Document ID: chunk:federal_register_of_legislation:F2024L00884:body:0:p8
Version: federal_register_of_legislation:F2024L00884
Segment Type: other
Provision Reference: 
Character Range: 18599–21396

reduced by the expected proceeds, as agreed in writing by APRA, of a Dividend Reinvestment Plan (DRP) to the extent that dividends are used to purchase new ordinary shares issued by the life company. A life company must review every six months the expected subscription for new ordinary shares under its DRP having regard to experience over previous years and reasonable expectations of the level of subscription that might apply in future. If a life company identifies any material change in the expected level of future subscription for new ordinary shares under its DRP, it must notify APRA and obtain APRA's approval to a new amount by which declared dividends may be reduced for regulatory capital purposes.
36.         Current year earnings include the full value of fee income not sourced from life policies provided that:
(a)          the fee income has either been received in cash or has been debited by the life company to an account to be paid by the provider of the fees or otherwise forms part of the upfront fees owed to the life company;
(b)          outstanding amounts of fee income debited by the life company to the account are claimable in full in the event of default on the amounts receivable, or capable of being sold to a third party as part of outstanding debts;
(c)          the provider of the fee income has no recourse for repayment in part or full of any prepaid income;
(d)          the fees debited by the life company to the account cannot be cancelled by the provider of the fee income where the fees were otherwise obliged to be paid upfront; and
(e)          there is no requirement for the provision of continuing additional services or products associated with the fee income concerned.
37.         Fee income not sourced from life policies may include net positive amounts arising from the netting of deferred or future income and capitalised expenses associated with a product class (not comprising life policies) provided the conditions in paragraph 36 of this Prudential Standard are satisfied. Any deferred income or future income that do not satisfy the conditions in paragraph 36, if not already excluded from current year or retained earnings, must be deducted from Common Equity Tier 1 Capital.
38.         Accumulated other comprehensive income and other disclosed reserves include, but are not limited to:
(a)          unrealised gains or losses recognised on the balance sheet;
(b)          reserves from equity-settled share-based payments (share or share options) granted to employees as part of their remuneration package provided that:
(i)            the share or share options granted relate only to the ordinary shares of the life company;
(ii)         the ordinary shares comprise only new ordinary shares to be issued by the life company,