Instructions for completion of Form 52
Instructions for completion of Forms 51, 52, 53 and 54
1. Separate valuation summaries must be completed in respect of each separate fund or part of a fund for which a surplus is determined.
2. Information must be shown separately for each type of insurance business for each of the following:
(a) UK life;
(b) UK pension; and
Overseas business may, at the discretion of the insurer, be subdivided by state or territory.
3. The information must be shown separately for each source of business for each type of insurance business in the sequence specified below:
(a) gross insurance business;
(b) reinsurance ceded which is external to the insurance group; and
(c) reinsurance ceded which is to another member of the insurance group.
4. Subject to 11, information must be further divided by product code. ‘Product description’ in column 2 is the narrative description beside the number of the product code in the table in paragraph 3 of the Instructions for completion of Form 47 but may, at the discretion of the insurer, include the brand name. Subdivision of pensions business into increments and DWP National Insurance rebates is not required in Forms 51-54. Subdivision of annuities in payment into those arising from bulk transfers is not required in Forms 51-54, i.e. new business reported under codes 401 and 906 is reported under codes 400, 405 and 905 for in force business.
5. There may be more than one line for the same product code within a type and source of business to identify specific brands or policies with special features.
6. For direct individual policies, column 3 is the number of plans, i.e. eliminating the effect of multiple policies being issued as part of the same premium, identifiable increments and rider benefits. A policy holder who holds plans of the same product code taken out at different dates will contribute to column 3 for each such plan. For direct group scheme business, where the insurer has records of benefits at member level, column 3 is the number of members. For group scheme business, where the insurer has no records of benefits at member level, column 3 must be zero. For business without such records, the number of group schemes, analysed by the product code, must be set out in a supplementary note (codes 5101-5401). Details of approximations made in estimating the number of policyholders from the number of contracts must be given in a supplementary note (codes 5102-5402). For reinsurance accepted and reinsurance ceded column 3 is nil.
7. A plan must only contribute once to column 3 in Forms 51-54. The total of premiums for the plan shown in Forms 51-54 must equal the total premiums for the plan. For plans where the policyholder has the option for premiums to be invested in both with-profits and internal linked funds, the preferred presentation is as follows. If all the premiums are invested in with-profits units and the plan is written in the with-profits fund the contribution to column 3 should be shown in Form 52, otherwise the contribution to column 3 should be shown in Form 53. The entry in column 3 is for the investment element of the plan, and the entry in column 3 for protection rider benefits is nil. The annual premium in column 5 should be allocated between Form 52 and Form 53 based on the current premium allocation percentages. If all the premiums are invested in with-profits units and the plan is written in the with-profits fund the protection rider benefits should be shown in Form 52, otherwise the protection rider benefits should be shown in Form 53. Where the protection rider benefits are paid for by cancelling units the entry in column 5 for the riders should be shown as nil, and all the premiums for the plan should be reported in column 5 under the product code(s) for the investment element.
8. Columns 6, 7 and 8 must be left blank on Form 51. The purpose of the unused columns in Form 51 is the standardisation of column headings in Forms 51-54.
9. For non-linked contracts the amount of benefit in column 4 is the current death benefit (excluding any interim and terminal bonus) for assurances, the amount payable on claim for stand-alone critical illness, the annual amount of annuity for deferred annuities and annuities in payment and the annual amount of benefit for income protection and waiver of premium. For linked long-term contracts including life assurance, column 4 must be the current amount payable on death.
10. For property linked long-term contracts, unitised with-profits policies and deposit administration contracts, column 6 must be the current value of the units or fund as presented to the policy holder. Forindex linked contracts column 6 must be the index linked liability with no allowance for discounting. The amount in column 7 is the amount in column 6 allowing for any discounting in the valuation. The amount in column 9 is the sum of columns 7 and 8.
11. Notwithstanding 4, where neither the gross mathematical reserves nor the gross annual premiums with respect to products with the same product code exceed the lesser of £10m and 1% of the total gross mathematical reserves, the products may be entered as the appropriate miscellaneous product code in column 1 and 2. The test of whether the appropriate miscellaneous product code may be used must be carried out at firm level combining all subfunds. The product code for reinsurance must correspond to the product code for the related gross business.
12. Where a product does not appear to fit into any other product code, the miscellaneous product code can be used. Details must be disclosed in a supplementary note (codes 5103-5403) if the amount of business for the product exceeds the threshold in instruction 11.
13. Details must be given in a supplementary note (codes 5104-5404) of approximations used to apportion between product codes.
14. Reserves for non-attributable expenses must be included with the appropriate additional reserves product code, i.e. they are not allocated back to and included with reserves at product code level.