LLM3050 - Reinsurance to close (RITC) and technical provisions: section 107 FA2000: adaptations for Lloyd's members: changes in a member바카라 사이트™s share of the syndicate바카라 사이트™s business
Syndicates in most cases pay a reinsurance to close (RITC) premium to the same numbered syndicate for the next year of account. Where the member바카라 사이트™s share of the syndicate바카라 사이트™s business increases or decreases, the member may receive an amount different from the amount they paid.
Member increasing their share of the syndicate바카라 사이트™s business
Where a member increases their share of a syndicate바카라 사이트™s business, the amount of the RITC premium received will exceed the amount of the premium paid by that member.
The excess received by a member over that paid by the same member represents new liabilities taken over. For the purposes of the calculation required by FA00/S107, those liabilities taken over are not referable to their year of origin, but to the year in which they become a liability for that member.
Members joining a syndicate
For a member that is new to a syndicate, the entire RITC premium received represents new liabilities for that member.
Member reducing their share of the syndicate바카라 사이트™s business
For a member reducing their share of the syndicate바카라 사이트™s business, part of the RITC premium paid will be paid to a third party. This part therefore represents not a provision, but the cost of settling liabilities. It is therefore treated as such.
Members leaving a syndicate
For a member that leaves a syndicate, the entire RITC premium paid represents the cost of settling liabilities.
Examples
Some straightforward examples of increases and decreases in a member바카라 사이트™s share of a syndicate바카라 사이트™s business are at LLM3060. They set out how the original provisions are determined for the purposes of the calculations.
The effect on subsequent years바카라 사이트™ RITC and claims is explained in examples at LLM3130 onwards.