Document ID: chunk:federal_register_of_legislation:F2023L00694:body:0:p19
Version: federal_register_of_legislation:F2023L00694
Segment Type: other
Provision Reference: 
Character Range: 49537–51535

the provisions under paragraphs 106 to 107 in relation to service agreements are applicable.
116.     Where an allocation of the expenses of the management fund relating to life insurance activities into expense categories is not undertaken, acquisition expenses must be taken as 50 per cent of the total expenses related to the life insurance business.

Materiality
117.     A life company may take into account materiality when valuing its policy liabilities. Particular values or components are considered material to the overall result of a calculation if misstating or omitting them would produce results likely to be misleading to the users of the information.
118.     For a life company which is not a friendly society, policy liabilities and regulatory capital calculation (including determination of BEL) are subject to materiality standards applied at a statutory fund level.
119.     For a friendly society, policy liabilities, regulatory capital calculation (including determination of BEL), and determination of surplus distribution or allocation are subject to materiality standards applied at a benefit fund level.

Approximate methods
120.     When determining BEL, approximate methods may be used, where the result so produced is not material or not materially different from that which would result from a full valuation process.

Adjustments and exclusions
121.     APRA may, by notice in writing to a life company, adjust or exclude a specific requirement in this Prudential Standard in relation to that life company.

Previous exercise of discretion
122.     A life company must contact APRA if it seeks to place reliance, for the purposes of complying with this Prudential Standard, on a previous exemption or other exercise of discretion made by APRA under a previous version of this Prudential Standard.

[1]  Refer to subsection 21(1) of the Act.
[2]  Refer to section 16ZE and 16ZD of the Act.
[3] Friendly society business is neither participating nor non-participating.