Document ID: chunk:federal_register_of_legislation:C2010C00575:schedule:2j:p1
Version: federal_register_of_legislation:C2010C00575
Segment Type: schedule
Provision Reference: sch 2J (pt 1/5)
Character Range: 15518–18450

Schedule 2J—General insurance

Division 321—General insurance companies

Table of Subdivisions

 Guide to Division 321
321‑A Provision for or payment of claims
321‑B Premium income

Guide to Division 321

321‑1  What this Division is about

      This Division deals with several disparate matters relating to the taxation of general insurance companies.

Subdivision 321‑A—Provision for or payment of claims

Guide to Subdivision 321‑A

321‑5  What this Subdivision is about

      This Subdivision contains provisions relating to the assessment of general insurance companies in respect of provision for or payment of claims.

Table of sections

Operative provisions

321‑10 Amount to be included in assessable income for outstanding claims liability
321‑15 Deduction for outstanding claims liability
321‑20 How value of outstanding claims liability is worked out
321‑25 Deduction for claims paid during year of income
321‑30 Application: insurance business other than reinsurance business
321‑35 Application: reinsurance business

[This is the end of the Guide]

Operative provisions

321‑10  Amount to be included in assessable income for outstanding claims liability

  If the value, at the end of a year of income (the current year of income), of the outstanding claims liability of a general insurance company under general insurance policies is less than the value, at the end of the previous year of income, of that liability, the company's assessable income of the current year of income includes an amount equal to the difference.

321‑15  Deduction for outstanding claims liability

  If the value, at the end of a year of income (the current year of income), of the outstanding claims liability of a general insurance company under general insurance policies exceeds the value, at the end of the previous year of income, of that liability, the company can deduct for the current year of income an amount equal to the excess.

321‑20  How value of outstanding claims liability is worked out

  The value of the outstanding claims liability, at the end of a year of income, of a general insurance company under general insurance policies issued in the course of carrying on insurance business is:
 (a) the sum of the amounts that, at that time, the company determines, based on proper and reasonable estimates, to be appropriate to set aside and invest in order to meet:
 (i) liabilities for outstanding claims under those policies; and
 (ii) direct settlement costs associated with those outstanding claims;
less
 (b) any part of that sum that at that time the company expects to recover under a policy of reinsurance or in any other way.

321‑25  Deduction for claims paid during year of income

  A general insurance company can deduct amounts paid during the year of income in respect of claims under general insurance policies.

321‑30  Application: insurance business other than reinsurance business