Calculate Deposit, Interest, Tax on Interest

If you want the SICS to calculate the Deposit, Interest and Tax on Interest, the conditions must be defined. Refer to Handle Deposit Conditions. Conditions may be equal for all Retrocessionaire’s Participation’s (ORP’s)or one or more of the ORP’smay have special Deposit, Interest and/or Tax on Interest conditions entered.

Calculate Premium Deposit #

Premium Deposit, if defined, is calculated according to the Premium Deposit regulation defined on the condition. The Premium Deposit cannot be calculated more frequent than the Accounts. The Premium Deposit retained in one Accounting Period can be released in the next Accounting Period or in the same Accounting Period in the next Accounting Year. Depending on the system parameter Automatic Detail Pairing of ORP Deposit being active or not, an automatic detail pairing between the Deposit Retained in previous Account and the Deposit Released in current Account is created or not. For more information, refer to description of the system parameter.

Deposit, Interest and Tax on Interest are calculated per Insured Period. Depending on the value selected in the field Type of Securities, the Deposit booking is affecting/is not affecting the liquid balance. Refer to section Type of Securities for more information.

Note! The Order Status selected on the Retrocession Calculation order has impact on the Deposit Released when Deposit Released = Next Account. If you run the same Account number for a second time, the Deposit Retained in previous run (with the same Account number) is Released unless the Order Status of the previous Account is Final. If Order Status of previous Account is Final, only a Deposit Retained calculated of the additional basis amount (Original Premium Deposit, Premium, Portfolio, Reserve), if any, is booked.

Available calculation methods are:

None #

No calculation of Premium Deposit is performed

Percent of Original #

Below description is based on the field Release in Next Account being selected.

Premium Deposit Retained

Cumulated bookings for all Accounting Years per Insured Period, with Entry Codes within the Entry Code Sub Category Premium Deposit are multiplied with the Share of the ORP and the percentage entered on the Premium Deposit condition. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code from the system parameter Entry Code Usage, Calculation Premium Deposit Retained defined by your System Administrator. This calculation will continue for all Accounts until you run the last Account of the Insured Period (according to the Deposit regulation). No Premium Deposit Retained is calculated in the last Account.

If the field ‘Last Regulation’ on the Premium Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Premium Deposit Retained. System will continue releasing Premium Deposit until all are released (or until Last Account).

Premium Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Premium Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Premium Deposit Released defined by your System Administrator.

Note! If there is nonew booking with Entry Codes within the Entry Code Sub Category Premium Deposit, the Premium Deposit Retained and the Premium Deposit Released is booked with the same amount as the one retained in the previous Account.

Which Entry Codes are part of the Entry Code Sub Category Premium Deposit is decided by your System Administrator.

Example:

ORP Share = 10%
Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Premium Deposit = 90% of Original

*) Entry Codes in Entry Code Sub Category Premium Deposit

**) (50.000 x 10% x 90%) + (100.000 x 10% x 90%) = 13.500

***) Amount booked as Premium Deposit Retained in 1^stAccounting period is released in the next Accounting period

****) (50.000 x 10% x 90%) + (100.000 x 10% x 90%)+ (40.000 x 10% x 90%) + (110.000 x 10% x 90%) + (-50.000 x 10% x 90%)) = 22.500

Percent of Premium #

Below description is based on the field Release in Next Account being selected.

Premium Deposit Retained

All cumulated Premium bookings per Insured Period according to the Entry Code Group selected as Premium Basis on the Premium Deposit condition and within the Accounting Year are multiplied with the Share of the ORP and the Premium Deposit percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Deposit Retained by your System Administrator.

The calculation of the Premium Deposit Retained will continue for all Accounts until you run the last Account of the Insured Period (according to the Deposit regulation). When you run the last Account of the Insured Period only a Premium Deposit Released is booked on the ORP Business Ledger As Booking.

If the field ‘Last Regulation’ on the Premium Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Premium Deposit Retained. System will continue releasing Premium Deposit until all are released (or until Last Account).

Premium Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Premium Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Premium Deposit Released.

Which Premium Entry Codes are part of the Entry Code Group within the Entry Code Group Category Subject Premium Income Proportional is decided by your System Administrator.

Example 1:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
ORP Share = 10%Premium Deposit = 40% of Premium

*) Entry Codes in Entry Code Sub Category Premium

**) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Subject Premium Income, Proportional (In this example 10 and PREM). ((-50.000 x 10% x 40% ) + (-200.000 x 10% x 40%)) x-1 = 10.000

***) Amount booked as Premium Deposit Retained in 1^stAccounting period is released in the next Accounting period

****) ((-50.000 x 10% x 40% ) + (-200.000 x 10% x 40%) + (-150.000 x 10% x 40%)) x-1 = 16.000

Percent of Premium Portfolio #

This calculation method is relevant when the Accounting Basis is Clean Cut and is dependent on the Premium Portfolio condition being entered.

Below description is based on the field Release in Next Account being selected.

Premium Deposit Retained

All Premium Portfolio bookings according to the Entry Code Sub Category Premium Portfolio Entry are multiplied with the Share of the ORP and the Premium Deposit percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Deposit Retained by your System Administrator. The Premium Portfolio Entry (booked on the next open Insured Period) is calculated when you run the last Account of the Insured Period. The first calculation of the Premium Deposit is performed when you run the last Account of the first Insured Period provided that the ORP is renewed to next Insured Period. Calculation is according to the following;

• A Premium Portfolio Withdrawal is booked with an Insured Period equal to the Year in the Accounting Year of the Account ordered.
• A Premium Portfolio Entry is booked on the next open Insured Period compared to the Portfolio Withdrawal.
• A Premium Deposit Retained is booked with an Insured Period equal to the Insured Period of the Premium Portfolio Entry booking. Premium Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Premium Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Premium Deposit Released. If the Deposit regulation is more frequent than the Premium Portfolio calculation (yearly), then the Premium Deposit Retained/Released is booked with the same amount (as the Deposit Retained in previous Accounting Period) until the calculation of the Premium Portfolio is performed. If the Premium Deposit is regulated yearly, the Premium Deposit Released is booked when calculating the last Account of the Insured Period. If the ORP has been renewed and the Portfolio Entry is calculated for the next Insured Period, also a Premium Deposit Retained is booked.

