5‑5 Eligible premium income for working 5‑5 Eligible premium income for working out special component

5‑5 Eligible premium income for working out special component

(1) For paragraph 8(3)(h) of the Act, this section determines how a general insurance company’s eligible premium income is to be worked out. (2) For paragraph 8(6)(b) of the Act, the period for which a general insurance company’s eligible premium income is to be worked out is the previous calendar year. (3) For paragraph 8(6)(a) of the Act, the part of the general insurance company’s premium income that is eligible premium income is the sum of: (a) the company’s gross premium income (if any) from public liability insurance and from product liability insurance (if any) during the previous calendar year, worked out under subsection (4), but only so much of that gross premium income as, when multiplied by the special public/product percentage, does not exceed the special public/product maximum; and (b) the company’s gross premium income from professional indemnity insurance (if any) during the previous calendar year, worked out under subsection (6), but only so much of that gross premium income as, when multiplied by the special professional percentage, does not exceed the special professional maximum. (4) Gross premium income from public liability insurance and from product liability insurance during the previous calendar year is the sum of: (a) the aggregate of the amounts required to be reported in: (i) the policy file for the 6 months ending on 30 June in the previous calendar year; and (ii) the policy file for the 6 months ending on 31 December in the previous calendar year; in the column headed “Gross Earned Premium” (and referred to as “field 15b”), where the class of business reported in the column headed “Class of Business” (and referred to as “field 2”) is “Public & Product” (“PL”); and (b) for each record in either of those policy files for which the general insurance company has not completed the column headed “Gross Earned Premium”—the aggregate of each GEP amount for that record worked out in accordance with subsection (5). (5) For subsection (3), a GEP amount for a record in a policy file is worked out using the formula:

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where:

GAP is the gross annualised premium reported in the policy file in respect of the relevant policy in the column headed “Gross Annualised Premium” (and referred to as “field 15a”), where the class of business reported in the column headed “Class of Business” (and referred to as “field 2”) is “Public & Product” (“PL”).

F is the number of days during which the policy was in force in the 6 months covered by the policy file, expressed as a percentage of the number of days in the previous calendar year.

(6) For subsection (4), gross premium income from professional indemnity insurance during the previous calendar year is the sum of: (a) the aggregate of the amounts required to be reported in: (i) the policy file for the 6 months ending on 30 June in the previous calendar year; and (ii) the policy file for the 6 months ending on 31 December in the previous calendar year; in the column headed “Gross Earned Premium” (and referred to as “field 15b”), where the class of business reported in the column headed “Class of Business” (and referred to as “field 2”) is “Professional Risk” (“PI”); and (b) for each record in either of those policy files for which the general insurance company has not completed the column headed “Gross Earned Premium”—the aggregate of each GEP amount for that record worked out in accordance with subsection (7). (7) For subsection (5), a GEP amount for a record in a policy file is worked out using the formula: