Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-35 - INSURANCE BUSINESS  

Division 320 - Life insurance companies  

Subdivision 320-C - Deductions and capital losses  

Operative provisions

SECTION 320-80   Deduction for certain claims paid under life insurance policies  

320-80(1)    
A *life insurance company can deduct the amounts paid in respect of the *risk components of claims paid under *life insurance policies during the income year.

320-80(2)    
The risk component of a claim paid under a *life insurance policy is:

(a) if:

(i) the policy does not provide for *participating benefits or *discretionary benefits; and

(ii) the policy is neither an *exempt life insurance policy nor a *funeral policy; and

(iii) an amount is payable under the policy only on the death or disability of the insured person;

the amount paid under the policy as a result of the occurrence of that event; or

(b) if the policy provides for participating benefits or discretionary benefits or is an exempt life insurance policy or a funeral policy - nil; or

(c) otherwise - the amount paid under the policy as a result of the death or disability of the insured person less the *current termination value of the policy (calculated by an *actuary) immediately before the death, or the occurrence of the disability, of the person.

320-80(3)    
Except as provided by subsection (1), a *life insurance company cannot deduct amounts paid in respect of claims under *life insurance policies.