I-3 - Taxation Act

Section 92.23 Disposition versions

2010-10-27

92.23. In this section and sections 92.24 to 92.30,

“base year” of an insurer means the insurer’s taxation year that precedes its transition year;

“insurance business” of an insurer means an insurance business carried on by the insurer, other than a life insurance business;

“reserve transition amount” of an insurer, in respect of an insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

“transition year” of an insurer means the insurer’s first taxation year that begins after 30 September 2006.

In the formula in the definition of “reserve transition amount” in the first paragraph,

(a)  A is the maximum amount that the insurer would be permitted to claim under the second paragraph of section 152 as a reserve for its base year in respect of its insurance policies if

i.  the generally accepted accounting principles that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under the second paragraph of section 152, as they read for the insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the insurer is permitted to claim under the second paragraph of section 152 as a reserve for its base year.

2010, c. 25, s. 12.