Example:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
ORP Share = 10%
Premium Portfolio Withdrawal/Entry = 100% of Original
Premium Deposit = 50% of Premium Portfolio, Half-yearly

*) Entry Code in Entry Code Sub Category Premium

**) Entry Codes in Entry Code Sub Category Premium Portfolio Withdrawal (14) and Premium Portfolio Entry (13)

***) The Premium Portfolio Entry (13) and the Premium Deposit retained (51) are booked on the next open Insured Period compared to the other items booked in the 2^nd Half-year 2003 Account.

****) Premium Deposit in 1^st Half-year 2003 Account is released and retained with the same amount as the Premium Deposit Retained in previous Accounting Period as no Premium Portfolio is booked in the 1^st Half-Year 2003 Account.

Percent of Premium Reserve #

This calculation method is relevant when the Accounting Basis is Run-off and is dependent on the Premium Reserve condition being entered.

Below description is based on the field Release in Next Account being selected.

Premium Deposit Retained

All cumulated Premium Reserve bookings, per Insured Period, according to the Entry Code Sub Category Original Premium Reserve are multiplied with the Share of the ORP and the Premium Deposit percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Deposit Retained by your System Administrator.

If the field ‘Last Regulation’ on the Premium Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Premium Deposit Retained. System will continue releasing Premium Deposit until all are released (or until Last Account).

Premium Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Premium Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Premium Deposit Released. If the Deposit regulation is more frequent than the Premium Reserve calculation, then the Premium Deposit Retained/Released is booked with the same amount (as the Premium Deposit Retained in previous Accounting Period) until the calculation of the Premium Reserve is performed.

Example 1:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
ORP Share = 10%
Premium Reserve = 100% of original, Half-yearly
Premium Deposit =50% of Reserve, Half-yearly

*) Entry Code in Entry Code Sub Category Original Premium Reserve

**) Amount booked as Premium Deposit Retained in 1^stAccounting period is released in the next Accounting period

***) The basis for the Premium Deposit Retained is the cumulated Original Premium Reserve of the Insured Period.

2^nd Account, Acct Year 1, IP 1; (100.000 x 10% x 50%) + (80.000 x 10% x 50%) = 9.000

Percent Table #

Premium Deposit Retained

This calculation method is relevant when the Accounting Basis is Run-off. All Premium bookings according to the Entry Code Group selected as Premium Basis on the Premium Deposit condition are multiplied with the Share of the ORP and the Premium Deposit percentage. The Premium Deposit percentage is according to the definition of the selected table. In the table, different Percent Values may be defined for the Year Numbers (Accounting Years) of the Insured Period. Calculation of the Premium Deposit is according to the following formulas;

‘x’% of Premium booked in each Accounting Period of current Accounting Year ‘n’ if Insured Period ‘n’

‘x’% of Premiu m booked in each Accounting Period of current Accounting Year ‘n’ and previous Accounting Year if Insured Period ‘n-1’

‘x’% of Premium booked in each Accounting Period of current Accounting Year ‘n’ and previous Accounting Years if Insured Period ‘n-2’

‘x’% of Premium booked in each Accounting Period of current Accounting Year ‘n’ and previous Accounting Years if Insured Period ‘n-3’

…. continues according to the number of years defined in the table

The calculation is on a cumulative basis. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Deposit Retained by your System Administrator.

Premium Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Premium Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Premium Deposit Released.

Which Entry Codes are parts of the Entry Code Group within the Entry Code Group Category Subject Premium Income, Proportional is decided by your System Administrator.

Which Percent Values are entered for the various Year Numbers in the System Parameter Percent Table is decided by your System Administrator.

Example:

Premium Deposit = Percent table
Cal. Frequency = Yearly

Percent Table

Example of Premium Deposit booked on the ORP Business Ledger, for one Insured Period

*) The Premium booked on the ORP Business Ledger As Booking . Premium notmarked with * ) are cumulated Premiums for previous Accounting Year(s) included in the Calculation of the Premium Deposit Retained amount. The Premium refers to the Entry Code Group selected on the Premium Deposit condition.

**) The total row shows the Premium Deposit amount booked on the ORP Business Ledger As Booking.

Percent of Combination #

Below description is based on the field Release in Next Account being selected.

Premium Deposit Retained

The calculation of the deposit when in Percent of Combination is calculated in two steps. First, all cumulated bookings (within the Accounting Year/Insured Period) according to the Entry Code Group selected as Premium Basis for the Calculation Method Percent of Combination are multiplied with the ORP share and the percentage defined for this calculation. Secondly, all cumulated bookings (within the Accounting Year/Insured Period) according to the Entry Code Group selected as Premium Basis for the Percent Combine are multiplied with the ORP share and the percentage defined for this calculation. The amount being the result of the second calculation is then deducted from the amount being the result of the first calculation and this (final) amount is the Premium Deposit Retained amount. The Premium Deposit Retained amount is booked on the ORP Business Ledger ‘as Booking’ with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Deposit Retained by your System Administrator.

The entry codes included in the basis for the Calculation Method Percent of Combination may for example be entry codes within the Entry Code Sub Categories Premium, Overriding Commission and Loss. The entry codes included in premium basis for the Percent Combine may for example be entry codes within the Entry Code Sub Category Premium.

The calculation of the Premium Deposit Retained will continue for all Accounts until you run the last Account of the Insured Period (according to the Deposit regulation). When you run the last Account of the Insured Period only a Premium Deposit Released is booked on the ORP Business Ledger As Booking.

If the field ‘Last Regulation’ on the Premium Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Premium Deposit Retained. System will continue releasing Premium Deposit until all are released (or until Last Account).

Premium Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Premium Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Premium Deposit Released.

Which Premium Entry Codes are part of the Entry Code Group within the Entry Code Group Category Subject Premium Income Proportional is decided by your System Administrator.

Example 1:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
ORP Share = 60%
Premium Deposit = 100% of (Premium + Deduction + Claim paid - Premium * percent of balance)
percent of balance = 5%
Overriding Commission = 10% of Premium VAT/WVAT = 6%

*) Entry Codes in Entry Code Sub Category Premium,Loss,Overriding Commission

**) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Subject Premium Income, Proportional.

In this example:

Premium Basis for temporary premium deposit retained is PREM, ClMP and OVER:

(-10.000 x 60%) + (-10.000 x 60% x 6%) + (10.000 x 60% x 6%) + (2.000 x 60%) + (10.000 x 60% x 10%) = -4.200

Premium Basis for balance deduction is PREM:

((-10.000 x 60% ) + (-10.000 x 60% x 6%) + (10.000 x 60% x 6%)) x 5% = -300

The actual premium deposit retained: (-4200 - (-300)) * -1 = 3.900

***) Amount booked as Premium Deposit Retained in 1^stAccounting period is released in the next Accounting period

****) ((-15.000 x 60% ) + (-15.000 x 60% x 6%) + (15.000 x 60% x 6%) - ((-15.000 x 60% ) + (-15.000 x 60% x 6%) + (15.000 x 60% x 6%) x 5%)) x -1 + 1^stAccounting period = 11.550

Release in same Account(ing Period) in Next Accounting Year #

Below description is based on the field Release in Same Account in Next Accounting Year being selected.

