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EZ 58: Expected death strain formula (life): when partial reinsurance exists
or “Adjusting life insurance calculations when partial reinsurance is involved”
You could also call this:

“Explanation of funds set aside by life insurance companies”

When you hear about ‘actuarial reserves’, it means the money that a life insurance company sets aside. They calculate this amount using a special method described in another part of the law.

There’s also something called ‘closing actuarial reserves for active annuities’. This is important when figuring out taxes for annuities, which are regular payments made to someone. Here’s how it works: At the start of the year, the insurance company looks at how much money they’ve set aside for a policy. If the person getting the annuity dies during that year, this amount becomes the ‘closing actuarial reserves for active annuities’. But if the person is still alive at the end of the year, this amount becomes zero.

Lastly, when the law talks about actuarial reserves for a life insurer at any time, it simply means whatever amount of reserves the insurer has at that exact moment.

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Next up: EZ 60: Actuarial reserves: calculation

or “How life insurance companies calculate money set aside for future payouts”
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Part E Timing and quantifying rules
Terminating provisions: Actuarial reserves

EZ 59Meaning of actuarial reserves

  1. For the purposes of sections EZ 53 to EZ 58, actuarial reserves means a life insurer’s reserves as calculated under section EZ 60.

  2. For the purposes of the item closing actuarial reserves in section EY 31(3) (Annuities), closing actuarial reserves (active annuities) means a life insurer's opening actuarial reserves under section EZ 54(6) for a life insurance policy, to the extent to which an annuity is being paid under the policy where the life insured dies in the income year for which the formula in section EY 31 is applied. Where the life insured survives to the end of that income year, the closing actuarial reserves (active annuities) is zero.

  3. Actuarial reserves, for a life insurer at any time, means the life insurer’s actuarial reserves at that time.

Notes
  • Section EZ 59: inserted, on , by section 199(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).