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LAM15310 - Life Assurance Manual - HMRC internal manual


LAM15310 - Excess expenses, losses and deficits: Loss restriction: switching off the loss restriction when there is a shock loss: Has there been a shock loss? CTA10/259ZM
A “shock loss” is a loss that meets the conditions in CTA10/259ZM and is claimed as a shock loss under the provisions of CTA10/S269ZK(1).
Shock losses can be carried forward and set off against profits arising from the same source in full without the application of the loss restriction rules (LAM 15200). See LAM15360 for more details on the use of shock losses.
CTA10/S269ZM contains a test to see whether a ‘solvency shock period’ has arisen. This works by looking across a 12-month period and seeing whether for that period the insurance company has a solvency loss which is greater than its shock loss threshold. ....

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