Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 9/14)
Character Range: 5063761–5066703

of adjusted liability for incurred claims is worked out
  Work out the value, at the end of an income year, of a *general insurance company's adjusted *liability for incurred claims under *general insurance policies in this way:

      Method statement
           Step 1. Use the *applicable insurance contracts accounting standard to measure, at the end of the income year, the company's *liability for incurred claims under *general insurance policies, but when doing so disregard any claims handling costs that are neither attached to, nor directly attributable to, a particular claim.
           Step 2. Using that standard, reduce the result from step 1 by so much of that result as the company expects at the end of the income year to recover under a reinsurance contract:

                (a) within the meaning of that standard; but
                (b) that is not one to which subsection 148(1) of the Income Tax Assessment Act 1936 (about reinsurance with non‑residents) applies.

321‑25  Deduction for claims paid during current year
  A *general insurance company can deduct for the *current year amounts paid during that year in respect of claims under *general insurance policies.

Subdivision 321‑B—Premium income of general insurance companies

Table of sections
321‑45 Assessable income to include gross premiums
321‑50 Assessable income to include amount for reduction in adjusted liability for remaining coverage
321‑55 Deduction for increase in adjusted liability for remaining coverage
321‑60 How the value of adjusted liability for remaining coverage is worked out

321‑45  Assessable income to include gross premiums
  A *general insurance company's assessable income for the *current year includes the gross premiums received by the company during the current year in respect of *general insurance policies.

321‑50  Assessable income to include amount for reduction in adjusted liability for remaining coverage
  A *general insurance company's assessable income for the *current year includes an amount equal to the amount (if any) by which:
 (a) the value, at the end of the previous income year, of the company's adjusted *liability for remaining coverage under *general insurance policies; exceeds
 (b) the value, at the end of the current year, of that liability.
Note: Those values are worked out under section 321‑60.

321‑55  Deduction for increase in adjusted liability for remaining coverage
  A *general insurance company can deduct for the *current year an amount equal to the amount (if any) by which:
 (a) the value, at the end of the current year, of the company's adjusted *liability for remaining coverage under *general insurance policies; exceeds
 (b) the value, at the end of the previous income year, of that liability.
Note: Those values are worked out under section 321‑60.

321‑60  How the value of adjusted liability for remaining coverage is worked out
  Work out the value, at the end of an