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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions - Expected death strain formulas

EZ 58: Expected death strain formula (life): when partial reinsurance exists

You could also call this:

“Adjusting life insurance calculations when partial reinsurance is involved”

If you’re a life insurer and you have partial life reinsurance, you need to follow a special rule when using the expected death strain formula for life insurance. When you’re working out the ‘opening sum assured’, you have to subtract the amount of money you would get from your reinsurance policy. This amount is what the reinsurance company would pay you if the person covered by your life insurance policy died. By doing this, you’re making sure you only count the part of the insurance that you’re actually responsible for.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3112421.

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Money and consumer rights > Taxes
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EZ 57: Expected death strain formulas: when annuity payable on survival to date or age specified in policy, or

“Calculating insurance payouts for living to a specific age or date”

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Part E Timing and quantifying rules
Terminating provisions: Expected death strain formulas

EZ 58Expected death strain formula (life): when partial reinsurance exists

  1. This section applies when a life insurer has partial life reinsurance.

  2. In using the expected death strain formula (life), the life insurer must reduce opening sum assured by the claim receivable by the life insurer under the life reinsurance policy for the contingency against which the life insured is covered under the life insurance policy.

Notes
  • Section EZ 58: inserted, on , by section 199(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).