Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance Article 7

An insurer shall set aside a special reserve for the retained business of this insurance pursuant to the following provisions:1.The total sum of retained earned pure premium and interest earned on the balance of the special reserve in the previous year, less the total sum of the retained claim payment and the difference between the previous period’s loss component and that of the current period, shall be completely set aside as a special reserve;2.If the total sum of retained earned pure premium and interest earned on the balance of the special reserve in the preceding fiscal year is less than the total sum of the retained claim payment and the difference between the previous period’s loss component and that of the current period, the deficit shall be amended with the recovered special reserve accumulated in the previous years. If any deficit remains, the balance shall be recorded as a memorandum entry and amended with the recovered special reserves in the subsequent years.