Document ID: chunk:federal_register_of_legislation:F2023L00208:reg:4
Version: federal_register_of_legislation:F2023L00208
Segment Type: reg
Provision Reference: reg 4
Character Range: 40162–45479

4      Altered               A policy under which the contract of insurance (the original contract) is varied, at the request of the policy owner, by a change to:                                                    4.1 The minimum paid-up value is:

                             (a)  the date on which the sum insured is payable; or                                                                                                                                    where:
                             (b)  the term during which premiums are payable.

                                                                                                                                                                                                                      (a)  APUV is the amount of the adjusted paid‑up policy at the date of variation, being an amount calculated as follows:

                                                                                                                                                                                                                        where:

                                                                                                                                                                                                                      (i)      PUV is the value of the paid‑up policy under the original contract, calculated according to Attachments 1 and 2 of this Prudential Standard, as at the day before the date of variation.
                                                                                                                                                                                                                      (ii)    AO is the present value, as at the attained age, of $1 of sum insured according to the contingencies upon which the sum insured under the original contract was payable.
                                                                                                                                                                                                                      (iii)  AA is the present value, as at the attained age, of $1 of sum insured according to the contingencies upon which the sum insured under the original contract, as varied, on the day after the date of variation, is payable.
                                                                                                                                                                                                                      (b)  PBPUV is the amount of the paid‑up policy, calculated as if:
                                                                                                                                                                                                                      (i)      the policy came into effect on the date of variation;
                                                                                                                                                                                                                      (ii)    the sum insured under the policy is the premium bearing sum insured (PBSI) calculated as the total sum insured under the original contract, as varied, on the day after the date of variation, less APUV; and
                                                                                                                                                                                                                      (iii)  PBSI is payable on the same contingencies upon which the total sum insured under the original contract, as varied, on the day after the date of variation, is payable.
                                                                                                                                                                                                                        4.2       For the purposes only of:

                                                                                                                                                                                                                      (a)   subsection 209 (1) of the Act; and
                                                                                                                                                                                                                      (b)  the definition of 'Factor' in Attachments 1 and 2 of this Prudential Standard, the period for which premiums have been paid under the policy is taken to have started on the date of the original contract.
                                                                                                                                                                                                                      4.3 For the purposes of subitem 4.1, 'the date of variation' means the date on which the first premium is payable under the original contract, as varied.

                                                                                                                                                                                                                      4.4 The minimum termination value is calculated according to Attachment 2.