Income Tax Regulations — 1400
1400 (1) For the purpose of paragraph 20(7)(c) of the Act, the amount prescribed in respect of an insurer for a taxation year is (a) the amount determined under subsection (3) in respect of the insurer for the year, where that amount is greater than nil, and (b) nil, in any other case. (2) For the purpose of paragraph 12(1)(e.1) of the Act, the amount prescribed in respect of an insurer for a taxation year is (a) the absolute value of the amount determined under subsection (3) in respect of the insurer for the year, where that amount is less than nil, and (b) nil, in any other case. (3) For the purposes of paragraphs (1)(a) and (2)(a), the amount determined under this subsection in respect of an insurer for a taxation year is the positive or negative amount determined by the formula A + B + (0.95 × C) − (0.9 × D) + E + F + G − [H − (0.9 × I) − (0.05 × J)] where A is the total of all amounts each of which is the liability for remaining coverage for a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts; B is the total of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts, that is (a) the liability for incurred claims for the group, if no portion of the liability for incurred claims is in respect of insurance policies other than insurance policies in respect of which (i) a claim that was incurred before the end of the year has been reported to the insurer before the end of the year, (ii) the claim is in respect of damages for personal injury or death, and (iii) the insurer has agreed to a structured settlement of the claim, and (b) in any other case, the amount that would be the liability for incurred claims for the group if the liability for incurred claims were determined excluding insurance policies other than insurance policies that meet the conditions in subparagraphs (a)(i) to (iii); C is the total of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts, that is (a) the liability for incurred claims for the group, if no portion of the liability for incurred claims is in respect of insurance policies that meet the conditions in subparagraphs (a)(i) to (iii) of the description of B, and (b) in any other case, the amount that would be the liability for incurred claims for the group if the liability for incurred claims were determined excluding insurance policies that meet the conditions in subparagraphs (a)(i) to (iii) of the description of B, D is the total of all amounts each of which is the contractual service margin for a group of insurance policies of the insurer at the end of the year that is in respect of (a) non-cancellable or guaranteed renewable accident and sickness policies that are in respect of accident and sickness insurance, (b) mortgage insurance, or (c) title insurance; E is an amount in respect of policies that insure a fidelity risk, a surety risk, a nuclear risk or a risk related to a financial loss of a lender on a loan made on the security of real property, equal to the lesser of (a) the total of the reported reserves of the insurer at the end of the year in respect of such risks (other than an amount included under the description of A, B, C, D or F), and (b) a reasonable amount as a reserve determined as at the end of the year in respect of such risks (other than an amount included under the description of A, B, C, D or F); F is the amount of a guarantee fund at the end of the year provided for under an agreement in writing between the insurer and His Majesty in right of Canada under which His Majesty has agreed to guarantee the obligations of the insurer under a policy that insures a risk related to a financial loss of a lender on a loan made on the security of real property; G is an amount in respect of poli