188体育

As outlined at LLM3050, where a member increased their share of a syndicate鈥檚 business, the amount of the RITC premium received would exceed the amount of the premium paid by that member. The excess received by a member over that paid by the same member represented new liabilities taken over. For the purposes of the calculation required by FA00/S107, those liabilities taken over are not referable to their year of origin, but to the year in which they become a liability for that member.

So if a member鈥檚 share goes up from 20% to 25% from 1997 to 1998, the additional 5% of the business taken on is new to that member.

There is an added complexity when the RITC is paid in subsequent years. The RITC paid for 1997鈥檚 liabilities in 1998 would normally be part of the cost of settlement of those liabilities. But for the additional 5% of 鈥榥ew business鈥�, it forms part of the original provision for 1998.

Example

Year of account	Liabilities for	RITC paid	-	Claims paid
1997	1997	拢50惭	-	听
Y has 20% share	拢10惭	-	听	听
听	听	听	听	听
1998	1997	拢40惭	拢20惭	听
听	1998	拢60惭	拢60惭	听
听	total	拢100惭	拢80惭	听
Y has 25% share	拢25惭	拢20惭	听	听
听	听	听	听	听
1999	1997	拢30惭	拢10惭	听
听	1998	拢60惭	拢20惭	听
听	1999	拢60惭	拢80惭	听
听	total	拢150惭	拢110惭	听
Y has 40% share	拢60惭	拢44惭	听	听

The RITC premium for 1997 would actually be paid at 31 December 1999 and claims against it would be paid in year ended 31 December 2000.

The figures for the FA00/S107 calculations are at LLM3140 to LLM3160.