Document ID: chunk:federal_register_of_legislation:F2023L00599:body:0:p6
Version: federal_register_of_legislation:F2023L00599
Segment Type: other
Provision Reference: 
Character Range: 15041–18185

of 'Death', 'TPD', 'Trauma' and 'DII'.

Refer to LRS 750.0 for the definitions of 'Group' and 'Individual'.

Stepped premium policies are the policies where premiums increase each year according to risk factors (i.e. age). Other individual policies are the individual policies that are not stepped premium policies (e.g. level premium policies and hybrid stepped premium policies). For a reinsurer, determination of whether the premium structure of a reinsurance contract issued is stepped or non-stepped must be based on the premium structure of the treaty, and not based on the premium structure of the underlying risks written by the cedants.

    5.2.      Friendly Societies

Ref.  Product Group                                     Notes

F1     Education

F2     Investment Account                                 As defined in section 14 of the Life Insurance Act 1995.

F3     Annuity and Superannuation

F4     Defined Benefit Risk                               All products classified as defined benefit, including defined benefit funeral products

F5     Capital Guaranteed Defined Contribution Funeral    Capital guaranteed funeral products that are classified as Defined Contribution.

F6     Investment Linked                                  As defined in section 14 of the Life Insurance Act 1995.

F7     Unallocated Benefit Fund Reserve                   Value of benefit funds which has not been allocated to either the benefit fund members or to management fund.

F8     Members' Capital and Retained Profits              Members' capital and retained profits allocated to members.

The classification of participating and non-participating benefits does not apply to friendly societies.

   6.        Principles for allocating AASB 17 Insurance Contracts (AASB 17) numbers to APRA product groups (life insurers)

Life insurers are to apply the allocation principles (outlined below) to allocate AASB 17 numbers to APRA product groups (outlined under section 5) where it is not possible to clearly identify AASB 17 numbers and assign it to specific APRA product groups.

    * Principle 1: To the extent that AASB 17 balance sheet and income statement items can be readily allocated to APRA product groups, they must be so allocated. Otherwise, the items (including CSM and / or loss component) are to be allocated using allocation approaches. The allocation approaches are to reflect allocation drivers determined based on accounting and / or actuarial judgments. For example, an insurer may decide to determine annual premium income and / or expected claims to be the allocation drivers to allocate AASB 17 items using proportions and / or ratios.

    * Principle 2: A systematic and rational approach must be applied.

    * Principle 3: The approach must be consistent over time. However, an insurer may change the approach if it views that the approach is no longer appropriate based on accounting and / or actuarial judgements.

    * Principle 4: The aggregate of the allocated numbers across APRA product groups must be consistent with AASB 17 numbers reported on a statutory basis.

    * Principle 5: A