Document ID: chunk:federal_register_of_legislation:F2023L00717:body:0:p33
Version: federal_register_of_legislation:F2023L00717
Segment Type: other
Provision Reference: 
Character Range: 130116–133139

the (decrease) in EFCF (non-PRP portion) associated with the release of current year policyholder profit from EFCF (non-PRP portion) to EFCF (PRP portion). It reflects total policyholder profit allocated to EFCF (PRP portion) excluding the profits that are recognised in the following items:

               * interest and expense items that impact EFCF (PRP portion) (reported in A4.1, A4.2, A4.3 and A4.4);
               * experience adjustments (reported in A5.2); and
               * changes in estimates that do not adjust CSM and adjustments to LIC (reported in A6.3).
           The amount is determined by applying a factor to CSM and RA release reported in A8.1. The factor depends on the relevant policyholder and shareholder profit allocation percentages.

           Show the impact that allocating profit to EFCF (PRP portion) has on EFCF (non-PRP portion). The offsetting impact on EFCF (PRP portion) is reported in A8.4.

           Releasing policyholder profit decreases EFCF (non-PRP portion).
Item A8.4  Report allocation to EFCF (PRP portion) due to A8.3.

           This is the amount allocated to EFCF (PRP portion) due to A8.3.

           Allocating a policyholder profit increases EFCF (PRP portion).

9. Impact of bonus distributions

Item A9.1  Report interim and terminal bonus distributions from EFCF (PRP portion), AASB 17 SRPP, AASB 17 SRP (overseas par), AASB 17 SRPN and share capital.

           This is the amount of interim and terminal bonus distributed from EFCF (PRP portion), AASB 17 SRPP, AASB 17 SRP (overseas par), AASB 17 SRPN and share capital.

           While bonus distributions are typically made from PRP, sections 62 and 63 of the Life Act do allow shareholder retained profits and capital to be distributed to participating policy owners.

           For distributions from AASB 17 SRPN and share capital, they could be sourced from within the statutory fund or outside of the statutory fund (i.e. from other funds). Deductions to AASB 17 SRPN and share capital relating to those distributions are to be reported under LRS 340.2.

           Bonus distributions decrease EFCF (PRP portion), AASB 17 SRPP, AASB 17 SRP (overseas par), AASB 17 SRPN and share capital.
Item A9.2  Report impact of interim and terminal bonus offset on EFCF (non-PRP portion) and RA.

           This item has been included so that life insurers can offset the interim and terminal bonus payments that were reported within A2.2, A2.3 and A2.4 (claim payments).

           If the interim and terminal bonus payments are not offset, they would be double counted (within the claims outflow from EFCF (non-PRP portion) and as retained profit distributions from EFCF (PRP portion)) and profit reporting would not follow the Life Act profit allocation percentages.

           This is the amount of increase in EFCF (non-PRP portion) and RA needed to offset interim and terminal bonus reported as claim payments.

           Interim and terminal bonus offsets increase EFCF (non-PRP portion)