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GENPRU 1.3 Valuation

Application

GENPRU 1.3.1RRP

  1. (1)

    1This section of the Handbook applies to an insurer, unless it is:

    1. (a)

      non-directive friendly society;

    2. (b)

      an incoming EEA firm; or

    3. (c)

      an incoming Treaty firm.

  2. (2)

    This section of the Handbook applies to a BIPRU firm.

  3. (3)

    This section of the Handbook applies to a UK ISPV.

Purpose

GENPRU 1.3.2GRP

This section sets out, for the purposes of GENPRU, BIPRU and INSPRU, rules and guidance as to how a firm should recognise and value assets, liabilities, exposures, equity and income statement items.

GENPRU 1.3.3GRP

  1. (1)

    In the case of a BIPRU firm, this section implements Article 74 of the Banking Consolidation Directive, Articles 64(4) and 64(5)9 of the Banking Consolidation Directive (Own funds) and Article 33 and Part B of Annex VII of the Capital Adequacy Directive.

    9
  2. (2)

    In the case of an insurer, GENPRU 1.3.4 R implements the requirements of Articles 23.3(viii) and 24.2(iv) of the Consolidated Life Directive.

General requirements: Accounting principles to be applied

GENPRU 1.3.4RRP

Subject to GENPRU 1.3.9 R to GENPRU 1.3.10 R and GENPRU 1.3.36 R, except where a rule in GENPRU, BIPRU or INSPRU provides for a different method of recognition or valuation, whenever a rule in GENPRU, BIPRU or INSPRU refers to an asset, liability, exposure, equity or income statement item, a firm must, for the purpose of that rule, recognise the asset, liability, exposure, equity or income statement item and measure its value in accordance with whichever of the following are applicable:

  1. (1)

    the insurance accounts rules, or the Friendly Societies (Accounts and Related Provisions) Regulations 1994;

  2. (2)

    Financial Reporting Standards and Statements of Standard Accounting Practice issued or adopted by the Accounting Standards Board;

  3. (3)

    Statements of Recommended Practice, issued by industry or sectoral bodies recognised for this purpose by the Accounting Standards Board;

  4. (4)

    the Building Societies (Accounts and Related Provisions) Regulation 1998;

  5. (5)

    international accounting standards;

    6
  6. (6)

    the Companies Act 1985; and 6

  7. (7)

    the Companies Act 2006;6

as applicable to the firm for the purpose of its external financial reporting (or as would be applicable if the firm was a company with its head office in the United Kingdom).

GENPRU 1.3.5GRP

Except where a rule in GENPRU, BIPRU or INSPRU makes different provision, GENPRU 1.3.4 R applies whenever a rule in GENPRU, BIPRU or INSPRU refers to the value or amount of an asset, liability, exposure, equity or income statement item, including:

  1. (1)

    whether, and when, to recognise or de-recognise an asset or liability;

  2. (2)

    the amount at which to value an asset, liability, exposure, equity or income statement item; and

  3. (3)

    which description to place on an asset, liability, exposure, equity or income statement item.

GENPRU 1.3.6GRP

In particular, unless an exception applies, GENPRU 1.3.4 R should be applied for the purposes of GENPRU, BIPRU or INSPRU to determine how to account for:

  1. (1)

    netting of amounts due to or from the firm;

  2. (2)

    the securitisation of assets and liabilities (see also GENPRU 1.3.7 G);

  3. (3)

    leased tangible assets;

  4. (4)

    assets transferred or received under a sale and repurchase3 or stock lending transaction; and

  5. (5)

    assets transferred or received by way of initial or variation margin under a derivative or similar transaction.

GENPRU 1.3.7G

In the case of an insurer or a UK ISPV, where assets or liabilities are securitised, GENPRU 1.3.4 R only permits de-recognition where Financial Reporting Standards7 (or, where applicable, International Accounting Standards) permit7 either de-recognition or the linked presentation. However, the FSA will consider granting a waiver to permit de-recognition in other circumstances provided that the firm can demonstrate that securitisation has effectively transferred risk

77
GENPRU 1.3.8G

Articles 23.3(viii) and 24.2(iv) of the Consolidated Life Directive require assets of an insurer that are managed on its behalf by a subsidiary undertaking to be taken into account for the purposes of determining the insurer's admissible assets and its assets in excess of concentration limits. The application of GENPRU 1.3.4 R will result in such assets remaining on the balance sheet of the insurer.

