Policies other than investment-linked orPolicies other than investment-linked or investment account contracts

Policies other than investment-linked or investment account contracts

26. A benefit in respect of which all the following conditions are satisfied:

(a) the benefit is not an investment-linked benefit or an investment account 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 only elements of the formula mentioned in paragraph (c) that are dependent on, or to be ascertained according to, a decision of the company are one or both of the following:

(i) the charges payable under the policy;

(ii) the surrender value of the policy;

(f) 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.