Premium Deposit Retained

This option is relevant when Accounting Basis is Run-off. Depending on the calculation method the _Premium Deposit,the_Premium, the Premium Reserve or the Combination of Premium, Deduction and Claim Paid booking per Insured Period is multiplied with the Share of the ORP and the Premium Deposit percentage. The basis amount is from the current Accounting Year/Period only. If the Premium Deposit regulation is not as frequent as the Account frequency, the basis amount is from the Accounting Periods matching the Premium Deposit regulation. The basis amount is not cumulated figures as when release in Next Account is selected.

Premium Deposit Released

The Premium Deposit Released is booked in the same Accounting Period as the Premium Deposit Retained, but in the next Accounting Year. This option is relevant for the following calculation methods;

Percent of Original

Percent of Premium

Percent of Premium Reserve

Percent of Combination

Example 1:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Account frequency = Half-yearly
Deposit regulation = Half-yearly
ORP Share = 10%
Premium Deposit = 40% of Premium

*) Entry Codes in Entry Code Sub Category Premium

**) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Entry Code Group Category Subject Premium Income, Proportional (In this example 10). (-250.000 x 10% x 40% ) x -1= 10.000

***) Amount booked as Premium Deposit Retained in 1^stAccount, Accounting Year 2002, is released in the same Account in the next Accounting Year (2003)

Example 2 - Account frequency different from Deposit regulation:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Account frequency = Quarterly
Deposit regulation = Half-yearly
ORP Share = 10%
Premium Deposit = 40% of Premium

*) Entry Codes in Entry Code Sub Category Premium

**) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Subject Premium Income, Proportional (In this example 10) ((-150.000 x 10% x 40%) + (-100.000 x 10% x 40%)) x -1= 10.000

***) Calculated of premium booked in 3^rd and 4^th quarter

****) Premium Deposit Retained in 2^nd Quarter 2002 Account is released in 2^nd Quarter 2003 Account

Example 3 - Percent of Combination:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Account frequency = Quarterly
Deposit regulation = Quarterly
ORP Share = 60%
Premium Deposit = 50% of (Premium + Deduction + Claim paid - Premium * percent of balance)
percent of balance = 5%
Overriding Commission = 10% of Premium

*) Entry Codes in Entry Code Sub Category Premium,Loss,Overriding Commission

**) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Subject Premium Income, Proportional.

In this example:

Premium Basis for temporary premium deposit retained is PREM, ClMP and OVER:

(-10.000 x 60%) + (-10.000 x 60% x 6%) + (10.000 x 60% x 6%) + (2.000 x 60%) + (10.000 x 60% x 10%) = -4200

Premium Basis for balance deduction is PREM:

((-10.000 x 60% ) + (-10.000 x 60% x 6%) + (10.000 x 60% x 6%)) x 5% = -300

The actual premium deposit retained: (-4200 - (-300)) * -1 * 50% = 1950

***) Calculated of premium deposit retained in 2nd, 3rd and 4th quarter

****) Amount booked as Premium Deposit Retained in 1^stAccount, Accounting Year 2018, is released in the same Account in the next Accounting Year (2019)

Release in Next Acct. Year with Transfer to next Ins Per #

The Premium Deposit Release in Next Acct. Year with Transfer to next Ins Per is a Deposit calculation based on certain Premium Deposit/Premium Portfolio conditions being defined. Total Premium Deposit retained during the Accounting Year is released when running the last Account of the Insured Period and retained when running the first Account of the next Insured Period. A Premium Portfolio Withdrawal is booked together with the Deposit balance released and a Portfolio Entry is booked with the Deposit balance retained on the next Insured Period (refer to below for further information of the Premium Deposit Retained/Released calculation).

The functionality applies only when Premium Accounting Basis is Clean Cut and when the Premium Portfolio Manage Portfolio based on Deposit is selected (Refer to chapter 06 Handle Conditions for more information of how to define the Premium Portfolio/Premium Deposit conditions). Available calculation method when Release in Next Acct. Year with Transfer to next Ins Per is selected, is Percent of Premium. The calculation is according to the following;

Premium Deposit Retained- is calculated as a percent of premium when running the Account according to the Deposit Regulation. The premium booked on the OCC ‘as Booking’ business ledger, is multiplied with the ORP share for the Insured Period. The result is multiplied with the Premium Deposit percentage;

• Premium OCC ‘as Booking’ IP1 (this account) x ORP share % IP1 x Premium Deposit % IP 1

This is repeated for all Accounts of the Accounting Year according to the Deposit Regulation.

Premium Deposit Released- a release of all the Premium Deposit Retained according to above is calculated in the last Account. Depending on the system parameter setting, the Premium Deposit Released is a total amount of all the Premium Deposit Retained amounts or separate amounts according to the Deposit Retained amounts.

The ORP Premium Deposit Released amounts are assigned the 1^stAccounting Period in the Accounting Year 2, Insured Period 1. Also a Premium Portfolio Withdrawal is booked (refer to chapter 13 Manage Premium Portfolio based on Deposit for more information).

When the OCC/ORP is renewed, the following ORP Premium Deposit bookings are made when running the 1^st Account for the next Insured Period;

Premium Deposit Retained- based on the OCC ‘as Booking’ Premium amount in previousInsured Period, adjusted by the ORP share in the renewed Insured Period multiplied with the Premium Deposit percentage from the renewed Insured Period;

• (OCC ‘as Booking’ Premium IP1 x ORP share % IP2 x Premium Deposit % IP2) x -1 Premium Deposit Released- representing a part of the Premium Deposit Retained in the same Account is calculated. This part is calculated as 25% when quarterly Deposit Regulation, 50% when Half-yearly Deposit Regulation etc.

The ORP Premium Deposit Retained/Released amounts are assigned the 1^stAccounting Period, Accounting Year 2, Insured Period 2. Also a Premium Portfolio Entry is booked (refer to chapter 13 Manage Premium Portfolio based on Deposit for more information).

