Life Insurance (prudential standard) determination No. 2 of 2011 - Prudential Standard LPS 700 - Friendly Society Benefit Funds
Single bank accounts for approved benefiSingle bank accounts for approved benefit funds
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Single bank accounts for approved benefit funds
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A friendly society may only maintain a “single bank account” for money that constitutes assets of two or more approved benefit funds, as allowed under section 16H(4) of the Act, where it complies with paragraphs 26 to 31.
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In respect of a single bank account, a friendly society must:
(a) establish a benefit fund account in the records of each approved benefit fund; and
(b) establish a control account in the records of the friendly society that records all the transactions in the bank account; and
(c) reconcile the aggregate of the benefit fund accounts kept in the records of each approved benefit fund with the control account.
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In respect of a single bank account, a friendly society must ensure that the benefit fund account records all drawings from, and receipts by, the bank account to the extent that they relate to the respective approved benefit funds.
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In respect of a single bank account, a friendly society must allocate to the approved benefit funds:
(a) income received from the bank account equitably in accordance with their interest in the bank account; and
(b) any costs to the benefit funds in accordance with their interest in the bank account.
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Subject to paragraphs 30 and 31 the balancing between benefit fund accounts and the control account must be reconciled at least once every seven days, or at such other time as permitted by APRA.
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In respect of a single bank account relating to unitised contracts, a friendly society must carry out the reconciliation referred to in paragraph 29 at least as frequently as when the unit prices relevant to the contract concerned are quoted, but in any event, at least once every seven days or at such other time as permitted by APRA.
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In the case of a single bank account investment in respect of which a friendly society conducts a mark to market exercise on a more frequent basis than once every seven days, the reconciliation referred to in paragraph 29 must be carried out as least as frequently as the mark to market exercise.