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Commonwealth legislation
This Act has been repealed and is no longer in force. It is retained for historical reference.
Mechanically, these Regulations set the technical rules life insurers must follow: what security and bank guarantees count as deposits, how paid-up policies and surrender values are calculated, which mortality tables to use, and the exact statistical returns and forms companies must file. They bind life insurance companies, banks providing guarantees, the Treasurer (as deposit recipient) and the Commissioner (as regulator). This matters because it fixes how insurers value contracts and reserves, who bears compliance costs, what data is reported, and the Treasury’s access to deposited security.
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Direct links to the current provisions in Life Insurance Regulations.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
STATUTORY RULES.
1946. No. 101.
REGULATIONS UNDER THE LIFE INSURANCE ACT 1945.*
I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the Life Insurance Act 1945.
Dated this twelfth day of June, 1946.
HENRY
Governor-General.
By His Royal Highness’s Command,
J. B. CHIFLEY
Treasurer.
.
LIFE INSURANCE REGULATIONS.
Part I.—Preliminary.
Citation.
Parts.
Part I.—Preliminary
Part II.—Deposits
Part III.—Paid-up Policies, Surrender Values and Non-Forfeiture.
Part IV.—Statistics
Part V.—Miscellaneous
Interpretation.
3.—(1.) In these Regulations, unless the contrary intention appears—
“the Act” means the Life Insurance Act 1945.
(2.) Any reference in these Regulations to a form shall be read as a reference to a form in the Schedule to these Regulations.
Part II.—Deposits.
Bank guarantees.
Fixed deposits.
* Notified in the Commonwealth Gazette on 13th June, 1946.
2864.—Price 1s.
in the name of any other person and bearing an endorsement, signed by that person, transferring the fixed deposit to “the Treasurer of the Commonwealth”.
Deposits in capital cities.
6.—(1.) Money or approved securities required to be deposited in pursuance of the Act may be deposited at the Commonwealth Sub-Treasury in any State capital city.
(2.) Every company which so deposits money or approved securities shall be entitled to obtain from the Accountant, Commonwealth Sub-Treasury, in the State capital city in which the deposit is made, pending the issue of a certificate in pursuance of section thirty-one of the Act, a receipt specifying the nature and amount or value of the money or securities deposited.
Method of valuing land.
Part III.—Paid-up Policies, Surrender Values and Non-Forfeiture.
Modifications of provisions of Act in case of certain policies.
(a) Family Income Policies—
(i) If a policy provides income or other additional life insurance benefits so that the amount payable (exclusive of bonuses) in the event of death within a specified term dating from the commencement of the policy exceeds the amount payable (exclusive of bonuses) in the event of death after the expiry of the specified term (which latter amount is hereinafter referred to as the basic sum insured), the paid-up policy to which the policy owner is entitled shall be payable on the same contingencies as the basic sum insured only, and shall not carry such additional benefits, but the amount of the paid-up policy shall be adjusted in accordance with subparagraphs (ii) and (iii) of this paragraph.
(ii) The paid-up policy in respect of the basic sum insured only shall be increased or decreased by a sum bearing the same proportion to 90 per centum of the value of the additional benefits as the sum of One pound bears to the present value (at the attained age of the person whose life is insured) of the reversion in the sum of One pound according to the contingency upon which the basic sum insured under the original policy was payable.
(iii) For the purposes of the last preceding subparagraph, the value of the additional benefits shall be ascertained in accordance with rules 3, 4 and 5 of the Rules in Part I. of the Sixth Schedule to the Act, as though the additional benefits were a policy for the purpose of those rules.
(b) Policies which include certain Additional Benefits:—If a policy includes provision for a benefit payable in an event other than death or survival, or a benefit payable in the event of death by accident or specified sickness only (either or both of which benefits are hereinafter referred to as additional benefits), the paid-up policy to which the policy owner shall be entitled shall be calculated in accordance with the rules set out in Part I. of the Sixth Schedule to the Act. For the purpose of that calculation the additional benefits shall be ignored, and the paid-up policy shall not provide any part of the additional benefits.