Premium Deposit Retained - at the same time, Premium Deposit Retained is calculated as a percent of premium of the Insured Period 2.

Example

Accounts = quarterly

Deposit Regulation = quarterly

Manage Portfolio based on Deposit = selected

Premium Accounting Basis = Clean Cut

ORP share IP 1 = 100%

ORP share IP 2 =75%

Premium Deposit = 33.33% of Premium

Premium Portfolio = 33.33% of Premium

Premium 100% = -1.000 in each quarter 1^st to 4^th quarters year 1

Premium 100% = -2.000 in each quarter 1^st to 4^th quarters year 2

ORP 1

(*) The Accounting Year assigned to the Premium Deposit Released detail is Accounting Year 2, but Insured Period 1. Booked when running the Retrocession Calculation Order for the 4th quarter Account, Insured Period 1.

( **) The Accounting Year assigned to the Premium Deposit Retained detail is Accounting Year 2, Insured Period 2. Booked when running the Retrocession Calculation Order for the 1st quarter Account, Insured Period 2. This amount is adjusted for the ORP share of the Insured Period 2 (75%).

**( *) Calculated as Deposit Retained total amount 1.000/4 x -1. (Divided by 4 because of quarterly regulations)

Type of Securities

When Type of Securities is Cash, the Premium Deposit Retained and the Premium Deposit Released are booked with Entry Codes within the Entry Code Sub Category Premium Deposit(Entry Code Category Deposit). Which Entry Codes are selected are according to the system parameter Entry Code Usage, Calculations Premium Deposit Retained and Premium Deposit Released defined by your System Administrator.

When Type of Securities is different fromCash, the Premium Deposit Retained and the Premium Deposit Released are booked with Entry Codes within the Entry Code Sub Category Non Cash Premium Deposits (Entry Code Category Non-Liquid Deposits). Which Entry Codes are selected are according to the system parameter Entry Code Usage, Calculations Non Cash Premium Deposit Retained and Non Cash Premium Deposit Released defined by your System Administrator.

Freeze Deposit Calculation

When the Freeze Deposit Calculation is selected, the Premium Deposit Balance at the time the selection was made, is retained and released in Each Account (according to Deposit Regulation) until the field is cleared. New bookings, which normally will have an impact on the Premium Deposit basis, will notchange the Premium Deposit Retained/Released amount until the field is cleared. Interest and Tax on Interest amounts, if conditions apply, are calculated based on the unchanged deposit amounts.

This option is only valid for calculation methods

Percent of Original Percent of Reserve.

Example:
ORP Share = 10%
Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Premium Deposit = 100% of Original

*) Entry Codes in Entry Code Sub Category Premium Deposit

**) Premium Deposit Retained and Released booked with the same amount as Freeze Deposit Calculation is selected on Premium Deposit condition.

***) The basis for the calculation is cumulated figures for IP 2002

Calculate Deposits at cancellation

When the Calculate Deposits at cancellation is selected, no Deposit is calculated for the ORP until a Definite Cancellation date is entered (refer to Partners tab on ORP). This option is available when Accounting Basis is ‘Run-off’ only.

Calculate Interest on Premium Deposit #

Interest on Premium Deposit can be defined and calculated only when Type of Securities is Cash . The Interest on the Premium Deposit can be calculated of Premium Deposit Released amount or of Premium Deposit Balance amount. If Interest on Premium Deposit is to be calculated of the Premium Deposit balance, Interest can be calculated in each Account or in the last Account only. The following Interest Type is available:

None #

No Premium Deposit Interest is calculated. Refer to Original.

Original #

To have the ‘original’ Interest on Premium Deposit booked on the ORP Business Ledger As Booking, an Entry Code Transformation Term has to be selected on the OCC’s Administration Condition Main Section/Sub Section. The Entry Code Transformation Term selected must be defined to transfer the Interest defined within the Entry Code Category Non-Technical to a corresponding Entry Code Sub-Category within the Entry Code Category Technical. Interest in this Entry Code Sub- Category is booked in each Account independent of the Premium Deposit Regulation and the Interest conditions.

If the flag Allow in Retrocession Calculation is selected for the Interest on Premium Deposit Entry Code, the original Interest on Premium Deposit booked on the OCC ‘as Original’business ledger will be retroceded to the OCC ‘as Booking’ and booked on the ORP business ledger ‘as Booking’ according to the Deposit Regulation. In this case, no Entry Code Transformation Term is required. The Entry Code assigned to the booking is according to the result Entry Code defined for the calculation, refer to system parameter Accounting/Entry Code/Retrocession (Estimation) Accounting Proportional Treaty.

Below description is based on the following fields being selected;
Interest Type Original
Interest Calculation Independent of Regulation

The Interest calculation is performed whenever Interest is booked on the source business and the Retrocession Calculation Order is run, independent of the Premium Deposit regulation. The Interest Calculation Independent of Regulation may be defined only when Interest Type is Original. Also Tax on Interest on Premium Deposit is calculated if booked on the source business.

Note: The above calculation is based on the flag Allow in Retrocession Calculation on the Interest/Tax on Interest Entry Codes being selected.

Percent #

A) Below description is based on the following fields being selected;

Interest Calculation Deposit Released Interest on Deposit % Before Tax Release in Next Account The Premium Deposit Released amount is multiplied with the Interest of Deposit percentage and divided by the Deposit Regulation according to following rules;

If Regulation is Month(s) - divide by 12

If Regulation is Quarter(s) - divide by 4

If Regulation is Trimester(s) - divide by 3

If Regulation is Half-year(s) - divide by 2

If Regulation is Year(s) - divide by 1

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Premium Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Entry Code defined for Calculation Interest on Premium Deposit = ‘42’
Interest on Premium Deposit = 5% (before Tax)
Deposit Regulation = Quarter(s)
Premium Deposit = 50% of Premium

*) Calculated as (-10.000 x 5%/4) = -125

**) Calculated as (-30.000 x 5%/4) = -375

B) Below description is based on the following fields being selected;

Interest Calculation Deposit Released Interest on Deposit % After Tax Release in Next Account The Interest on Premium Deposit is calculated according to the following formulas;

A = Premium Deposit Released Amount
I = Premium Deposit Interest %
T = Tax on Interest %
N = Number according to frequency
Tax for one year = TY = (A x I x T) x -1 / (1-T)
Tax for one half-year = THY = TY / 2
Interest for one year = IY = A x I - TY
Interest for one half-year = IHY = IY / 2

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Premium Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Premium Deposit Released = ‘52’
Entry Code defined for Calculation Interest on Premium Deposit = ‘42’
Entry Code defined for Calculation Tax on Interest = ‘44’
Interest on Premium Deposit = 5% (**After Tax)
** Tax on Interest = 10%
Deposit Regulation = Half-year(s)

*) Calculated as (-18.000 x 5% x 10%)x-1 / (1-10%) = 100 100/2 = 50

**) Calculated as (-18.000 x 5%) - 100 = -1.000 -1.000/2 = -500

C) Below description is based on the following fields being selected;

Interest Calculation Deposit Balance Interest Calculation Each Account Deposit released Same Account in Next Accounting Year The Premium Deposit Balance amount is multiplied with the Interest of Deposit percentage and divided by a number according to the Account Frequency.

