Life Insurance (prudential standard) determination No. 1 of 2011 - Prudential Standard LPS 600 - Statutory Funds
Investment-linked contractsInvestment-linked contracts
Start here
Get a plain-English read of Investment-linked contracts
Turn the raw legal text into a practical explanation grounded in Life Insurance (prudential standard) determination No. 1 of 2011 - Prudential Standard LPS 600 - Statutory Funds.
Investment-linked contracts
- A benefit in respect of which all the following conditions are satisfied:
(a) the benefit is an investment-linked benefit;
(b) the benefit has the features mentioned in paragraph 15(2)(a) of the Act;
(c) the amount of the benefit is to be calculated according to a formula that:
(i) is set out in the policy document; and
(ii) includes an element that is dependent on, or to be ascertained according to, a decision of the life company;
(d) if the charges payable under the policy are dependent on, or to be ascertained according to, a decision of the company, those charges as determined by or ascertained according to the decision of the company:
(i) are specified as a dollar amount, a percentage, or a combination of a dollar amount and a percentage; and
(ii) to the extent that the charges are specified as a dollar amount - do not exceed the charges, specified as a dollar amount, that applied when the policy was issued, increased in accordance with a formula or index relating to price variations that the company believes, on reasonable grounds, operates fairly and reasonably in the circumstances (for example, a consumer price index published by the Australian Bureau of Statistics); and
(iii) to the extent that the charges are specified as a percentage - do not exceed twice the specified percentage that applied when the policy was issued;
(e) the circumstances in which and the conditions subject to which the company may make a decision mentioned in subparagraph (c)(ii) are set out in the policy document.