| (1) |
For purposes of compliance with Parts 5A and 5B, an insurer must consider all causal event charges that arose after 1 January 2001. |
| (2) |
When calculating causal event charges in respect of policies referred to in Part SA and Part 5B, an insurer must— |
| (a) |
take into account the cumulative effect on a policy's investment value of charges that have already been deducted in respect of previous causal events; |
| (b) |
on the occurrence of a second or subsequent causal event on a policy, determine the causal event charge for that second or subsequent event by taking into account the cumulative effect of that charge and all prior causal event charges on the policy's investment value; |
| (c) |
ensure that the cumulative effect of multiple causal event charges during the life of a policy does not result in the policy's investment value at any time being reduced by a greater portion than would have been the case if, at the time of the first causal event, the maximum causal event charge has been deducted. |
| (3) |
For purposes of subregulation (2)(b), the calculation of the cumulative causal event charges and the impact on the policy's investment value may take into account the time value of money, but any simplification applied in the calculation methodology may not result in a reduced policy investment value. |
| (4) |
For purposes of subregulation(2)(c), the maximum causal event charge means the lower of— |
| (a) |
the highest charge the insurer applies to any one causal event for the type of policy concerned according to the insurer's actuarial basis; and |
| (b) |
the highest causal event charge, at the time of the first causal event, provided for in Part 5A, Part 5B or for the type of policy concerned. |
| (5) |
In applying the principles in subregulation (2), an insurer must apply the same method of calculation to all policies of the same type. |
| (6) |
An insurer must, where the actuarial basis provides for a charge percentage that is less than the maximum prescribed charges, apply the lesser percentage in calculating causal event charges and in determining their cumulative effect. |
| (7) |
An insurer must, prior to adjusting the actuarial basis for policies to ensure that these bases are not inconsistent with the minimum principles contained in this Part, inform the Authority of the proposed amendment and the reasons therefore. |
[Regulation 5.15 inserted by regulation 6(p) of Notice No. 1437 of 2017]
Housing Consumer Protection Measures Act, 1998