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Premium Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Entry Code defined for Calculation Interest on Premium Deposit = ‘42’
Interest on Premium Deposit = 5% (before Tax)
Deposit Regulation = Quarter(s)
Premium Deposit = 50% of Premium

*) Calculated as (-10.000 x 5%/4) = -125

**) Calculated as (-10.000 x 5%/4) + (-20.000 x 5%/4) = -375

D) Below description is based on the following fields being selected;

• Interest Calculation Deposit Balance
• Interest Calculation Last Account
• Premium Deposit Release in Same Account in Next Accounting Year

The Interest calculation is performed in the last Account only. The Premium Deposit Balance status after each Account from the current Accounting Year is multiplied with the Interest of Deposit percentage and divided by a number according to the Account Frequency.

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Premium Deposit by your System Administrator.

Example of ORP Business Ledger:
Entry Code defined for Calculation Premium Deposit Retained = ‘51’
Entry Code defined for Calculation Premium Deposit Released = ‘52’
Entry Code defined for Calculation Interest on Premium Deposit = ‘42’
Interest on Premium Deposit = 5% (before Tax)
Deposit Regulation = Quarter(s)
Premium Deposit = 50% of Premium

*) Calculated as; (-10.000 x 5%/4) = -125 +

((-10.000 x 5%/4) + (-20.000 x 5%/4))= -375 +

((-10.000 x 5%/4) + (-20.000 x 5%/4) + (-5.000 x 5%/4))= -437,50

= Interest booked in last Account**= -937,50**

E) Below description is based on the following fields being selected;

• Interest Calculation Deposit Balance
• Interest Calculation Last Account
• Premium Deposit Release in Next Acct. Year with Transfer to next Ins Per
• is selected

The Interest calculation is performed in the last Account only and is calculated of the Premium Deposit Balance status after the last Account of the Insured Period 1.

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation

Interest on Premium Deposit by your System Administrator.

Formula;

Interest = ((PDEP 1st Q prev year) + (2xPDEP 2nd Q prev year) + (3xPDEP 3rd Q prev year) + (4xPDEP 4th Q prev year) +
(3xPDEP 1st Q current year) + (2xPDEP 2nd Q current year) + (PDEP 3rd Q current year)) / 4 x interest rate

Explanation;

PDEP 1st Q prev year = Premium Deposit retained in 1st Quarter of previous year
2xPDEP 2nd Q prev year = Premium Deposit retained in 2nd Quarter of previous year multiplied by 2
3xPDEP 3rd Q prev year = Premium Deposit retained in 3rd Quarter of previous year multiplied by 3
4xPDEP 4th Q prev year = Premium Deposit retained in 4th Quarter of previous year multiplied by 4
3xPDEP 1st Q current year = Premium Deposit retained in 1st Quarter of current year multiplied by 3
2xPDEP 2nd Q current year = Premium Deposit retained in 2nd Quarter of current year multiplied by 2
PDEP 3rd Q current year = Premium Deposit retained in 3rd Quarter of current year

Sum of all Premium Deposit Retained amounts according to above is divided by number of Premium Deposit regulations (monthly - means 12, quarterly - means ‘4’, trimester - means ‘3’, half-year means ‘2’ and yearly means'1’).

Previous year - means previous Accounting Year/Underwriting Year

Current year - means current Accounting Year/Underwriting Year

If this Account is for the first Insured Period, then no Interest is calculated for the previous year, just for the current year.

Example of ORP Business Ledger:

Entry Code defined for Premium = ‘10’

Entry Code defined for Calculation Premium Deposit Retained = ‘51’

Entry Code defined for Calculation Interest on Premium Deposit = ‘42’

Interest on Premium Deposit = 5% (before Tax)

Deposit Regulation = Quarter(s)

Premium Deposit = 33,33% of Premium

(3x333,33 1st Q current year) + (2x333,33 2nd Q current year) + (333,33 3rd Q current year)) / 4 x 5% = -25

Calculate Tax on Interest on Premium Deposit #

Tax on Interest can be defined and calculated only when Type of Securities is Cash. The following Interest Type is available:

None #

No Tax on Interest is calculated. Refer to Original.

Original #

To have the ‘original’ Tax on Interest booked on the ORP Business Ledger As Booking, an Entry Code Transformation Term has to be selected on the OCC’s Administration Condition Main Section/Sub Section. The Entry Code Transformation Term selected must be defined to transfer the Tax on Interest defined within the Entry Code Category Non-Technical to a corresponding Entry Code Sub-Category within the Entry Code Category Technical. Tax on Interest Type in this Entry Code Sub-Category is booked in each Account independent of the Premium Deposit Regulation and the Tax on Interest conditions.

If the flag Allow in Retrocession Calculation is selected for the Tax on Interest on Premium Deposit Entry Code, the original Tax on Interest on Premium Deposit booked on the OCC ‘as Original’business ledger will be retroceded to the OCC ‘as Booking’and booked on the ORP business ledger ‘as Booking’ according to the Deposit Regulation. In this case, no Entry Code Transformation Term is required. The Entry Code assigned to the booking is according to the result Entry Code defined for the calculation, refer to system parameter Accounting/Entry Code/Retrocession (Estimation) Accounting Proportional Treaty.

Percent #

Below description is based on the field Interest Type Percent being selected.

