INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 9AA - Demutualisation of insurance companies and affiliates  

Subdivision B - Key concepts and related definitions  

SECTION 121AE   DEMUTUALISATION METHODS, THE POLICYHOLDER/MEMBER GROUP AND THE LISTING PERIOD  

121AE(1)   Demutualisation methods 1 to 6.  

There are 6 methods by which the demutualisation of a mutual insurance company, where a mutual affiliate company is not also demutualised, may be implemented that are relevant for the purposes of this Division. They are described in sections 121AF to 121AK as demutualisation methods 1 to 6.

121AE(2)   Demutualisation method 7.  

There is one method by which the demutualisation of both a mutual insurance company and a mutual affiliate company may be implemented that is relevant for the purposes of this Division. It is described in section 121AL as demutualisation method 7.

121AE(3)   Demutualisation methods.  

Each of the methods described in sections 121AF to 121AL is a demutualisation method .

121AE(4)   Policyholder/member group.  

The policyholder/member group , in relation to the demutualisation of a mutual insurance company under any of demutualisation methods 1 to 6, consists of the following persons:


(a) in the case of a mutual insurance company covered by paragraph 121AB(1)(a) - policyholders (other than trustees covered by paragraph (d) or (e)) in the company immediately before the demutualisation;


(b) in the case of any other mutual insurance company - members (other than trustees covered by paragraph (d) or (e)) of the company immediately before the demutualisation;


(c) in any case - any of the following who, in connection with the demutualisation, are entitled to the same rights to shares or the proceeds of the sale of shares as the policyholders (in a paragraph (a) case) or the members (in a paragraph (b) case):


(i) employees of the company or a wholly-owned subsidiary of the company;

(ii) persons who ceased to be such policyholders or members before the demutualisation;

(iii) charities;

(iv) persons who are entitled to the rights because of the death of the policyholders or members;


(d) in any case - each person who satisfies the following requirements:


(i) the person is a member of a regulated superannuation fund (as defined by section 19 of the Superannuation Industry (Supervision) Act 1993 ), other than a standard employer-sponsored member (as defined by subsection 16(5) of that Act);

(ii) the trustee of the fund holds a policy or policies in the mutual insurance company;

(iii) the trustee of the fund is a company that is a wholly-owned subsidiary of the mutual insurance company;

(iv) the person's benefits in the fund consist solely of the proceeds of the policy or policies;

(v) in connection with the demutualisation, the person, rather than the trustee, has the right to shares or the proceeds of the sale of shares in respect of the policy or policies held by the trustee;


(e) in any case - each person who satisfies the following requirements:


(i) the person is the member of a single-member superannuation fund;

(ii) the trustee of the fund holds a policy or policies in the mutual insurance company;

(iii) in connection with the demutualisation, the person, rather than the trustee, has the right to shares or the proceeds of the sale of shares in respect of the policy or policies held by the trustee.

121AE(5)   [Policyholder/member group under demutualisation method 7]  

The policyholder/member group , in relation to the demutualisation of a mutual insurance company and a mutual affiliate company under demutualisation method 7, consists of the following persons:


(a) if the mutual insurance company is covered by paragraph 121AB(1)(a) - policyholders (other than trustees covered by paragraph (e) or (f)) in the mutual insurance company immediately before the demutualisation;


(b) in the case of any other mutual insurance company - members (other than trustees covered by paragraph (e) or (f)) of the company immediately before the demutualisation;


(c) members (other than trustees covered by paragraph (e) or (f)) of the mutual affiliate company immediately before the demutualisation;


(d) any of the following who, in connection with the demutualisation, are entitled to the same rights to shares or the proceeds of the sale of shares as the members:


(i) employees of the mutual insurance company, the mutual affiliate company or a wholly-owned subsidiary of either company;

(ii) persons who ceased to be such members before the demutualisation;

(iii) charities;

(iv) persons who are entitled to the rights because of the death of members;


(e) in any case - each person who satisfies the following requirements:


(i) the person is a member of a regulated superannuation fund (as defined by section 19 of the Superannuation Industry (Supervision) Act 1993 ), other than a standard employer-sponsored member (as defined by subsection 16(5) of that Act);

(ii) the trustee of the fund holds a policy or policies in the mutual insurance company;

(iii) the trustee of the fund is a company that is a wholly-owned subsidiary of the mutual insurance company;

(iv) the person's benefits in the fund consist solely of the proceeds of the policy or policies;

(v) in connection with the demutualisation, the person, rather than the trustee, has the right to shares or the proceeds of the sale of shares in respect of the policy or policies held by the trustee;


(f) in any case - each person who satisfies the following requirements:


(i) the person is the member of a single-member superannuation fund;

(ii) the trustee of the fund holds a policy or policies in the mutual insurance company;

(iii) in connection with the demutualisation, the person, rather than the trustee, has the right to shares or the proceeds of the sale of shares in respect of the policy or policies held by the trustee.

121AE(6)   [Listing period]  

The listing period is the period ending 2 years after the demutualisation resolution day, or at such later time as the Commissioner, before the end of the 2 years, allows.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.