareholder accounts rules, amounts included in Forms 11 and 12 in respect of—

(a) gross premiums receivable;

(b) claims paid;

(c) claims outstanding; and

(d) reinsurance recoveries,

shall be determined in accordance with Schedules 3 to 5 to the Insurance Companies Regulations.

(2) Where any amount included in Form 11 or 12 pursuant to paragraph (1) above differs from the aggregate of the corresponding amounts included in Forms 21, 22, 24 and 25, there shall be stated by way of supplementary note to Form 11 or 12, as the case may be—

(a) the amount of such difference; and

(b) an explanation for such difference.

Counterparty exposure

11.—(1) There shall be given by way of a supplementary note to Form 13—

(a) the maximum extent to which, in accordance with any investment guidelines operated by the company, it was permitted to be exposed to any one counterparty during the financial year in question;

(b) the maximum extent to which, in accordance with such guidelines, it was permitted to be exposed to any one counterparty, other than by way of exposure to an approved counterparty, during the financial year in question; and

(c) an account of any occasions during the financial year on which either of those amounts was exceeded.

(2) In each case where the exposure of the company to a counterparty at the end of the financial year in question exceeds 5 per cent. of its long term business amount or general business amount, as appropriate—

(a) the amount of that exposure; and

(b) the nature of the assets held which give rise to that exposure,

shall be stated by way of a supplementary note to Form 13.

(3) There shall be stated by way of supplementary note to Form 13 the aggregate value of any rights to which paragraph 14 of Part I of Schedule 12 to the Insurance Companies Regulations applies(1).

Provision for adverse changes

12.  There shall be stated by way of supplementary note to Form 14 or 15 the methods and assumptions used to determine the amount of any provision made pursuant to regulation 61 of the Insurance Companies Regulations or, if there is no such provision, the methods and assumptions used to determine that no provision is required.

Liabilities

13.—(1) Subject to paragraph (3) below, the following information shall be given by way of a supplementary note to Form 14 or 15—

(a) in the case of any charge over assets of the company, the particulars specified in sub-paragraph (2) below or a statement that there are no such charges;

(b) the total potential liability, and the amount provided for that liability, to taxation on capital gains which might arise if the company disposed of its assets, or a statement that there is no such potential liability;

(c) a brief description of any other liabilities being contingent liabilities not included in Form 14 or 15 (other than liabilities arising under an inward contract of insurance or reinsurance) including, where practicable, the amounts or estimated amounts of those liabilities, or a statement that there are no such contingent liabilities;

(d) a brief description of any guarantee, indemnity or other contractual commitment, effected by the company other than in the ordinary course of its insurance business, in respect of the existing or future liabilities of any related companies, including—

(i) the maximum liability of the company specified in such guarantee, indemnity or contractual commitment or, where no such amount is specified, a statement to that effect;

(ii) the amount of any provision made in respect of such liability; and

(iii) the amount reported under sub-paragraph (c) above in respect of such liability,

or a statement that there are no such guarantees, indemnities or contractual commitments;

(e) a description of any other uncertainty where such a description is, in the opinion of the directors, necessary for a proper understanding of the financial position of the company.

2. The particulars referred to in sub-paragraph (1)(a) above are—

(a) the nature of the charge, including a brief description of the terms which are relevant to securing the prior claim of any person to assets which are subject to the charge;

(b) for each line in Form 13, the amount included in respect of assets which are subject to the charge; and

(c) for each line in Form 14 or 15, the amount included in respect of liabilities which are secured by the charge.

(3) Sub-paragraph (1)(a) and (c) above may be disregarded by a company in the case of—

(a) one or more charges over assets which are attributable to either the long term or the general business assets and whose aggregate value (as shown on Form 13) does not exceed 2½ per cent. of the long term or general business amount, as the case may be; or

(b) one or more contingent liabilities whose aggregate value does not exceed 2½ per cent. of the long term or general business amount, as the case may be.

(4) Sub-paragraph (1)(d) above may be disregarded by a company in respect of one or more guarantees, indemnities or contractual commitments where the aggregate of the maximum liabilities specified in such guarantees, indemnities or contractual commitments does not exceed 2½ per cent. of the long term or general business amount, as the case may be.

(5) For the purposes of this paragraph, “charge” shall include any arrangement whatsoever, whether contractual or otherwise, which operates to secure the prior claim of any person over general creditors to any assets on a winding up of the company.

Reconciliation

14.—(1) For a United Kingdom company an explanation shall be given by way of supplementary note to Form 10 reconciling—

(a) line 99 of Form 13 (category of assets “1”) less line 59 of Form 15; and

(b) the amount shown under balance sheet item A “capital and reserves” in the company’s accounts prepared pursuant to the shareholder accounts rules for the financial year in question.

(2) Where for a United Kingdom company there are no accounts pursuant to sub-paragraph 1(b) above (or the accounts have not yet been prepared), this shall be stated by way of supplementary note to Form 10.

Derivative contracts

15.  Any derivative contract entered into by the company—

(a) the value of which is taken into account for the purposes of calculating benefits payable to policy holders under property linked contracts; or

(b) in order to match its liabilities in respect of the payment of index linked benefits, shall be excluded from Form 17.

16.  Where, in respect of any derivative contract included in Form 17, assets have been transferred to or for the benefit of a company by way of variation margin there shall be stated by way of supplementary note to Form 17—

(a) the aggregate amount of any liability to repay such assets or equivalent assets;

(b) for each line in Form 13, the amount included in respect of such assets; and

(c) to what extent any amounts included in Form 13 have taken account of any requirement to repay such assets or equivalent assets.

17.  If—

(a) the aggregate value of rights under contracts or in respect of assets, either of which have the effect of derivative contracts, exceeds 2½ per cent. of the aggregate value of assets shown at line 89 of Form 13; or

(b) the aggregate amount of liabilities under contracts or in respect of assets, either of which have the effect of derivative contracts, exceeds 2½ per cent. of the aggregate of the amounts shown in lines 21 to 47 of Form 14 or lines 31 to 51 of Form 15, as appropriate,

the corresponding value, if not zero, shall be stated (by way of supplementary note to Form 17) for each line in Form 13, 14 or 15 and paragraph 16 above shall apply to the company as if such contracts or assets had been included in Form 17.

(1)

Schedule 12 was substituted by S.I. 1995/3248, reg. 20.