Commonwealth Consolidated Regulations

INSURANCE CONTRACTS REGULATIONS 2017 - REG 38

  (1)   For the purposes of subsection   57(3) of the Act, the rate applicable to a day in respect of which interest is payable by an insurer, is the rate worked out under the following formula:

where:

"Y" is the rate of:

  (a)   10 - year Bond yield at the end of the half - financial year ending in the period that, in relation to the withheld amount, is mentioned in subsection   57(2) of the Act, or

  (b)   if more than one half - financial year has ended during that period--the mean of the rates of the 10 - year Bond yield at the end of each of those half - financial years; or

  (c)   if no half - financial year has ended during that period--the 10 - year Bond yield at the end of the half - financial year immediately preceding the commencement of that period.

  (2)   In subsection   ( 1) :

"10-year Bond yield" means the rate known as the 10 - year Australian Government Bond yield, published by the Reserve Bank of Australia.

"mean" , in relation to rates, means, if the mean of the rates is not a whole number, or does not end in .75, .50 or .25, the mean rate rounded to the nearest lower quarter of 1%.