General requirements: Adjustments to accounting values

GENPRU 1.3.9RRP

For the purposes of GENPRU, BIPRU or INSPRU, except where a rule in GENPRU, BIPRU or INSPRU provides for a different method of recognition or valuation:

  1. (1)

    when a firm, upon initial recognition, designates its liabilities as at fair value through profit or loss, it must always adjust any value calculated in accordance with GENPRU 1.3.4 R by subtracting any unrealised gains or adding back in any unrealised losses which are not attributable to changes in a benchmark interest rate;

  2. (2)

    in respect of a defined benefit occupational pension scheme:

    1. (a)

      a firm must derecognise any defined benefit asset;

    2. (b)

      a firm may substitute for a defined benefit liability the firm's deficit reduction amount.

GENPRU 1.3.10RRP

An election made under GENPRU 1.3.9R (2) must be applied consistently for the purposes of GENPRU, BIPRU or INSPRU in respect of any one financial year.

GENPRU 1.3.11GRP

A firm should keep a record of and be ready to explain to its supervisory contacts in the FSA the reasons for any difference between the deficit reduction amount and any commitment the firm has made in any public document to provide funding in respect of a defined benefit occupational pension scheme.

GENPRU 1.3.12GRP

The provisions of GENPRU 1.3.9 R to GENPRU 1.3.10 R and GENPRU 1.3.36 R apply only to the extent that the items referred to in those paragraphs would otherwise be recognised under the accounting requirements applicable to the firm. Some of those requirements may only be relevant to a firm subject to international accounting standards.

General requirements: Methods of valuation and systems and controls

GENPRU 1.3.13RRP

  1. (1)

    Except to the extent that GENPRU, BIPRU or INSPRU provide for another method of valuation, GENPRU 1.3.14 R to GENPRU 1.3.34 R (Marking to market, Marking to model, Independent price verification, Valuation adjustments or, in the case of an insurer or a UK ISPV, valuation adjustments9 or reserves) apply:

    9
    1. (a)

      for the purposes set out in GENPRU 1.3.41 R;

    2. (b)

      for the purposes set out in GENPRU 1.3.39 R; and

    3. (c)

      to any balance sheet position measured at market value or fair value.

  2. (2)

    A firm must establish and maintain systems and controls sufficient to provide prudent and reliable valuation estimates.

  3. (3)

    Systems and controls under (2) must include at least the following elements:

    1. (a)

      documented policies and procedures for the process of valuation, including clearly defined responsibilities of the various areas involved in the determination of the valuation, sources of market information and review of their appropriateness, frequency of independent valuation, timing of closing prices, procedures for adjusting valuations, month-end and ad-hoc verification procedures, and, in the case of a BIPRU firm, guidelines for the use of unobservable inputs reflecting the firm's assumptions of what market participants would use in pricing the position; and9

    2. (b)

      reporting lines for the department accountable for the valuation process that are:

      1. (i)

        clear and independent of the front office; and

      2. (ii)

        ultimately to a main board executive director.

General requirements: Marking to market

GENPRU 1.3.14RRP

Wherever possible, a firm must use mark to market in order to measure the value of the investments and positions to which this rule applies under GENPRU 1.3.13 R and GENPRU 1.3.38 R to GENPRU 1.3.41 R. Marking to market is valuation (on at least a daily basis in the case of the trading book positions of a BIPRU firm) at readily available close out prices from independent sources.

GENPRU 1.3.15R

For the purposes of GENPRU 1.3.14 R, examples of readily available close out prices include exchange prices, screen prices, or quotes from several independent reputable brokers.

GENPRU 1.3.16RRP
  1. (1)

    4When marking to market, a firm must use the more prudent side of bid/offer unless the firm is a significant market maker in a particular position type and it can close out at the mid-market price.

