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 121AO   TREASURY BOND RATE, CAPITAL RESERVE ADEQUACY LEVEL, ELIGIBLE ACTUARY AND SECURITY  

121AO(1)   Treasury bond rate.  

The Treasury bond rate for the applicable accounting day in respect of bonds with a particular term is:


(a) if any Treasury bonds with that term were issued on the applicable accounting day - the annual yield on those bonds; or


(b) in any other case - the annual yield on Treasury bonds with that term, as published by the Reserve Bank of Australia and applicable to the accounting day.

121AO(2)   Capital reserve adequacy level.  

The capital reserve adequacy level for a life insurance company that demutualises is:


(a) if, after 1 July 1995 and before the applicable accounting day mentioned in subsection 121AM(3) or 121AN(4) , a prudential standard made under section 230B of the Life Insurance Act 1995 in relation to capital adequacy applied to the company - the level of capital reserves required by that standard; or


(b) in any other case - the level of capital reserves required to provide adequate capital for the conduct of the life insurance business and other activities of the company.

121AO(3)   Eligible actuary.  

An eligible actuary is a Fellow or Accredited Member of the Institute of Actuaries of Australia who is not an employee of:


(a) the mutual insurance company or, where demutualisation method 7 applies, the mutual insurance company or the mutual affiliate company; or


(b) a subsidiary of that company or, where demutualisation method 7 applies, of either company.

121AO(4)   Security.  

A security is:


(a) a bond, debenture, certificate of entitlement, bill of exchange or promissory note; or


(b) a deposit with a bank or other financial institution; or


(c) a secured or unsecured loan.


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