(c) Option Policies:—If a policy contains provision for the contract there under to be varied at the option of the owner of the policy on a specified date or on the happening of a specified event and the policy owner becomes entitled to a paid-up policy before that option has been exercised, the paid-up policy to which the policy owner shall be entitled shall be that to which he would be entitled if the policy did not include provision for that optional variation.
(d) Altered Ordinary Policies:—In cases where, since the issue of any ordinary policy, the contract thereunder has been varied at the request of title policy owner in such a manner that either the date upon which the sum insured becomes payable, or the term during which premium payments are to be made, or both, have been altered, then the following rules shall apply to the calculation of a paid-up policy:—
(i) In these rules, the “date of variation” means the date on which the first premium under the varied contract fell due.
(ii) The paid-up policy in respect of the original contract under the policy shall be calculated according to the Rules set out in Part I. of the Sixth Schedule to the Act, as at the day before the date of variation.
(iii) An adjusted paid-up policy shall be calculated as at the date of variation by taking the sum which bears the same proportion to the paid-up policy under the original contract as the value of the reversion in the sum of One pound according to the contingency upon which the sum insured under the original contract was payable bears to the reversion in the sum of One pound according to the contingency upon which the sum insured under the policy is payable after the date of variation.
(iv) From the total sum insured under the policy after the date of variation there shall be deducted the amount of the adjusted paid-up policy calculated according to rule (iii). The sum so ascertained shall be known as “the premium-bearing sum insured”.
(v) There shall be calculated, as at the date at which it is required to ascertain the paid-up policy in respect of the varied policy, the paid-up policy that would be applicable to a policy effected on the date of variation under the conditions relating to the contract as varied and having a sum insured equal to the premium-bearing sum insured, but for the purposes of determining—
(1) whether a sufficient number of premiums have been paid to entitle the policy owner to a paid-up policy; and
(2) the appropriate percentage to apply in any calculation made by Rule 1 of Part I. of the Sixth Schedule to the Act,
but only for such purposes, the period for which premiums have been paid shall be assumed to date from the date of the original policy.
(vi) The total paid-up policy in respect of a varied policy shall be the sum of the adjusted paid-up policy calculated according to rule (iii) and the paid-up policy in respect of the premium-bearing sum insured, calculated according to rule (v).
(vii) Rule 5 of the Rules set out in Part I. of the Sixth Schedule to the Act shall apply to the calculations in respect of varied policies.
(e) Policies providing for Endowment Insurance Payable in Instalments with Level Premiums until last Instalments is Paid:—If an endowment insurance policy provides for payment of the sum insured by instalments at intervals and for any unpaid balance at death, premiums being payable at a level rate until the final balance of sum insured has been paid, the paid-up policy value of such a policy shall be calculated according to Rule 2 instead of Rule 1 of the Rules set out in Part I. of the Sixth Schedule to the Act.
(f) Paid-up Policies:—Where a policy has been rendered paid-up (whether by the grant of a paid-up policy as required by the Act or otherwise) and a calculation of the surrender value of the policy is subsequently required to be made, the calculation shall be made according to the Rules set out in Part II. of the Sixth Schedule of the Act, and the amount of the paid-up policy of which the present value is to be found in terms of Rule 1 of those Rules shall be the actual amount of the paid-up policy.
Mortality table.
(a) The British Offices Life Table (1893), aggregate table, known as the OM Table; or
(b) The ultimate table referred to in paragraph (b) of rule (1.) in the Fourth Schedule to the Act and known as the A1924-29 Table.
Election of Mortality Table for ordinary policies.
(a) elect to use, in respect of its ordinary policies, one of the tables of mortality prescribed by regulation 9 of these Regulations;
(b) when making application for registration under the Act, notify the Commissioner, in writing, of the table of mortality which it elects to use; and
(c) use such table, in respect of its ordinary policies, for all purposes for which the use of a table of mortality is required by the Sixth Schedule to the Act.