  2. (2)

    4When calculating the current exposure value of a credit risk exposure for counterparty credit risk purposes:

    1. (a)

      a firm must use the more prudent side of bid/offer or the mid-market price and the firm must be consistent in the basis it chooses; and4

    2. (b)

      where the difference between the more prudent side of bid/offer and the mid-market price is material, the firm must consider making adjustments or, in the case of an insurer or a UK ISPV, making adjustments or9 establishing reserves.4

General requirements: Marking to model

GENPRU 1.3.17RRP

Where marking to market is not possible, a firm must (in the case of a BIPRU firm, conservatively)9use mark to model in order to measure the value of the investments and positions to which this rule applies under GENPRU 1.3.13 R and GENPRU 1.3.38 R to GENPRU 1.3.41 R. Marking to model is any valuation which has to be benchmarked, extrapolated or otherwise calculated from a market input. GENPRU 1.3.18 R to GENPRU 1.3.25 R apply when marking to model.

GENPRU 1.3.18RRP

When the model used is developed by the firm, that model must be:

  1. (1)

    based on appropriate assumptions which have been assessed and challenged by suitably qualified parties independent of the development process;

  2. (2)

    independently tested, including validation of the mathematics, assumptions, and software implementation; and

  3. (3)

    (in the case of a BIPRU firm) developed or approved independently of the front office.

GENPRU 1.3.19RRP

A firm must ensure that its senior management are aware of the positions which are subject to mark to model and understand the materiality of the uncertainty this creates in the reporting of the performance of the business of the firm and the risks to which it is subject.

GENPRU 1.3.20RRP

A firm must source market inputs in line with market prices so far as possible and assess the appropriateness of the market inputs for the position being valued and the parameters of the model on a frequent basis.

GENPRU 1.3.21RRP

A firm must use generally accepted valuation methodologies for particular products where these are available.

GENPRU 1.3.22RRP

A firm must establish formal change control procedures, hold a secure copy of the model, and periodically use that model to check valuations.

GENPRU 1.3.23RRP

A firm must ensure that its risk management functions are aware of the weaknesses of the models used and how best to reflect those in the valuation output.

GENPRU 1.3.24RRP

A firm must periodically review the model to determine the accuracy of its performance.

GENPRU 1.3.25RRP

Examples of periodical review are assessing the continued appropriateness of the assumptions, analysis of profit and loss versus risk factors and comparison of actual close out values to model outputs.

General requirements: Independent price verification

GENPRU 1.3.26RRP

In addition to marking to market or marking to model, a firm must perform independent price verification. This is the process by which market prices or model inputs are regularly verified for accuracy and independence.

GENPRU 1.3.27GRP

For independent price verification, where independent pricing sources are not available or pricing sources are more subjective (for example, only one available broker quote), prudent measures such as valuation adjustments may be appropriate.

GENPRU 1.3.28RRP

In the case of the trading book positions of a BIPRU firm, while daily marking to market may be performed by dealers, verification of market prices and model inputs must be performed by a unit independent of the dealing room, at least monthly (or, depending on the nature of the market/trading activity, more frequently).

General requirements: Valuation adjustments or, in the case of an insurer or a UK ISPV, valuation adjustments or reserves9

GENPRU 1.3.29RRP

The recognition of any gains or losses arising from valuations subject to GENPRU 1.3.13 R and GENPRU 1.3.38 R to GENPRU 1.3.41 R must be recognised for the purpose of calculating capital resources in accordance with GENPRU 1.3.14 R to GENPRU 1.3.34 R (Marking to market, Marking to model, Independent price verification, Valuation adjustments or, in the case of an insurer or a UK ISPV, valuation adjustments9 or reserves). However if GENPRU, BIPRU or INSPRU provide for another treatment of such gains or losses, that other treatment must be applied.

9
GENPRU 1.3.30RRP

A firm must establish and maintain procedures for considering valuation adjustments or, in the case of an insurer or a UK ISPV, valuation adjustments or9 reserves. These procedures must be compliant with the requirements set out in GENPRU 1.3.33 R.

GENPRU 1.3.31RRP

A firm using third-party valuations, or marking to model, must consider whether valuation adjustments are necessary.

GENPRU 1.3.32RRP

A firm must consider the need for making adjustments or, in the case of an insurer or a UK ISPV,9establishing reserves for less liquid positions and, on an ongoing basis, review their continued appropriateness in accordance with the requirements set out in GENPRU 1.3.33 R. Less liquid positions could arise from both market events and institution-related situations e.g. concentration positions and/or stale positions.

GENPRU 1.3.33RRP

  1. (1)

    This paragraph sets out the requirements referred to in GENPRU 1.3.30 R and GENPRU 1.3.32 R.

