Where blocks of business are transferred between insurance companies INSPRU 1.4.32 onwards specifies which premiums and claims are taken into account in calculating the equalisation reserve of the transferor, and which are taken account into account by the transferee. These rules apply only to transfers under Part 7 FSMA 2000, or to transfers that take place by novation with the agreement of the policy holders. They do not apply to portfolio reinsurance arrangements. Equalisation reserve calculations will follow whatever effect the portfolio reinsurance arrangements have on the figures for premiums and claims for the companies concerned.

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