1. Items which affect more than one year of account shall be accounted for so as to ensure a treatment which is equitable as between the members of the syndicate affected; and in particular the amount charged by way of premium in respect of reinsurance to close shall, where the reinsuring members and the reinsured members are members of the same syndicate for different years of account, be equitable as between them, having regard to the nature and amount of the liabilities reinsured.
2. Accounting policies shall be applied so as to ensure uniform treatment of like items in respect of each year of account and shall be applied consistently throughout each year of account and from one year of account to the next.
3. The amount of any item included in underwriting year accounts shall be determined on a prudent basis.
4. All income and charges relating to a closed year of account or run-off account shall be taken into account in the underwriting year accounts prepared in respect of that year of account, without regard to the date of receipt or payment.
5. Premiums and claims in respect of insurance contracts underwritten by members of the syndicate shall be allocated to the year of account corresponding to the calendar year in which the contract incepts, except as follows -
(a) premiums and claims in respect of insurance contracts underwritten under a binding authority, line slip or consortium arrangement shall be allocated to the year of account corresponding to the calendar year of inception of the binding authority, line slip or consortium arrangement;
(b) premiums and claims in respect of insurance contracts of which the inception date is unknown at the date when the contract is concluded shall be allocated to such year of account as the lead underwriter shall specify;
(c) premiums and claims in respect of insurance contracts underwritten by provisional insurers for which there are subsequently no other definitive insurers shall be allocated in such a way as to be equitable as between the members of the syndicate concerned;
(d) premiums and claims in respect of reinsurance to close contracts shall be allocated to the year of account into which the reinsurance to close is effected.
6. Syndicate operating expenses shall be allocated to the year of account for which they are incurred.
7. Without prejudice to the generality of [10. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Syndicate underwriting year accounts] and [10. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Run-off accounts], underwriting year accounts shall include a statement of the following policies (or such of them as may be applicable to the syndicate concerned) -
(a) the basis on which premiums and claims (including any related reinsurance premiums and recoveries) are allocated to a particular year of account;
(b) the basis on which underwriting transactions are included in the particular underwriting year accounts;
(c) the year of account into which the reinsurance to close of each year of account is effected;
(d) the basis on which investment income and investment appreciation or depreciation are computed and are apportioned over different years of account, and the reasons for any changes in that basis;
(e) the basis on which syndicate expenses are apportioned over different years of account, and the reasons for any changes in that basis; and
(f) the basis of translation of foreign currency items.