Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 713 - Rules for particular kinds of entities  

Subdivision 713-M - General insurance companies  

Liabilities and reserves of general insurance companies joining and leaving consolidated groups

SECTION 713-725   Treatment of certain assets and liabilities of general insurance companies  

713-725(1)    
This section applies if a *general insurance company becomes or ceases to be a *subsidiary member of a *consolidated group.

713-725(2)    
If the *general insurance company becomes a *subsidiary member of the group:

(a)    in working out the step 2 amount for the purposes of the table in section 705-60 , reduce that amount by the sum of the amount of each thing mentioned in subsection (4) ; and

(b)    in working out the *tax cost setting amount of a thing mentioned in subsection (4) for the purposes of section 705-35 , treat the *market value of the thing as zero.

713-725(3)    
If the *general insurance company ceases to be a *subsidiary member of the group:

(a)    in working out the step 4 amount for the purposes of the table in section 711-20 , reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and

(b)    for the purposes of section 711-25 , treat the *terminating value of a thing mentioned in subsection (4) as zero.

713-725(4)    

The things are the *general insurance company ' s:

(a)    *assets for insurance acquisition cash flows to the extent that they are used to measure the company ' s adjusted *liability for remaining coverage; and

(b)    deferred reinsurance expenses to the extent that they are used to measure the company ' s adjusted liability for remaining coverage; and

(c)    recoveries receivable, or potential recoveries, measured under the *applicable insurance contracts standard to the extent that they relate to insurance contracts or reinsurance contracts; and

(d)    claims handling costs that are neither attached to, nor directly attributable to, a particular claim, to the extent that these costs are used to measure the company ' s adjusted *liability for incurred claims; and

(e)    loss components and loss-recovery components of onerous contracts to the extent that they are used to measure the company ' s adjusted liability for remaining coverage.