Section EZ 29 — Income Tax Act 2007: Private insurers under Accident Insurance Act 1998

EZ 29 Private insurers under Accident Insurance Act 1998 When this section applies (1) This section applies when an insurer, as defined in paragraph (a) of the definition of insurer in section 13 of the Accident Insurance Act 1998, has a reserve in a tax year to cover the following, all of which relate to events covered by the Accident Insurance Act 1998 occurring before the end of the tax year: (a) claims that have been made with the insurer but have not been settled before the end of the tax year; and (b) claims that are expected to be made with the insurer in relation to events that the insurer knows about; and (c) an estimate of claims that have not been reported to the insurer in relation to events that the insurer does not know about. Adjustment to deduction (2) When the closing value of the reserve for a tax year is more than the opening value, the deduction that the insurer is allowed is adjusted by an amount equal to the amount calculated using the formula— closing value − opening value. Adjustment to income (3) When the opening value of the reserve for a tax year is more than the closing value, the income of the insurer is adjusted by an amount equal to the amount calculated using the formula— opening value − closing value. Amount (4) The reserve at the end of the tax year is— (a) an amount calculated by an actuary applying subsection (5) and adopted by the insurer for financial reporting purposes; or (b) if no such amount has been calculated, an amount determined by the Commissioner, who may seek the advice of an actuary in determining it. Calculation or determination of reserve (5) A person calculating or determining the amount of a reserve under subsection (4) must ensure that the amount has regard to— (a) generally accepted accounting practice; and (b) generally accepted actuarial practice; and (c) the present value of expected future payments. Link with subpart DA (6) This section supplements the general permission. The general limitations still apply. Defined in this Act: actuary , amount , Commissioner , deduction , general limitation , general permission , generally accepted accounting practice , pay , supplement , tax year , Compare: 2004 No 35 s EZ 27 Section EZ 29(4)(b): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).