Companies Act 2014 section 1444

Realised profits of assurance companies

Section 1444 sets out how surpluses and deficits in the life assurance or industrial assurance funds of certain company types are to be treated for the purposes of the distribution rules in Chapter 7 of Part 3 of the Act.

• Applies to designated activity companies, public limited companies, and companies limited by guarantee carrying on life or industrial assurance business
• Any amount properly transferred from a surplus in an assurance fund to the profit and loss account is treated as a realised profit; any deficit in such a fund is treated as a realised loss
• Apart from these specific transfers, all other profits or losses arising on the assurance fund are excluded from the calculation of distributable profits
• Whether a surplus or deficit exists is determined by an actuarial investigation comparing fund assets against the liabilities attributable to the assurance business