Interest on overdue premiums on ordinary policies.
Part IV.—Statistics.
Statistics to be collected.
Additional annual return of policies.
13.—(1.) Every company shall, in respect of each financial year of the company, prepare, in accordance with Form 3—
(a) returns in respect of its ordinary life insurance business in Australia; and
(b) returns in respect of its industrial insurance business in Australia,
including in each return the appropriate portion of any sinking fund business and continuous disability insurance business irrespective of whether separate statutory funds have been set up for those businesses.
(2.) The returns specified in paragraph (a), and the returns specified in paragraph (b), of the last preceding sub-regulation shall comprise—
(a) a separate return in respect of the register or registers maintained by the company in respect of each State or Territory; and
(b) a return in respect of all the registers maintained by the company in Australia.
(3.) Items in Form 3 shall be shown after deduction of amounts in respect of reinsurances of the risks of the company.
(4.) Items in Parts I. and II. of returns in Form 3 shall be shown exclusive of bonus additions.
(5.) For the purpose of the items headed “Bonus Additions” and “Annual Premiums” in Part III. of any return in Form 3, a company may, if any such item is not ascertainable from the records maintained by the company, ascertain the item by method of apportionment based on sums insured under policies of the type to which the item relates.
(6.) The following amounts shall not be included in the Items designated “Sum Insured” in Form 3:—
(a) Benefits, other than the basic sum insured, attaching to Family Income Policies;
(b) Benefits payable on death by accident or specified sickness only; and
(c) Continuous disability insurance benefits.
(7.) A note shall be added to Part I. and Part III. of returns in Form 3 stating what types of policy have been included on the lines entitled “Other Insurance”.
(8.) Items in Part I. of returns in Form 3 shall not include policies in respect of proposals which have been accepted by the company but on which the first premium has not been paid.
(9.) The following rules shall apply to the preparation of Part II. of returns in Form 3:—
(a) Items on the lines entitled “Transfer” shall be the net loss or gain to the appropriate register resulting from transfers between various registers during the year;
(b) Where a policy has acquired a surrender value, and lapses after having had one or more overdue premiums advanced out of that surrender value, the particulars of the policy shall be shown on the line entitled “Surrender” and not on the line entitled “Forfeiture”;
(c) A note shall be added stating the main types of transactions which have been included on the lines entitled “Other Causes”; and
(d) Where a policy has been re-instated, the necessary entries shall be treated as deductions from the figures relating to the cause under which the policy was discontinued.
Additional annual financial returns.
14.—(1.) Every company shall, in respect of each financial year of the company, prepare, in accordance with Form 4—
(a) a return in respect of its ordinary life insurance business in Australia; and
(b) a return in respect of its industrial insurance business in Australia,
including in each return the appropriate portion of any sinking fund business and continuous disability insurance business irrespective of whether separate statutory funds have been set up for those businesses.
(2.) Items in returns in Form 4 shall be shown after deduction of amounts in respect of reinsurances of the risks of the company.
Additional annual return of assets.
15.— (1.) Every company shall, in respect of each financial year of the company, prepare, as at the expiration of that year, a return in accordance with Form 5 in respect of its business in Australia.
(2.) The particulars required to be inserted in Part I. of returns in Form 5 in respect of any State or Territory shall be particulars of the following:—
(a) In the case of mortgages—those mortgages which are in respect of property in that State or Territory;
(b) In the case of loans on policies—those loans which are made on policies on registers of the company maintained in respect of that State or Territory; and
(c) In the case of other loans—those loans which are made to residents in that State or Territory at the time when the loan is made.
Special annual return as at 30th June.
16.—(1.) Every company, including a company whose financial year ends on the thirtieth day of June, shall, as at the thirtieth day of June in each year, prepare a return in accordance with Form 6.
(2.) Items shown in a return under this regulation shall be the balances according to the
This is an opening excerpt, not the complete document.