Commonwealth Consolidated Acts

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LIFE INSURANCE ACT 1995 - SECT 59

Allocation of operating profit etc.

  (1)   A life company must allocate all of the operating profit or loss of a category of business of a statutory fund for a period.

  (2)   A life company allocates an operating profit for a period by identifying in its financial statements prepared as at the end of the period:

  (a)   the amount of the profit; and

  (b)   the amount of the profit that should be treated as, or added to, Australian policy owners' retained profits; and

  (c)   the amount of the profit that should be treated as, or added to, overseas policy owners' retained profits; and

  (d)   the amount of the profit that should be treated as, or added to, shareholders' retained profits (Australian participating); and

  (e)   the amount of the profit that should be treated as, or added to, shareholders' retained profits (overseas and non - participating).

  (3)   A life company allocates an operating loss for a period by identifying in its financial statements prepared as at the end of the period:

  (a)   the amount of the loss; and

  (b)   the amount representing the portion of the loss to be taken into account in reduction of Australian policy owners' retained profits; and

  (c)   the amount representing the portion of the loss to be taken into account in reduction of overseas policy owners' retained profits; and

  (d)   the amount representing the portion of the loss to be taken into account in reduction of shareholders' retained profits (Australian participating); and

  (e)   the amount representing the portion of the loss to be taken into account in reduction of shareholders' retained profits (overseas and non - participating).

  (4)   A life company must allocate to shareholders' capital of a statutory fund all capital payments made to the fund under section   37.

  (5)   A company allocates a capital payment by:

  (a)   identifying in its financial statements prepared as at the end of the period in which the payment was made the amount of the payment; and

  (b)   identifying that amount as an amount that should be added to shareholders' capital.


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