  2. (2)

    A firm must consider the following adjustments or, in the case of an insurer or a UK ISPV, adjustments or9 reserves: unearned credit spreads, close-out costs, operational risks, early termination, investing and funding costs, future administrative costs and, where appropriate, model risk.

  3. (3) 9
    1. (a)

      In the case of a BIPRU firm, a firm must establish and maintain procedures for calculating adjustments to the current valuation of less liquid positions. Those adjustments must, where necessary, be in addition to any changes to the value of the position required for financial reporting purposes and must be designed to reflect the illiquidity of the position.9

    2. (b)

      A firm must consider several factors when determining whether a valuation adjustment or, in the case of an insurer or a UK ISPV, valuation adjustment or reserve is necessary for less liquid positions. These factors include the amount of time it would take to hedge out the position/risks within the position; the average and volatility of bid/offer spreads; the availability of market quotes (number and identity of market makers); the average and volatility of trading volumes; market concentrations; the ageing of positions; the extent to which valuation relies on marking to model and the impact of other model risks.9

  4. (4)

    With regard to complex products including, but not limited to, securitisation exposures and nth-to-default credit derivatives, a BIPRU firm must explicitly consider the need for valuation adjustments for model risk arising from using a valuation which may be incorrect or the risk from using unobservable calibration parameters in the valuation model.9

GENPRU 1.3.34RRP

If the result of making9 adjustments or, in the case of an insurer or a UK ISPV, making adjustments or establishing9 reserves under GENPRU 1.3.29 R to GENPRU 1.3.33 R is a valuation which differs from the fair value determined in accordance with GENPRU 1.3.4 R, a firm must reconcile the two valuations.

9
GENPRU 1.3.35GRP

Reconciliation differences under GENPRU 1.3.34 R should not be reflected in the valuations under GENPRU 1.3 but should be disclosed to the FSA in prudential returns.10 Firms which are subject to the reporting requirement under SUP 16.16 should disclose those reconciliation differences in the Prudent Valuation Return which they are required to submit to the FSA under SUP 16.16.4 R.

GENPRU 1.3.35AG

UK banks and BIPRU 730k firms are reminded that they may, in respect of their prudent valuation assessments under GENPRU 1.3.4 R and GENPRU 1.3.14 R to GENPRU 1.3.34 R, be subject to the requirement under SUP 16.16.4 R to submit a Prudent Valuation Return to the FSA.

Specific requirements: BIPRU firms

GENPRU 1.3.36RRP

Adjustments to accounting values

  1. (1)

    For the purposes of GENPRU and BIPRU, the adjustments in (2) and (3) apply to values calculated pursuant to GENPRU 1.3.4 R in addition to those required by GENPRU 1.3.9 R to GENPRU 1.3.10 R.

  2. (2)

    A BIPRU firm must not recognise either:

    1. (a)

      the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost; or

    2. (b)

      any unrealised gains or losses on debt instruments held, or formerly held,8 in the available-for-sale category.

  3. (3)

    A BIPRU investment firm must deduct any asset in respect of deferred acquisition costs and add back in any liability in respect of deferred income (but exclude from the deduction or addition any asset or liability which will give rise to future cash flows), together with any associated deferred tax.

  4. (4)

    The items referred to in (2) and (3) must be excluded from capital resources.

GENPRU 1.3.37G

Provisions for equity instruments held in the available-for-sale category can be found in GENPRU 2.2.185 R.

Trading book and other fair-valued positions, and revaluations9

GENPRU 1.3.38R
GENPRU 1.3.39RRP

Both trading book9 positions and other fair-valued positions9are subject to prudent valuation rules as specified in GENPRU 1.3.14 R to GENPRU 1.3.34 R (Marking to market, Marking to model, Independent price verification,Valuation adjustments or, in the case of an insurer or a UK ISPV, valuation adjustments9 or reserves). In accordance with those rules, a firm must ensure that the value applied to each of its trading book positionsand other fair-valued positions9 appropriately reflects the current market value. This value must contain an appropriate degree of certainty having regard to the dynamic nature of trading book positions, the demands of prudential soundness and the mode of operation and purpose of capital requirements in respect of trading book positions and other fair-valued positions.9

99
GENPRU 1.3.40RRP

Trading book positions must be re-valued at least daily.

