Lloyd’s system whereby an underwriting year is not closed until the end of the third year following inception of the underwriting year and all premiums and claims for that year are accounted to that year. An account opened on 1 January 2003 will be open until 31 December 2005. A reserve for outstanding claims liability is then carried forward to the next open year by a reinsurance to close. Lloyd’s is now moving to ‘annual accounting, the approach used by insurance companies.