75Principles for working out premiums—Act, s 145J (c)

75 Principles for working out premiums—Act, s 145J (c) (1) It is a condition of an insurer licence that, in working out premiums, an insurer must— (a) provide for sufficient (but not excessive) income from premiums to fully fund liabilities arising from policies of insurance to which the premiums relate; and (b) ensure that premiums are structured to minimise, as far as reasonably practicable, the cross subsidisation of premium rating groups. (2) For this section, there is sufficient income from premiums to fully fund the liabilities to which the premiums relate if the premiums are sufficient to do all of the following: (a) fully fund claims liabilities arising from the insurance policies to which the premiums relate; Conditions on insurers Division 9.2 Section 76 (b) pay all acquisition, policy administration and claims settlement expenses of the insurer; (c) provide a profit margin after the payment of claims, costs and expenses that represents an adequate return on capital invested and compensation for the risk taken; (d) provide for anything else that a prudent insurer should, in the circumstances, provide for; (e) provide for contributions or other charges payable by the insurer under the Act. (3) For subsection (2) (a), the amount of claims liabilities of the insurer does not include the treatment, care and support costs of a participant in the LTCS scheme. Note LTCS scheme—see the LTCS Act, dictionary. (4) An insurer is taken to have complied with subsection (1) (a) if the insurer provides for sufficient (but not excessive) income from premiums in accordance with actuarial advice about the liability arising from policies of insurance to which the premiums relate.