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Income Tax Act 2007

Timing and quantifying rules - Life insurance rules

EY 7: Meaning of claim

You could also call this:

“What counts as a claim for life insurance payments”

In the rules for life insurers, a claim means the amount that a life insurer must pay under a life insurance policy when the event covered by the policy happens. This can include payments for when someone dies, when a policy matures, cash bonuses, surrendering a policy, annuity payments, or other benefits that aren’t cash.

The amount of a claim can be zero. It doesn’t include money given as an advance against the policy or extra amounts added to the reserves. When figuring out the claim amount, you don’t subtract any advances, unpaid premiums, or interest owed to the insurer.

A claim doesn’t include payments made when a life insurer transfers some or all of its business to someone else.

When you see the phrase “claim arising”, it doesn’t mean the same thing as the definition of “claim” explained here.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515780.

Topics:
Money and consumer rights > Banking and loans
Money and consumer rights > Savings and retirement
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“Explanation of what counts as life insurance for tax purposes”

Part E Timing and quantifying rules
Life insurance rules

EY 7Meaning of claim

  1. In the rules for life insurers, claim—

  2. means the amount that a life insurer is liable to pay under a life insurance policy because the contingency against which the life insured is covered under the policy has occurred; subsections (2) to (5) expand on the amount that a life insurer is liable to pay:
    1. excludes a payment made by a life insurer on the transfer of some or all of its life insurance business:
      1. in the expression claim arising, does not have the meaning given to the word claim in paragraph (a) or (b).

        1. For the purposes of subsection (1)(a), the amount that a life insurer is liable to pay includes—

        2. a payment on the death of a life insured:
          1. a payment on maturity:
            1. a payment of a cash bonus:
              1. a payment on the surrender of a policy:
                1. an annuity payment:
                  1. a benefit other than in cash.

                    1. For the purposes of subsection (1)(a), the amount that a life insurer is liable to pay does not include—

                    2. an advance against the security of the policy; or
                      1. a bonus or other discretionary amount added to the actuarial reserves.

                        1. For the purposes of subsection (1)(a), the amount that a life insurer is liable to pay means the amount before the subtraction of the following amounts payable to the life insurer:

                        2. an advance against the security of the policy; and
                          1. an unpaid premium for the policy; and
                            1. interest on an amount referred to in paragraph (a) or (b).

                              1. For the purposes of subsection (1)(a), the amount that a life insurer is liable to pay may be zero.

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                              Notes
                              • Section EY 7(1) heading: amended (with effect on 1 July 2010), on , by section 54(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                              • Section EY 7(1): amended (with effect on 1 July 2010), on , by section 54(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                              • Section EY 7(1)(b): amended, on , by section 187(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                              • Section EY 7 list of defined terms life insurance rules: repealed (with effect on 1 July 2010), on , by section 54(3) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).