Corporation Tax Act 2010 section 269ZI

Qualifying latent claims

Section 269ZI defines what constitutes a "qualifying latent claim" for general insurance companies, which is relevant to determining whether certain accounting periods are excluded from restrictions on tax deductions.

• A qualifying latent claim must relate to a type of risk that was not reasonably foreseeable when the insurance policy was written, and the policy terms would have been significantly different had the risk been known (Condition A).
• The average period between the insured event occurring and the claim being notified — the "latency period" — must exceed 10 years for that type of claim (Condition B).
• The claim must arise under an employer's liability policy or a public or products liability policy, or under a part of a broader policy that provides such cover (Condition C).
• The claim can be actual or potential, and it does not matter whether the claim has already been notified or is still outstanding.