Future Premiums


This Chapter applies to with-profits policies, except accumulating with-profits policies written on a recurring single premium basis.


A future premium must not exceed the lower of the value of:

  1. (1) the actual premium payable under the contract; and
  2. (2) the net premium, which may be increased for deferred acquisition costs in accordance with 12.1.


Where the terms of a contract of insurance have changed since it was first entered into, a firm must, in determining the net premium for the purpose of 11.2(2), treat that change as if either:

  1. (1) it had been included in the original contract but came into effect from the time the change became effective; or
  2. (2) the original contract were cancelled and replaced by a new contract (with an initial premium paid on the new contract equal to the liability under the original contract immediately prior to the change); or
  3. (3) subject to 11.4, it gave rise to two separate contracts where:
    1. (a) all premiums are payable under the first contract and that contract provides only for such benefits as those premiums could have purchased from the firm at the date the change became effective; and
    2. (b) no premiums are payable under the second contract and that contract provides for all the other benefits.


For the purposes of 11.3(3), a firm must not treat the change referred to in 11.3 as giving rise to two separate contracts unless a meaningful comparison can be made between the terms of the contract (as changed) and the terms upon which the firm was newly effecting contracts of insurance at the time the contract was changed.