The Interest on Premium Deposit amount booked on the ORP Business Ledger As Booking is multiplied with the Tax on Interest percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Tax on Interest on Premium Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Interest on Premium Deposit = ‘42’
Entry Code defined for Calculation Tax on Interest on Premium Deposit = ‘44’
Tax on Interest = 10%

*) Calculated as (-125 x 10%) x -1 = 12,5

Calculate Loss Deposit #

Loss Deposit, if defined, is calculated according to the Loss Deposit regulation defined on the conditions. The Loss Deposit can not be calculated more frequent than the Accounts. The Loss Deposit retained in one Accounting Period is released in the next Accounting Period or in the same Accounting Period in the next Accounting Year. Depending on the system parameter Automatic Detail Pairing of OPR Deposit being active or not, an automatic detail pairing between the Deposit Retained in previous Account and the Deposit Released in current Account is created or not. For more information, refer to description of the system parameter.

Deposit, Interest and Tax on Interest are calculated per Insured Period. Depending on the value selected in the field Type of Securities, the Deposit bookings is affecting/is notaffecting the liquid balance. Refer to section Type of Securities for more information.

Note! The Order Status selected on the Retrocession Calculation order has impact on the Deposit Released when Deposit Released = Next Account. If you run the same Account number for a second time, the Deposit Retained in previous run (with the same Account number) is Released unless the Order Status of the previous Account is Final. If Order Status of previous Account is Final, only a Deposit Retained calculated of the additional basis amount (Original Loss Deposit, Portfolio, Reserve), if any, is booked.

Available calculation methods are;

Percent of Original #

Below description is based on the field Release in Next Account being selected.

Loss Deposit Retained

Cumulated bookings for allAccounting Years with Entry Codes within the Entry Code Sub Category Loss Deposit are multiplied with the Share of the ORP and the percentage entered on the Loss Deposit condition. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code from the system parameter Entry Code Usage, Calculation Loss Deposit Retained defined by your System Administrator. This calculation will continue for all Accounts until you run the last Account of the Insured Period (according to the Deposit regulation). No Loss Deposit Retained is calculated in the last Account.

If the field ‘Last Regulation’ on the Loss Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Loss Deposit Retained. System will continue releasing Loss Deposit until all are released (or until Last Account).

Loss Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Loss Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Loss Deposit Released defined by your System Administrator.

Note! If there is nonew booking with Entry Codes within the Entry Code Sub Category Loss Deposit, the Loss Deposit Retained and Released is booked with the same amount as the one retained in the previous Account.

Which Entry Codes are part of the Entry Code Sub Category Loss Deposit is decided by your System Administrator.

Example:

ORP Share = 10%
Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Loss Deposit = 90% of Original

*) Entry Codes in Entry Code Sub Category Loss Deposit

**) (50.000 x 10% x 90%) + (100.000 x 10% x 90%) = 13.500

***) Amount booked as Loss Deposit Retained in 1^st Accounting period is released in the next Accounting period

****) (50.000 x 10% x 90%) + (100.000 x 10% x 90%)+ (40.000 x 10% x 90%) + (110.000 x 10% x 90%) + (-50.000 x 10% x 90%) = 22.500

Percent of Loss Portfolio #

This calculation method is relevant when the Accounting Basis is Clean Cut and is dependent on the Loss Portfolio condition being entered.

Loss Deposit Retained

Below description is based on the field Release in Next Account being selected.

All Loss Portfolio bookings according to the Entry Code Sub Category Loss Portfolio Entry are multiplied with the Share of the RP and the Loss Deposit percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Loss Deposit Retained by your System Administrator. The Loss Portfolio Entry (booked on the next open Insured Period) is calculated when you run the last Account of the Insured Period. The first calculation of the Loss Deposit is performed when you run the last Account of the first Insured Period provided that the ORPis renewed to next Insured Period. Calculation is according to the following:

1. A Loss Portfolio Withdrawal is booked with an Insured Period equal to the Year in the Accounting Year of the Account ordered.
2. A Loss Portfolio Entry is booked on the next open Insured Period compared to the Portfolio Withdrawal.
3. A Loss Deposit Retained is booked with an Insured Period equal to the Insured Period of the Loss Portfolio Entry booking.

Loss Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Loss Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Loss Deposit Released defined by your System Administrator. If the Deposit regulation is more frequent than the Loss Portfolio calculation (yearly), then the Loss Deposit Retained/Released is booked with the same amount as the Deposit Retained (in previous Accounting Period) until the calculation of the Loss Portfolio is performed. If the Loss Deposit is regulated yearly, the Loss Deposit Released is booked when calculating the last Account of the Insured Period. If the RPhas been renewed and the Portfolio Entry is calculated for the next Insured Period, also a Loss Deposit Retained is booked.

Example:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
ORP Share = 10%
Loss Portfolio Withdrawal/Entry = 100% of Original
Loss Deposit = 50% of Loss Portfolio, Half-yearly

*) Entry Code in Entry Code Sub Category Premium

**) Entry Codes in Entry Code Sub Category Loss Portfolio Withdrawal (36) and Loss Portfolio Entry (35)

***) The Loss Portfolio Entry (35) and the Loss Deposit retained (61) are booked on the next open Insured Period compared to the other items booked in the Account.

****) Loss Deposit in 1^st Half-year 2003 Account is released and retained with the same amount as no Loss Portfolio is booked in this Account.

Percent of Loss Reserve #

This calculation method is relevant when the Accounting Basis is Run-off and is dependent on the Loss Reserve condition being entered.

Below description is based on the field Release in Next Account being selected.

All cumulated Loss Reserve bookings (per Insured Period) according to the Entry Code Sub Category Original Loss Reserve are multiplied with the Share of the ORP and the Loss Deposit percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Loss Deposit Retained by your System Administrator. It is possible to let the system calculate Loss Deposit based on Loss Reserve for the current Accounting Year only. Select the field ‘Calculate on Non-Cum Basis’ on the Loss Deposit Conditions to activate the calculation on non-cumulative basis.

If the field ‘Last Regulation’ on the Loss Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Loss Deposit Retained. System will continue releasing Loss Deposit until all are released (or until Last Account).

Loss Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Loss Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Loss Deposit Released. If the Deposit regulation is more frequent than the Loss Reserve calculation, then the Loss Deposit Retained/Released is booked with the same amount until the calculation of the Loss Reserve is performed.

Example 1:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
ORP Share = 10%
Loss Deposit =50% of Reserve, Half-yearly

*) Entry Code in Entry Code Sub Category Original Loss Reserve

**) Amount booked as Loss Deposit Retained in 1^stAccounting period is released in the next Accounting period

***) The basis for the Loss Deposit Retained is the cumulated Original Loss Reserve of the Insured Period

Percent of Loss #

Below description is based on the field Release in Next Account being selected.