Specific requirements: firms carrying on insurance business

Investments, derivatives and quasi-derivatives

GENPRU 1.3.41R

  1. (1)

    For the purposes of GENPRU and INSPRU, an insurer or a UK ISPV must apply GENPRU 1.3.14 R to GENPRU 1.3.34 R (Marking to market, Marking to model, Independent price verification,Valuation adjustments or, in the case of an insurer or a UK ISPV, valuation adjustments9 or reserves) to account for:

    9
    1. (a)

      investments that are, or amounts owed arising from the disposal of:

      1. (i)

        debt securities, bonds and other money- and capital-market instruments;

      2. (ii)

        loans;

      3. (iii)

        shares and other variable yield participations;

      4. (iv)

        units in UCITS schemes, non-UCITS retail schemes, recognised schemes and any other collective investment scheme falling within paragraph(1)(A)(d)(iv) of GENPRU 2 Annex 72; and

    2. (b)

      derivatives and quasi-derivatives

  2. (2)

    In the case of an insurer, (1) is subject to GENPRU 1.3.43 R.

Shares in and debts due from related undertakings

GENPRU 1.3.42R
GENPRU 1.3.43R

GENPRU 1.3.13 R and GENPRU 1.3.41 R do not apply to shares in, and debts3 due from a related undertaking that is:

  1. (1)

    a regulated related undertaking;

  2. (2)

    an ancillary services undertaking; or

  3. (3)

    any other subsidiary undertaking, the shares of which a firm elects to value in accordance with GENPRU 1.3.47 R.

GENPRU 1.3.44G

The effect of GENPRU 1.3.43 R is that shares in, and debts3 due from, related undertakings of the types referred to are not valued on a mark to market basis by insurers. As a result, debts3 due from these undertakings, and shares in related undertakings which are ancillary services undertakings, are valued at their accounting book value in accordance with GENPRU 1.3.4 R. shares in related undertakings referred to in GENPRU 1.3.43R (1) or (3) are valued by insurers in accordance with GENPRU 1.3.45 R to GENPRU 1.3.50 R.

GENPRU 1.3.45R

Except where the contrary is expressly stated in GENPRU, whenever a rule3 in GENPRU or INSPRU refers to shares held in, and debts3 due from, an undertaking referred to in GENPRU 1.3.43R (1) or GENPRU 1.3.43R (3), a firm must value the shares held in accordance with GENPRU 1.3.47 R.

GENPRU 1.3.46R

In relation to shares in, and debts3 due from, an undertaking referred to in GENPRU 1.3.43R (1), GENPRU 1.3.45 R does not apply for the purposes of GENPRU 2.2.256 R (Adjustments for regulated related undertakings other than insurance undertakings) and INSPRU 6.1 (Group risk: Insurance groups).

GENPRU 1.3.47R

For the purposes of GENPRU 1.3.45 R, the value of the shares held in an undertaking referred to in GENPRU 1.3.43R (1) or GENPRU 1.3.43R (3) is the sum of:

  1. (1)

    the regulatory surplus value5of that undertaking; less

    5
  2. (2)

    for the purposes of GENPRU 2.2.256 R (Adjustments for regulated related undertakings other than insurance undertakings), the book value of the total investments in the tier one capital resources and tier two capital resources of that undertaking by the firm and its related undertakings; or

  3. (3)

    for other purposes in GENPRU and INSPRU, the sum of:

    1. (a)

      the book value of the investments by the firm and its related undertakings in the tier two capital resources of the undertaking; and

    2. (b)

      if the undertaking is an insurance undertaking, its ineligible surplus capital and any restricted assets of the undertaking which have been excluded under INSPRU 6.1.41R (1).

GENPRU 1.3.48R

For the purposes of GENPRU 1.3.47R (1), the regulatory surplus value of an undertaking referred to in GENPRU 1.3.43R (1) or GENPRU 1.3.43R (3) is, subject to GENPRU 1.3.49 R, the sum of:

  1. (1)

    the total capital after deductions of the undertaking; less

  2. (2)

    the individual capital resources requirement of the undertaking.

GENPRU 1.3.49R

  1. (1)

    Subject to GENPRU 1.3.50 R, for the purposes of GENPRU 1.3.48 R, only the relevant proportion of the:

    1. (a)

      total capital after deductions of the undertaking; and

    2. (b)

      individual capital resources requirement of the undertaking;

    is to be taken into account.

