Document ID: chunk:federal_register_of_legislation:F2017L00636:body:0:p6
Version: federal_register_of_legislation:F2017L00636
Segment Type: other
Provision Reference: 
Character Range: 12426–15257

case of the product being continued for the second year at a reduced policy cost—the percentage of the adjusted benefit that is equal to the percentage by which the policy cost (determined immediately before and immediately after the reduction) has been reduced; and
           (c) in the case of a reduction in policy cost referred to in paragraph (6)(c)—the percentage of the adjusted benefit that is equal to the percentage by which the policy cost (determined immediately after the reduction) has been reduced below the initial second year policy cost.
              Note1:  For example, for a benefit of $100 that was provided because of a client initiated increase, if the initial second year policy cost were $1,000 and the policy cost were reduced to $800, the amount of the acceptable repayment would be 20% of $100 = $20.
              Note 2: Where there is a benefit (issue benefit) provided in relation to the issue of the product, a further benefit (increase benefit) provided because of a client initiated increase in the first year and the policy cost is then reduced in the second year and within 12 months of the client initiated increase, subsections (6) to (9) apply in relation to the increase benefit and subsections (10) to (13) in relation to the issue benefit.
(8) In subsection (7), adjusted benefit means the benefit less the aggregate of any acceptable repayments in relation to the benefit resulting from any previous applications of subsection (3).
(9) If there have been any previous applications of subsection (6) in relation to the benefit, the amount of the acceptable repayment determined under subsection (7) is reduced by the aggregate of the acceptable repayments resulting from the previous applications of subsection (6).
           Note: Each application of subsection (6) gives rise to a separate acceptable repayment amount.
    Acceptable repayment for other first year benefits where trigger event in second year—60% clawback
(10) The amount worked out in accordance with subsections (11) and (13) is an acceptable repayment in relation to a benefit given for the first year in relation to circumstances where:
           (a) any of the following occur:
              (i) the product is cancelled or not continued during the second year;
              (ii) the product is continued for the second year at a reduced policy cost;
              (iii) if the benefit was given because of a client initiated increase—there is a reduction in the policy cost 12 months after the date of the client initiated increase;
              (iv) the policy cost for the product for the second year is reduced to an amount that is less than the policy cost (initial second year policy cost) for the product for the second year as determined at:
                  (A) if the benefit was not given because