Document ID: chunk:federal_register_of_legislation:F2023L00208:front:0:p4
Version: federal_register_of_legislation:F2023L00208
Segment Type: other
Provision Reference: 
Character Range: 8600–11617

the normal investment earnings on the normal ongoing charges in (d) and other charges in (e) and (f).
    15.         A contractual increase in regular premiums must be treated as if it was a separate policy.
    16.         For regular premium policies in force at the date of commencement, the item in subparagraph 14(e) must be reduced, subject to a minimum of zero, to allow for other charges that have already been deducted from the starting amount.
Starting amount

    17.         For a policy issued after the date of commencement, the starting amount is zero.
    18.         For a friendly society, the starting amount for a policy in force at the date of commencement is the 'normal contractual minimum value' at the date of commencement.
    19.         For a life insurer other than a friendly society, the starting amount for a policy in force at the date of commencement is the greater of:
       (a)          the normal contractual minimum value at the date of commencement; and
       (b)          the minimum surrender value at the date of commencement calculated in accordance with the then actuarial standard Transitional Provisions for the Calculation of Paid-Up Values and Surrender Values.
    20.         The normal contractual minimum value is the contractual minimum value adjusted as appropriate by the life company for the effect of any short term performance guarantees applicable at the date of commencement.
Normal investment earnings

    21.         Normal investment earnings are the investment earnings actually credited to policies, net of tax but before deductions for charges and expenses.
    22.         In the case where investment earnings are credited on a vested and non-vested basis, it is the vested investment earning credits which are considered normal for this purpose provided the non-vested investment credits are fully, accurately and clearly identified, including the quantum of the non-vested credit, in the policy documentation and promotional material.
Normal ongoing charges

    23.         Normal ongoing charges are all expenses and charges (whether explicit or implicit) actually levied on the policy with the exception of those charges for the costs associated with the establishment or termination of the policy that are:
       (a)          explicit; or
       (b)          implicitly applied through differential ongoing charges based on duration or time of premium payment; or
       (c)          for a policy issued after the date of commencement that has level ongoing charges throughout the term of the policy plus an explicit charge on establishment or termination, the life company must determine the normal ongoing charges by excluding from the ongoing charge any component, implicit in the basis for pricing the product, associated with the recovery of the costs of establishment or termination. For this purpose, the life company must deduct from the ongoing charges the identified recovery component for a prescribed period of one third of