If the company carries on all of its BLAGAB on a mutual basis, the whole of the I-E profit is charged at policyholders' rate on the basis that all of the profits accrue for the benefit of the policy holders1.
Otherwise the amount of I-E profit charged at the policyholder rate depends on whether there is a BLAGAB trade profit for the period. This is because the BLAGAB trade profit effectively represents the profit made by the shareholders from writing the business. As a result there are three possible circumstances that the legislation has to cater for:
- Ìý
•ÌýÌýÌýÌý If there is no BLAGAB trade profit, the policyholders' share is the whole of the I-E profit2.
- Ìý
•ÌýÌýÌýÌý If there is a BLAGAB trade profit and the adjusted amount of that profit is less than the I-E profit, the difference between the two amounts is the policyholders' share3.
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Web page updated on 17 Mar 2025 16:35