Income Tax Regulations

A + B + (0.95 × C) − (0.9 × D) + E + F + G − (H − (0.9 × I))

where

A

is the total of all amounts each of which is the liability for remaining coverage for a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts;

B

is the total of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts, that is

• (a) the liability for incurred claims for the group, if no portion of the liability for incurred claims is in respect of insurance policies other than insurance policies in respect of which

  • (i) a claim that was incurred before the end of the year has been reported to the insurer before the end of the year,

  • (ii) the claim is in respect of damages for personal injury or death, and

  • (iii) the insurer has agreed to a structured settlement of the claim, and

• (b) in any other case, the amount that would be the liability for incurred claims for the group if the liability for incurred claims were determined excluding insurance policies other than insurance policies that meet the conditions in subparagraphs (a)(i) to (iii);

C

is the total of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts, that is

• (a) the liability for incurred claims for the group, if no portion of the liability for incurred claims is in respect of insurance policies that meet the conditions in subparagraphs (a)(i) to (iii) of the description of B, and

• (b) in any other case, the amount that would be the liability for incurred claims for the group if the liability for incurred claims were determined excluding insurance policies that meet the conditions in subparagraphs (a)(i) to (iii) of the description of B,

D

is the total of all amounts each of which is the contractual service margin for a group of insurance policies of the insurer at the end of the year that is in respect of

• (a) non-cancellable or guaranteed renewable accident and sickness policies that are in respect of accident and sickness insurance,

• (b) mortgage insurance, or

• (c) title insurance;

E

is an amount in respect of policies that insure a fidelity risk, a surety risk, a nuclear risk or a risk related to a financial loss of a lender on a loan made on the security of real property, equal to the lesser of

• (a) the total of the reported reserves of the insurer at the end of the year in respect of such risks (other than an amount included under the description of A, B, C, D or F), and

• (b) a reasonable amount as a reserve determined as at the end of the year in respect of such risks (other than an amount included under the description of A, B, C, D or F);

F

is the amount of a guarantee fund at the end of the year provided for under an agreement in writing between the insurer and His Majesty in right of Canada under which His Majesty has agreed to guarantee the obligations of the insurer under a policy that insures a risk related to a financial loss of a lender on a loan made on the security of real property;

G

is an amount in respect of policies that insure earthquake risks in Canada equal to the lesser of

• (a) the portion of the reported reserve of the insurer at the end of the year in respect of those risks that is attributable to accumulations from premiums in respect of those risks (other than an amount included under the description of A, B, C, D, E or F), and

• (b) a reasonable amount as a reserve determined at the end of the year in respect of those risks (other than an amount included under the description of A, B, C, D, E or F);

H

is the total of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

• (a) if no portion of the reinsurance contract held amount for the group is in respect of the reinsurance of a risk under life insurance policies, the reinsurance contract held amount for the group, and

• (b) in any other case, the amount that would be the reinsurance contract held amount for the group if the amount were determined excluding any portion of that amount that is in respect of the reinsurance of a risk under life insurance policies; and

I

is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

• (a) if no portion of the contractual service margin for the group is in respect of the reinsurance of a risk under a policy other than a policy described in paragraph (a) of the description of D, or a policy in respect of insurance described in paragraph (b) or (c) of the description of D, the contractual service margin for the group, and

• (b) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion of the contractual service margin other than that portion that is in respect of the reinsurance of a risk under a policy described in paragraph (a) of the description of D, and a policy in respect of insurance described in paragraph (b) or (c) of the description of D.