Jane Dotson
A statutory fund is a fund that is established in the records of a life company and relates solely to the life insurance business of the company or a particular part of that business. The Life Insurance Act 1995 outlines the requirements of statutory funds, stating that any amounts received by a life insurance company regarding the business of a benefit fund can only be allocated to that fund. A life insurance company must have at least one statutory fund in respect of its life business, but may have more if it chooses. The assets of a statutory fund are defined as the balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund.
| Characteristics | Values |
|---|---|
| Definition | A statutory fund is a fund that is established in the records of a life company and relates solely to the life insurance business of the company or a particular part of that business |
| Number of funds | A life insurance company must have at least one statutory fund but may have more if it so chooses |
| Assets | The balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund |
| Maintenance | The fund must be maintained separately from other funds and records must be kept for the income and outgoings of each fund |
| Restructuring or termination | Statutory funds may not be restructured or terminated without APRA approval |
What You'll Learn
- Statutory funds are established in the records of a life company
- Statutory funds are related to the life insurance business of the company
- Statutory funds cannot be restructured or terminated without APRA approval
- Statutory funds are defined by the balance of money in the fund, assets of the company, and investments
- Statutory funds are not to be commingled with other funds
Statutory funds are established in the records of a life company
A life insurance company must have at least one statutory fund in respect of its life business, but it may have more if it chooses. Statutory funds may not be restructured or terminated without APRA approval. The assets of a statutory fund are defined as the balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund.
The proper maintenance of a statutory fund is taken very seriously and companies must always give preference to the owners and potential owners of policies referable to the fund. Every Act or decision must be taken with priority given to the owners or prospective owners.
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Statutory funds are related to the life insurance business of the company
The proper maintenance of a statutory fund is a serious commitment. The fund must never be commingled with other funds, and statements must be kept for the income and outgoings of each fund. These statements must adequately record the affairs and transactions of the company concerning the classes of life insurance to which the fund relates, the categories of business within each class, and each subcategory of business. The classes of life insurance businesses are divided into the categories of Australian participating business, overseas participating business, and non-participating business.
Statutory funds may not be restructured or terminated without APRA approval. A fund is only to be dealt with in such a way that protects the interests of policyholders and is consistent with prudent management of the fund. Companies have substantial duties concerning statutory funds and must always give preference to the owners and potential owners of policies referable to the fund. Every Act or decision must be taken with priority given to the owners or prospective owners.
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Statutory funds cannot be restructured or terminated without APRA approval
A statutory fund is a fund that is established in the records of a life company and relates solely to the life insurance business of the company or a particular part of that business. The assets of a statutory fund are defined as the balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund. The Life Insurance Act 1995 outlines the requirements of statutory funds, explicitly stating that any amounts received by a life insurance company regarding the business of a benefit fund can only be allocated to that fund.
The proper maintenance of a statutory fund is a serious commitment that must be kept separate from other funds. Adequate records must be kept for the income and outgoings of each fund, and the affairs and transactions of the company concerning the classes of life insurance to which the fund relates must be recorded. The classes of life insurance businesses are divided into the categories of Australian participating business, overseas participating business, and non-participating business.
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Statutory funds are defined by the balance of money in the fund, assets of the company, and investments
A statutory fund is a fund that is established in the records of a life company and relates solely to the life insurance business of the company or a particular part of that business. The assets of a statutory fund are defined as the balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund.
The proper maintenance of a statutory fund is important, and it should never be commingled with other funds. Companies must keep statements for the income and outgoings of each fund and adequately record the affairs and transactions of the company concerning the classes of life insurance to which the fund relates, the categories of business within each class, and each subcategory of business. The classes of life insurance businesses are divided into the categories of Australian participating business, overseas participating business, and non-participating business.
A life insurance company must have at least one statutory fund in respect of its life business but may have more if it so chooses. Companies have substantial duties concerning statutory funds and must always give preference to the owners and potential owners of policies referable to the fund. Every Act or decision must be taken with priority given to the owners or prospective owners.
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Statutory funds are not to be commingled with other funds
A statutory fund is a fund that is established in the records of a life company and relates solely to the life insurance business of the company or a particular part of that business. A life insurance company must have at least one statutory fund in respect of its life business but may have more if it so chooses.
The assets of a statutory fund are defined as the balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund.
The proper maintenance of a statutory fund, never commingled with other funds, is a commitment that must be taken seriously. Statements must be kept for the income and outgoings of each fund and adequately record the affairs and transactions of the company concerning the classes of life insurance to which the fund relates, the categories of business within each class, and each subcategory of business. The classes of life insurance businesses are divided into the categories of Australian participating business, overseas participating business, and non-participating business.
The Act outlines the requirements of statutory funds, explicitly spelling out that any amounts received by a life insurance company regarding the business of a benefit fund can only be allocated to that fund.
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Frequently asked questions
A statutory fund is a fund that is established in the records of a life company and relates solely to the life insurance business of the company or a particular part of that business.
The assets of a statutory fund are the balance of money in the fund, assets of the company gained as a result of an expenditure of the fund, investments held by the company as a result of expenditure from the fund, and any other money, investments or assets transferred to the fund.
The Life Insurance Act 1995 outlines the requirements of statutory funds, explicitly spelling out that any amounts received by a life insurance company regarding the business of a benefit fund can only be allocated to that fund. It also states that a life insurance company must have at least one statutory fund in respect to its life business.
The proper maintenance of a statutory fund is that it is never commingled with other funds. Statements must be kept for the income and outgoings of each fund and adequately record the affairs and transactions of the company concerning the classes of life insurance to which the fund relates, the categories of business within each class, and each subcategory of business.
