Document ID: chunk:federal_register_of_legislation:F2023L00694:body:0:p6
Version: federal_register_of_legislation:F2023L00694
Segment Type: other
Provision Reference: 
Character Range: 14139–17034

reinsured) of an approved benefit fund must be determined in accordance with Australian Accounting Standards, subject to any variations necessary to meet the requirements in paragraphs 21 to 28 of this Prudential Standard.
21.         Where a policy includes benefits referable to more than one approved benefit fund, or class of life insurance business, a friendly society must unbundle the benefits and treat them as if they were stand-alone policies.
22.         Policy liabilities of an approved benefit fund must be valued as if the benefit fund was a stand-alone entity when the accounting liabilities are determined under Australian Accounting Standards other than AASB 17.
23.         Where the gross life contract liabilities in respect of the policies of an approved benefit fund are determined under AASB 17 with CSM and RA components determined taking into account expected future payments and receipts of the friendly society instead of the benefit fund, the friendly society must:
(a)          determine the gross policy liabilities of the benefit fund in accordance with paragraph 25 or paragraph 26 of this Prudential Standard as applicable; and
(b)          record a policy liability for the management fund, determined as the difference between those gross life contract liabilities and the gross policy liabilities of the benefit fund.
24.         When a friendly society values the gross life contract liabilities of an approved benefit fund under AASB 17 but paragraph 23 of this Prudential Standard does not apply, the gross policy liabilities of the benefit fund must be valued as if the benefit fund was a stand-alone entity.
25.         When paragraph 23 of this Prudential Standard applies in respect of a discretionary benefit fund, the gross policy liabilities of the benefit fund must be valued as if the benefit fund was a stand-alone entity.
26.         When paragraph 23 of this Prudential Standard applies in respect of an approved benefit fund other than a discretionary benefit fund, the gross policy liabilities of the benefit fund must be determined from an apportionment of the gross life contract liabilities in respect of the policies of the benefit fund. The gross policy liabilities of the benefit fund must equal the amount apportioned to the benefit fund. The apportionment must satisfy the following requirements:
(a)          The component of EFCF apportioned to the benefit fund must equal the value that would be determined if the benefit fund was a stand-alone entity. The friendly society must value expected future management fees to be paid from the benefit fund to the management fund as payments. EFCF must include expected future distributions of surplus to members of the benefit fund.
(b)          The component of EFCF apportioned to the management fund must value expected future management fee income from the benefit fund as receipts.