Gore Mutual Insurance Co. v. The Queen, 97 DTC 1217 (TCC)
In order for Regulation 1400(e) to include reinsurance rate adjustments, words such as "and increased reinsurance premiums" should have followed the word "claim" where it first appears in that paragraph. Accordingly, the taxpayer could not deduct reserves for reinsurance rate adjustments that it estimated would be ultimately payable by it in respect of risks that had been assumed by reinsuring companies. Bowie TCJ. also noted (at p. 1221) that "the word 'policy' as it is used there, can only refer to a policy of insurance written by the Appellant, and not to a policy reinsurance ceded by it to another company".
9 February 1993 T.I. (Tax Window, no. 29, p. 22, ¶2431)
Where an insurance company accepts an annuity contract as partial consideration for the assumption for another party's obligation with respect to a structured settlement, it will be permitted to deduct a policy reserve under s. 20(7)(c) of the Act provided that its obligation under the Assumption Agreement (that it is permitted by the relevant authority to enter into) constitutes an insurance policy, and that the amount of the reserve in respect of the liability arising under the policy is reported in its annual report to the relevant authority and is equal to the present value of the liability.