LAM15350 - Excess expenses losses and deficits: Loss reform: shock losses: requirements for a valid shock loss claim: CTA10/S269ZK and CTA10/S269ZL

An insurance company may claim that losses of an accounting period (AP) are shock losses providing certain conditions are met. »Ê¹ÚÌåÓýapp conditions are: -

  • »Ê¹ÚÌåÓýapp AP in which the shock loss arises begins on or after 1 April 2017
  • »Ê¹ÚÌåÓýapp loss must be capable of being carried forward to a later AP, and
  • »Ê¹ÚÌåÓýapp loss-making period and the solvency shock period (see LAM15310) must have one or more days in common.

»Ê¹ÚÌåÓýapp claim must:

  • be made within 2 years of the AP in which the loss arises (or a further period allowed by an officer of HMRC)
  • set out the solvency loss and the solvency shock period the losses relate to
  • state the company’s solvency capital requirement (SCR) at the beginning of the solvency shock period
  • set out the amount and calculation of the shock loss threshold
  • be submitted with:
    • the information specified in CTA10/S269ZL(1)(b)(i), and
    • a report by the company’s chief actuary (or equivalent if not a PRA-authorised person) confirming that the submitted information was: prepared in line with the relevant requirements if it had been disclosed in the company regulatory return; and the solvency loss and shock loss threshold have been calculated in accordance with the shock loss rules.

»Ê¹ÚÌåÓýapp claim may specify more than one solvency shock period but they must not overlap.