Prudential Regulation Authority Rulebook

Insurance Class B1: Relevant net premium income and eligible gross technical liabilities. The levy is split into two in the ratio 75:25. The tariff base for the first portion (75%) is calculated by reference to relevant net premium income. The tariff base for the second portion (25%) is based on eligible gross technical liabilities.

Eligible gross technical liabilities are calculated in accordance with the method for calculating gross technical liabilities in fee block A3 in Part 3 of FEES 4 Annex 1B R with the following adjustments.

1. Eligible gross technical liabilities are calculated by reference to protected contracts of insurance with eligible claimants.
   
   
2. A participant firm may choose not to apply paragraph (1) and instead include all gross technical liabilities that it would be obliged to take into account for fee block A3 as long as the amount that it would include under (1) is lower.
   
   
3. If an incoming EEA firm does not report gross technical liabilities in the way contemplated by this table, the participant firm’s gross technical liabilities are calculated in the same way as they would be for a UK firm.
   
   
4. None of the notes for the calculation of fees in fee block A3 in Part 3 of FEES 4 Annex 1B R of the PRA Handbook apply except for the purposes of (2).
   
   
5. A directive friendly society must also calculate eligible gross technical liabilities in accordance with this table.
   
   
6. A non-directive friendly society must calculate gross technical liabilities as the amount that it is required to show in FSC 2 or FSC 1 - Form 9 line 11 in Appendix 10 of IPRU(FSOC) of the PRA Handbook (assets allocated towards the general insurance business required minimum margin) in relation to the most recent financial year of the participant firm (as at the applicable reporting date under 21.42) for which the participant firm is required to have reported that information to the PRA under IPRU(FSOC) of the PRA Handbook. A non-directive friendly society must disregard for this purpose such amounts as are not required to be included by reason of a waiver or a written concession carried forward as an amendment to the rule to which it relates under SUP TP of the PRA Handbook.

Insurance Class C1: Relevant net premium income and eligible mathematical reserves. The levy is split into two in the ratio 75:25. The tariff base for the first portion (75%) is calculated by reference to relevant net premium income. The tariff base for the second portion (25%) is based on mathematical reserves.

Eligible mathematical reserves are calculated in accordance with the method for calculating mathematical reserves in fee block A4 in Part 3 of FEES 4 Annex 1B R of the PRA Handbook with the following adjustments.

1. Eligible mathematical reserves are calculated by reference to protected contracts of insurance with eligible claimants.
   
   
2. A participant firm may choose not to apply paragraph (1) and instead include all mathematical reserves that it would be obliged to take into account for fee block A4 as long as the amount that it would include under (1) is lower.
   
   
3. If an incoming EEA firm does not report mathematical reserves in the way contemplated by this table, the participant firm’s mathematical reserves are calculated in the same way as they would be for a UK firm.
   
   
4. None of the notes for the calculation of fees in fee block A4 in Part 3 of FEES 4 Annex 1B R of the PRA Handbook apply except for the purposes of (3).
   
   
5. A directive friendly society must also calculate eligible mathematical reserves in accordance with this table.
   
   
6. A non-directive friendly society must calculate mathematical reserves as the amount that it is required to show in FSC 2 or FSC 1 - Form 9 line 23 in Appendix 10 of IPRU(FSOC) of the PRA Handbook (total mathematical reserves after distribution of surplus) in relation to the most recent financial year of the firm (as at the applicable reporting date under 21.42) for which the firm is required to have reported that information to the PRA under IPRU(FSOC) of the PRA Handbook. A non-directive friendly society must disregard for this purpose such amounts as are not required to be included by reason of a waiver or a written concession carried forward as an amendment to the rule to which it relates under SUP TP of the PRA Handbook.
   
   
7. The provisions relating to pension fund management business in Part 3 of FEES 4 Annex 1B R of the PRA Handbook does not apply. A participant firm undertaking such business that does not carry out any other activities within insurance class C1 (ignoring any activities that would have a wholly insignificant effect on the calculation of its tariff base for insurance class C1) must use its long-term insurance capital requirement instead of gross technical liabilities. The Long-term insurance capital requirement means the amount that it is required to show as its long-term insurance capital requirement in Form 2 Line 31 (Statement of solvency - long-term insurance business) in relation to the most recent financial year of the participant firm (as at the applicable reporting date under 21.42) for which the participant firm is required to have reported that information to the PRA.
   
   
8. The split in the levy between relevant net premium income and eligible mathematical reserves does not apply to a partnership pension society (as defined in chapter 7 of IPRU(FSOC) (Definitions) of the PRA Handbook). Instead the levy is only calculated by reference to relevant net premium income.