Loss Deposit Retained

All cumulated Loss bookings according to the Entry Code Group selected as Loss Basis on the Loss Deposit condition up to and including the Current Accounting Year/Period are multiplied with the Loss Deposit percentage. The calculation is performed per Insured Period. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Loss Deposit Retained defined by your System Administrator. The calculation of the Loss Deposit Retained will continue for all Accounts until you run the last Account of the Insured Period (according to the Deposit regulation). In the last Account of the Insured Period, only a Loss Deposit Released is booked on the ORP Business Ledger As Booking.

If the field ‘Last Regulation’ on the Loss Deposit Conditions is filled in, the entered period indicates the Accounting Period from which there will be no further calculation of Loss Deposit Retained. System will continue releasing Loss Deposit until all are released (or until Last Account).

Loss Deposit Released

When you run the next Account according to the Deposit regulation, the amount booked as Loss Deposit Retained (in previous Accounting Period) is released and booked with the Entry Code from the system parameter, Calculation Loss Deposit Released.

Which Loss Entry Codes are parts of the Entry Code Groups within the Entry Code Group Category Loss Basis For Loss Deposit is decided by your System Administrator.

Example:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
ORP Share = 10%
Loss Deposit = 50% of Loss

*) The Loss Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Loss Basis For Loss Deposit (In this example 30, 31 and CPD).

**) Amount booked as Loss Deposit Retained in 1st Accounting period is released in the next Accounting Period (as Account/Deposit frequency in this example is the same).

***) Loss Deposit Retained - the basis is the cumulated ORP Loss bookings of the Insured Period. 1^st Account, Acct Year 2, IP 1; (6.000 + 20.000 + 4.000 + 5.000 + 4.000 + 1.000 ) x 50% = 20.000

Release in same Account(ing Period) in Next Accounting Year

Below description is based on the field Release in Same Account in Next Accounting Year being selected.

Loss Deposit Retained

This option is relevant when Accounting Basis is Run-off.

Depending on the calculation method the Loss Deposit and the Loss Reserve booking per Insured Period is multiplied with the Share of the ORP and the Loss Deposit percentage. The basis amount is from the current Accounting Year/Period only. If the Loss Deposit regulation is not as frequent as the Account frequency, the basis amount is from the Accounting Periods matching the Loss Deposit regulation. The basis amount is not cumulated figures as when release in Next Account is selected.

Loss Deposit Released

The Loss Deposit Released is booked in the same Accounting Period as the Loss Deposit Retained, but in the next Accounting Year. This option is relevant for the following calculations;

Percent of Original

Percent of Loss Reserve

Example:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Account frequency = Half-yearly
Deposit regulation = Half-yearly
RP Share = 10%
Loss Deposit = 100% of Original

*) Amount booked as Loss Deposit Retained in 1st Account, Accounting Year 2002, is released in the same Account in the next Accounting Year (2003)

Type of Securities

When Type of Securities is Cash, the Loss Deposit Retained and the Loss Deposit Released are booked with Entry Codes within the Entry Code Sub Category Loss Deposit(Entry Code Category Deposit). Which Entry Codes are selected are according to the system parameter Entry Code Usage, Calculations Loss Deposit Retained and Loss Deposit Released defined by your System Administrator.

When Type of Securities is different fromCash, the Loss Deposit Retained and the Loss Deposit Released are booked with Entry Codes within the Entry Code Sub Category Non Cash Loss Deposits (Entry Code Category Non-Liquid Deposits). Which Entry Codes are selected are according to the system parameter Entry Code Usage, Calculations Non Cash Loss Deposit Retained and Non Cash Loss Deposit Released defined by your System Administrator.

Freeze Deposit Calculation

When the Freeze Deposit Calculation is selected, the Loss Deposit Balance at the time the selection was made, is retained and released in Each Account (according to Deposit Regulation) until the field is cleared. New bookings, which normally will have an impact on the Loss Deposit basis, will notchange the Loss Deposit Retained/Released until the field is cleared. Interest and Tax on Interest amounts, if conditions apply, are calculated based on the unchanged deposit amounts.

This option is only valid for calculation methods

Percent of Original

Percent of Reserve

Example:

ORP Share = 10%
Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Loss Deposit = 100% of Original

*) Entry Codes in Entry Code Sub Category Loss Deposit

**) Loss Deposit Retained and Released booked with the same amount as Freeze Deposit Calculation is selected on Loss Deposit condition.

***) The basis for the calculation is cumulated figures for IP 2002

Calculate Deposits at cancellation

When the Calculate Deposits at cancellation is selected, no Deposit is calculated for the ORP until a Definite Cancellation date is entered (refer to Partners tab on ORP). This option is available when Accounting Basis is ‘Run-off’ only.

Calculate Interest on Loss Deposit #

Interest on Loss Deposit can be defined and calculated only when Type of Securities is Cash. The Interest on Loss Deposit can be calculated on the Loss Deposit Retained or on the Loss Deposit Balance. If Interest on Loss Deposit is to be calculated on the Loss Deposit balance, Interest can be calculated in each Account or in the last Account only. The following Interest Types are available:

None #

No Interest on Loss Deposit is calculated. Refer to Original.

Original #

To have the ‘original’ Interest on Loss Deposit booked on the ORP Business Ledger As Booking, an Entry Code Transformation Term has to be selected on the OCC’s Administration Condition Main Section/Sub Section. The Entry Code Transformation Term selected must be defined to transfer the Interest defined within the Entry Code Category Non-Technical to a corresponding Entry Code Sub-Category within the Entry Code Category Technical. Interest in this Entry Code Sub- Category is booked in each Account independent of the Loss Deposit Regulation and the Interest conditions.

If the flag Allow in Retrocession Calculation is selected for the Interest on Loss Deposit Entry Code, the original Interest on Loss Deposit booked on the OCC ‘as Original’business ledger will be retroceded to the OCC ‘as Booking’ and booked on the ORP business ledger ‘as Booking’ according to the Deposit Regulation. In this case, no Entry Code Transformation Term is required. The Entry Code assigned to the booking is according to the result Entry Code defined for the calculation, refer to system parameter Accounting/Entry Code/Retrocession (Estimation) Accounting Proportional Treaty.

Below description is based on the following fields being selected;
Interest Type Original
Interest Calculation Independent of Regulation

The Interest calculation is performed whenever Interest is booked on the source business and the Retrocession Calculation Order is run, independent of the Loss Deposit regulation. The Interest Calculation Independent of Regulation may be defined only when Interest Type is Original. Also Tax on Interest on Loss Deposit is calculated if booked on the source business.

