Rule 330 limits the amount an insurer other than a life insurer may carry to a reserve for unexpired risks, including the additional reserve under paragraph 4(1)(d) of Schedule XIV, by class of business — 100% of net premium income for fire and engineering insurance covering terrorism risks and for marine insurance, and 50% for other fire and miscellaneous insurance.
330
Rules 2026 · Rule 330
Limits of reserve for unexpired risks
Rules 311-333
The limits (sub-rule 1). In computing profits and gains of insurance business other than life insurance, the amount carried over to a reserve for unexpired risks, including any amount carried over to an additional reserve eligible for deduction under paragraph 4(1)(d) of Schedule XIV, shall not exceed: (a) for fire insurance or engineering insurance that covers terrorism risks, 100% of the net premium income of that business of the tax year; (b) for fire insurance or miscellaneous insurance other than those in (a), 50% of the net premium income; or (c) for marine insurance, 100% of the net premium income.
Excess amounts (sub-rule 2). Any amount carried to the reserve that is not allowed as a deduction under this rule for a tax year is not included in the total income of the next tax year in the revenue account to which it is credited.
Definitions (sub-rule 3). "Marine insurance" includes Export Credit Insurance. "Net premium income" is the premium received, less the reinsurance premium paid, during the relevant tax year.