188体育

Where the member鈥檚 share of business increases (say from 20% to 25%) it seems straightforward that the original provisions were only 20% of the syndicate鈥檚 total. But where the member鈥檚 share of business reduces (say from 25% to 20%) the original provision is still only 20% of the syndicate鈥檚 business. The other 5% is payment of claims of the earlier year, and not a provision.

This brings out how the 鈥檒esser of鈥� rule in regulation 7(1) described at LLM3080 operated. As outlined at LLM3050, where a member reduces their share of the syndicate鈥檚 business, part of the RITC premium paid will be paid to a third party. This part therefore represents not a provision, but the cost of settling liabilities. It was therefore treated as such for the purposes of the calculation required by FA00/S107.

Example

Year of account	Liabilities for	RITC paid	Claims paid
1997	1997	拢50惭	-
听	听	听	听
Z has 40% share	拢20惭	-	听
听	听	听	听
1998	1997	拢40惭	拢20惭
听	1998	拢60惭	拢60惭
听	total	拢100惭	拢80惭
听	听	听	听
Z has 25% share	拢25惭	拢20惭	听
听	听	听	听
1999	1997	拢30惭	拢10惭
听	1998	拢60惭	拢20惭
听	1999	拢60惭	拢80惭
听	total	拢150惭	拢110惭
听	听	听	听
Z has 20% share	拢30惭	拢22惭	听

The RITC premium for 1997 would actually be paid at 31 December 1999 and claims against it would be paid in year ended 31 December 2000.

The figures for the FA00/S107 calculations are at LLM3180 to LLM3200.