Section EY 26 — Income Tax Act 2007: Unearned premium reserving amount: non-participation policies not annuities

EY 26 Unearned premium reserving amount: non-participation policies not annuities Calculation of reserving amount (1) For an income year (the current year ), a life insurer has an unearned premium reserving amount for a class of policies calculated using the formula— opening unearned premium reserve − closing unearned premium reserve. Definition of items in formula (2) In the formula,— (a) opening unearned premium reserve is— (i) the amount of the life insurer’s closing unearned premium reserve for the class of policies, for the income year before the current year; or (ii) the amount that would be the unearned premium reserve for the class of policies, using subsection (3) with necessary modifications, calculated at the end of the prior year, if the life insurer has no closing unearned premium reserve for the income year before the current year: (b) closing unearned premium reserve is the amount of the life insurer’s unearned premium reserve under subsection (3) for the class of policies, calculated at the end of the current year. Unearned premium reserve (3) A life insurer's unearned premium reserve is the amount of the premium in the current year or a prior year, for the relevant policies, that relates to life risk components and relevant costs, in income years after the current year, but subtracting relevant life reinsurance premiums. Defined in this Act: amount , class of policies , income year , life insurer , life reinsurance , life risk component Section EY 26: substituted, on 1 July 2010, by section 190(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 26(2)(a)(ii): amended (with effect on 1 July 2010), on 7 September 2010, by section 48(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).