Prudential Regulation Authority Rulebook

4.1

1. (1) Subject to (2) and (3), a firm must determine the amount of the mathematical reserves separately for each contract of long-term insurance.
2. (2) Approximations or generalisations may be made:
1. (a) in the case of non-attributable expenses, in relation to a group of contracts with the same or similar expense risk characteristics, provided that the mathematical reserves in respect of such expenses established by the firm in relation to that group of contracts have a minimum value of at least zero; and
2. (b) in any other case, where they are likely to provide the same, or a higher, result than a determination made in accordance with (1).
3. (3) A firm must set up additional mathematical reserves on an aggregated basis for general risks that are not specific to individual contracts.