Note: The above calculation is based on the flag Allow in Retrocession Calculation on the Interest/Tax on Interest Entry Codes being selected.

Percent #

A) Below description is based on the following fields being selected;

Interest Calculation Deposit Released Interest Calculation Before Tax Release In Next Account The Loss Deposit Released amount is multiplied with the Interest of Deposit percentage and divided by the Deposit Regulation according to following rules;

If Regulation is Month(s) - divide by 12

If Regulation is Quarter(s) - divide by 4

If Regulation is Trimester(s) - divide by 3

If Regulation is Half-year(s) - divide by 2

If Regulation is Year(s) - divide by 1

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Loss Deposit by your System Administrator.

Example of ORP Business Ledger:
Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Entry Code defined for Calculation Interest on Loss Deposit = ‘43’
Interest on Loss Deposit = 5% (before Tax)
Deposit Regulation = Trimester(s)
Loss Deposit = 50% of Loss Reserve (Entry Code = 83)

Accounting Basis = Run-off

*) Calculated as (-30.000 x 5%/3) = -500

**) Calculated as (-50.000 x 5%/3) = -833

B) Below description is based on the following fields being selected;

Interest Calculation Deposit Released Interest Calculation After Tax Release In Next Account The Interest on Loss Deposit is calculated according to the following;
A = Premium Deposit Released Amount
I = Premium Deposit Interest %
T = Tax on Interest %
N = Number according to frequency
Tax for one year = TY = (A x I x T)x-1/(1-T)
Tax for one half-year = THY = TY/2
Interest for one year = IY = A x I - TY
Interest for one half-year = IHY = IY/2

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Loss Deposit by your System Administrator.

Example ofO RP Business Ledger:

Entry Code defined for Calculation Loss Deposit Released = ‘62’
Entry Code defined for Calculation Interest on Loss Deposit = ‘43’
Entry Code defined for Calculation Tax on Interest = ‘45’
Interest on Loss Deposit = 5% (**After Tax)
** Tax on Interest = 10%
Deposit Regulation = Half-year(s)

*) Calculated as (-18.000 x 5% x 10%)x-1 / (1-10%) = 100 100/2 = 50

*) Calculated as (-18.000 x 5%) - 100 = -1.000 -1.000/2 = -500

C) Below description is based on the following fields being selected;

Interest Calculation Deposit Released Interest Calculation Each Account Release In Next Account The Loss Deposit Balance amount is multiplied with the Interest of Deposit percentage and divided by a number according to the Account Frequency.

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Loss Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Entry Code defined for Calculation Interest on Loss Deposit = ‘43’
Interest on Loss Deposit = 5% (before Tax)
Deposit Regulation = Trimester(s)
Loss Deposit = 50% of Loss Reserve

*) Calculated as (-10.000 x 5%/3) = -167

**) Calculated as (-30.000 x 5%/3) = -500

D) Below description is based on the following fields being selected;

Interest Calculation Deposit Released Interest Calculation Last Account Release In Next Account The Interest calculation is performed in the last Account only. The Loss Deposit Balance status after each Account from the current Accounting Year is multiplied with the Interest of Deposit percentage and divided by a number according to the Account Frequency.

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Loss Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Entry Code defined for Calculation Interest on Loss Deposit = ‘43’
Interest on Loss Deposit = 5% (before Tax)
Deposit Regulation = Trimester(s)
Loss Deposit = 50% of Loss Reserve

*) Calculated as; -10.000 x 5% / 3 = -167 +

-30.000 x 5% / 3= -500 +

= Interest booked in last Account**= -667**

E) Below description is based on the following fields being selected;

Interest Calculation Deposit Balance

Interest Calculation Last Account

Release in Same Account in Next accounting Year

The Interest calculation is performed in the last Account only. The Loss Deposit Balance status after each Account from the current Accounting Year is multiplied with the Interest of Deposit percentage and divided by a number according to the Account Frequency.

The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Interest on Loss Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Loss Deposit Retained = ‘61’
Entry Code defined for Calculation Loss Deposit Released = ‘62’
Entry Code defined for Calculation Interest on Loss Deposit = ‘43’
Interest on Loss Deposit = 5% (before Tax)
Deposit Regulation = Quarter(s)
Loss Deposit = 100% of Original

) Calculated as; (-10.000 x 5% / 4) = -125 +
((-10.000 x 5% / 4) + (-20.000 x 5% 4 )) = -375 +
((-10.000 x 5% / 4) + (-20.000 x 5% / 4) + (-5.000 x 5% / 4))= -437,50
= Interest booked in last Account*_= -937,50_**

Calculate Tax on Interest on Loss Deposit #

Tax on Interest can be defined and calculated only when Type of Securities is Cash. The following Interest Type is available:

None #

No Tax on Interest is calculated. Refer to Original.

Original #

To have the ‘original’ Tax on Interest booked on the ORP Business Ledger As Booking, an Entry Code Transformation Term has to be selected on the OCC’s Administration Condition Main Section/Sub Section. The Entry Code Transformation Term selected must be defined to transfer the Tax on Interest defined within the Entry Code Category Non-Technical to a corresponding Entry Code Sub-Category within the Entry Code Category Technical. Tax on Interest Type in this Entry Code Sub-Category is booked in each Account independent of the Loss Deposit Regulation and the Tax on Interest conditions.

If the flag Allow in Retrocession Calculation is selected for the Tax on Interest on Loss Deposit Entry Code, the original Tax on Interest on Loss Deposit booked on the OCC ‘as Original’business ledger will be retroceded to the OCC ‘as Booking’ and booked on the ORP business ledger ‘as Booking’ according to the Deposit Regulation. In this case, no Entry Code Transformation Term is required. The Entry Code assigned to the booking is according to the result Entry Code defined for the calculation, refer to system parameter Accounting/Entry Code/Retrocession (Estimation) Accounting Proportional Treaty.

Percent #

Below description is based on the field Interest Type Percent being selected.

The Interest on Loss Deposit amount booked on the ORP Business Ledger As Booking is multiplied with the Tax on Interest percentage. The result of the calculation is booked on the ORP Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Tax on Interest on Loss Deposit by your System Administrator.

Example of ORP Business Ledger:

Entry Code defined for Calculation Interest on Loss Deposit = ‘43’
Entry Code defined for Calculation Tax on Interest on Loss Deposit = ‘45’
Tax on Interest = 10%

*) Calculated as (-125 x 10%) x -1 = 12,5