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(1) For purposes of this Act, any other business activity of a person who conducts a life insurance business is a separate business from the life insurance business and the income or loss of that person from each of the businesses for a year of assessment is to be calculated separately.

(2) Where the income derived by a person from a life insurance business for a year of assessment is to be ascertained, the person doing the calculation shall

(a) exclude from the income the following items and the items excluded shall not be regarded as consideration received for an asset or liability:

(i) premiums derived by the person as an insurer or a re-insurer; and

(ii) proceeds derived by the person under a contract of re-insurance in respect of proceeds referred to in paragraph (b)(i); and

(b) not deduct from the income the following items which are not to be included in the cost of an asset or liability:

(i) proceeds incurred by the person as an insurer or a re-insurer; and

(ii) premiums incurred by the person under a contract of re-insurance in respect of proceeds referred to in subparagraph (i).