(1) Implicit discounting or deduction, including discounting or deduction by way of financial reinsurance, whether resulting from the placing of a present value on a provision for an outstanding claim which is expected to be settled later at a higher figure or otherwise effected, such discounting or deduction is prohibited.
(2) However, explicit discounting or deduction, including by way of financial reinsurance, to take account of investment income is permitted for the purpose of the accounts to be submitted to the Bank in accordance with the European Communities (Non-Life Insurance Accounts) Regulations, 1977, subject to any conditions which the Bank may from time to time deem necessary. In particular, the following conditions shall apply:
(a) the expected date for the settlement of claims shall be on average at least four years after the accounting date;
(b) the discounting or deduction shall be effected on a recognised prudential basis; any change in that basis shall be notified, i
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