Document ID: chunk:federal_register_of_legislation:C2011C00610:clause:5_2:p2
Version: federal_register_of_legislation:C2011C00610
Segment Type: clause
Provision Reference: sch 5 cl 2 (pt 2/4)
Character Range: 216479–219468

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 value of unearned premium reserve
321‑55 Deduction for increase in value of unearned premium reserve
321‑60 How value of unearned premium reserve 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 or receivable by the company during the current year in respect of *general insurance policies.

321‑50  Assessable income to include amount for reduction in value of unearned premium reserve

  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 unearned premium reserve; exceeds
 (b) the value, at the end of the current year, of that reserve.

Note: Those values are worked out under section 321‑60.

321‑55  Deduction for increase in value of unearned premium reserve

  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 unearned premium reserve; exceeds
 (b) the value, at the end of the previous income year, of that reserve.

Note: Those values are worked out under section 321‑60.

321‑60  How value of unearned premium reserve is worked out

  Work out the value, at the end of an income year, of a *general insurance company's unearned premium reserve in this way:

      Method statement
           Step 1. Add up the gross premiums received or receivable by the company, in relation to *general insurance policies issued in the course of carrying on *insurance business, in that or an earlier income year.
           Step 2. Reduce the step 1 amount by so much of the costs incurred by the company in connection with the issue of those policies as relate to the gross premiums, including, for example, costs such as:

                (a) commission and brokerage fees; and
                (b) administration costs of processing insurance proposals and renewals; and
                (c) administration costs of collecting premiums; and
                (d) selling and underwriting costs; and
                (e) fire brigade charges; and
                (f) stamp duty; and
                (g) other charges, levies and contributions imposed by governments or governmental authorities that directly relate to general insurance policies.

           Step 3. Reduce the step 2 amount by any premiums (the relevant reinsurance premiums) paid or payable by the company, in that or an earlier income year, for