6Maximum percentage of discount

6 Maximum percentage of discount

(1) For subparagraph 66‑5 (1) (c) (ii) of the Act, the maximum percentage discount allowed is 12% per annum.

(2) The discount for a policy is the difference between the full premium and the net premium.

(3) The full premium for a policy is the premium that would be received by the private health insurer for a policy in the same product subgroup without any reduction due to the circumstances set out in paragraphs 66‑5 (3) (a) to (ea) of the Act.

(4) The net premium is the full premium less the cost, or the cost foregone, of any of the following:

(a) incentive payment;

(b) promotional payment;

(c) rebate; and

(d) any other inducement whatsoever,

made available by the insurer to another person, including to an insured person, in respect of the payment of the premium for the policy, including to induce a person to purchase or maintain a policy.

(5) For the purposes of this rule, disregard:

(a) a brokerage fee or commission paid in respect of the policy; and

(b) the cost of any discount, product, service, waiver or other thing (promotion) offered to a person at the time the person first purchases a policy from the insurer if:

(i) the cost of the promotion does not exceed 12% of the full premium, for a year, for the policy purchased; and

(ii) the promotion is provided in the first year after the person purchases the policy; and

(c) any age‑based discount that might apply in relation to the policy (see Part 2A).