Document ID: chunk:federal_register_of_legislation:C2025C00014:section:446:p2
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 446 (pt 2/2)
Character Range: 2064022–2066512

subsection, would be the passive income of the company of the statutory accounting period.
net assets means the excess at the end of the statutory accounting period of the total assets of the company over the total liabilities of the company.
outstanding claims means the amount that the company would, at the end of the statutory accounting period, based on proper and reasonable estimates, need to set aside and invest in order to meet liabilities of the company that have arisen or will arise:
 (a) under general insurance policies (including reinsurance policies, but not including life assurance policies); and
 (b) in respect of events that occurred during or before the period.
solvency amount is the amount worked out under subsection (5).
tainted outstanding claims means so much of the outstanding claims of the company at the end of the statutory accounting period as is referable to general insurance policies that give rise to tainted services income of the company of any statutory accounting period.
total assets means the total assets of the company at the end of the statutory accounting period.
 (5) In subsection (4):
solvency amount is the amount worked out using the formula:

where:
maximum event retention means the amount that, at the end of the statutory accounting period, the company has determined is the maximum that would be payable to the owners of policies as a result of the happening of any one event. The amount must be worked out on the basis of a reasonable and proper estimate.
minimum solvency means the greater of:
 (a) 20% of the company's premium income (within the meaning of the Insurance Act 1973) during the statutory accounting period; and
 (b) 15% of the company's outstanding claims as at the end of the statutory accounting period.
outstanding claims means the amount that the company would, at the end of the statutory accounting period, based on proper and reasonable estimates, need to set aside and invest in order to meet liabilities of the company that have arisen or will arise:
 (a) under general insurance policies (including reinsurance policies, but not including life assurance policies); and
 (b) in respect of events that occurred during or before the period.
tainted outstanding claims means so much of the outstanding claims of the company at the end of the statutory accounting period as is referable to general insurance policies that give rise to tainted services income of the company of any statutory accounting period.