  2. (2)

    In (1), the relevant proportion is the proportion of the total number of shares issued by the undertaking held, directly or indirectly, by the firm.

GENPRU 1.3.50R

If the individual capital resources requirement of an undertaking in GENPRU 1.3.43R (1) that is a subsidiary undertaking exceeds total capital after deductions, then the full amount of the items referred to in GENPRU 1.3.49R (1) must be taken into account for the purposes of GENPRU 1.3.48 R.

GENPRU 1.3.51R

For the purposes of GENPRU 1.3.47 R to GENPRU 1.3.50 R:

  1. (1)

    in relation to an undertaking referred to in GENPRU 1.3.43R (1):

    1. (a)

      subject to (2), individual capital resources requirement has the meaning given by INSPRU 6.1.34 R;

    2. (b)

      total capital after deductions means:

      1. (i)

        when used in relation to a regulated related undertaking that is subject to the capital resources table, the total capital after deductions (as calculated at stage M of the capital resources table) of the undertaking; and

      2. (ii)

        when used in relation to a regulated related undertaking that is not subject to the capital resources table, the total capital after deductions calculated as if that undertaking were required to calculate its total capital after deductions in accordance with stage M of the calculation in the capital resources table, but with such adjustments being made to secure that the undertaking's calculation of its total capital after deductions complies with the relevant sectoral rules applicable to it; and

    3. (c)

      ineligible surplus capital has the meaning given by INSPRU 6.1.67 R;

  2. (2)

    in relation to an undertaking referred to in GENPRU 1.3.43R (3),

    1. (a)

      the individual capital resources requirement is zero; and

    2. (b)

      the total capital after deductions means the total capital after deductions of the undertaking calculated as if the undertaking were an insurance holding company required to calculate its total capital resources in accordance with the capital resources table but with such adjustments being made to secure that the undertaking's calculation of its total capital after deductions complies with the sectoral rules for the insurance sector.

GENPRU 1.3.52G

GENPRU 1.3.47 R to GENPRU 1.3.51 R set out several different valuation bases for an insurer's shares in related undertakings. The regulatory surplus value5(defined in GENPRU 1.3.48 R) measures the related undertaking's own capital surplus or deficit. This is used: (i) in GENPRU 1.3.47 R as a basis for calculating the impact on the firm's position of its investments in related undertakings; and (ii) in INSPRU 6.1 as a starting point for the calculation of ineligible surplus capital.

5
GENPRU 1.3.53G

GENPRU 1.3.47 R determines how, for the purposes of the solo capital adequacy calculation of an insurer, that insurer's capital resources should be adjusted to take into account its investments in related undertakings.

GENPRU 1.3.54G

The rules that specify how, for the purposes of the adjusted solo capital calculation, an insurer should incorporate its related undertakings into its capital resources and capital resources requirement are set out in INSPRU 6.1.

Insurance Special Purpose Vehicles

GENPRU 1.3.55R

Except where a rule in GENPRU or INSPRU makes a different provision, an insurer must not place any value on amounts recoverable from an ISPV for the purposes of any rule in GENPRU or INSPRU.

GENPRU 1.3.56G

An insurer may value amounts recoverable from an ISPV if it obtains a waiver of GENPRU 1.3.55 R under section 148 of the Act. The conditions that will need to be met, in addition to the statutory tests under section 148(4) of the Act, before the FSA will consider granting such a waiver are set out in INSPRU 1.6.13 G to INSPRU 1.6.18 G.

General insurance business: Community co-insurance operations -

GENPRU 1.3.57R

Where a relevant insurer determines the amount of a liability in order to make provision for outstanding claims under a Community co-insurance operation, then, if the leading insurer has informed the relevant insurer of the amount of the provision made by the leading insurer for such claims, the amount determined by the relevant insurer:

  1. (1)

    must be at least as great as the amount of the provision made by the leading insurer; or

  2. (2)

    in a case where it is not the practice in the United Kingdom to make such provision separately, must be sufficient, when all liabilities are taken into account, to include provision at least as great as that made by the leading insurer for such claims,

due regard being had in either case to the proportion of the risk covered by the relevant insurer and by the leading insurer respectively.