Starting amount for shareholders’ retainStarting amount for shareholders’ retained profits (Australian participating)

Starting amount for shareholders’ retained profits (Australian participating)

41. For the purposes of the definition of “shareholders’ retained profits (Australian participating)” in subsection 61(1) of the Act, the starting amount is the initial starting amount under Part 1 plus the IFRS starting amount adjustment under Part 2:

Part 1

The initial starting amount is the lower of the following amounts:

(a) the sum of:

(i) such part of the aggregate retained profits of the category of business of the statutory fund representing Australian participating business as is not allocated to the starting amount for Australian policy owners’ retained profits in accordance with this Prudential Standard; and

(ii) such part of the aggregate retained profits of the category of business of the statutory fund representing non-participating business as the life company determines;

(b) 25% of the initial starting amount for Australian policy owners’ retained profits determined in accordance with this Prudential Standard.

Part 2

The IFRS starting amount adjustment is the greater of:

(a) such part of the IFRS change in net assets of the category of business of the statutory fund representing Australian participating business as is not applied to increase the initial starting amount for Australian policy owner’ retained profits in accordance with this Prudential Standard; and

(b) an amount such that after applying the IFRS starting amount adjustment, the shareholders’ retained profits (Australian participating) of the statutory fund are equal to 25% (or such lower percentage as is specified in the life company’s constitution) of the Australian policy owners’ retained profits of the statutory fund (after the IFRS starting amount adjustment applied in accordance with this Prudential Standard).