Section EY 12 — Income Tax Act 2007: Meaning of life reinsurance

EY 12 Meaning of life reinsurance Meaning (1) Life reinsurance — (a) means a contract of insurance between a life insurer and another person ( person C ) under which the life insurer is secured, fully or partially, against a risk by person C: (b) does not include a contract that— (i) secures against financial risk unless, in the contract, it is incidental to securing against life risk: (ii) is, or is part of, a tax avoidance arrangement. “ Fully ” and “ partially ” (1B) The words “ fully ” and “ partially ” describe the extent to which the life insurer is secured against life risk; they do not describe the term for which the reinsurance is provided. Full reinsurance (2) The life insurer has full reinsurance if all the following apply: (a) the life insurer offered or was offered or entered into a life insurance policy or policies,— (i) in the case of a life insurer resident in New Zealand, as part of their business of providing life insurance; or (ii) in the case of a life insurer not resident in New Zealand, as part of their New Zealand business; and (b) the life insurer holds a life reinsurance policy or policies covering every life insurance policy described in paragraph (a); and (c) the life insurer is fully secured against liability under the life insurance policy or policies by the life reinsurance policy or policies; and (d) the life insurer offered or was offered or entered into the life reinsurance policy or policies in New Zealand. Partial reinsurance (3) The life insurer has partial reinsurance if all the following apply: (a) the life insurer— (i) holds a life reinsurance policy or policies fully securing them against liability for 1 or some, but not all, of the life insurance policies described in paragraph (b); or (ii) holds a life reinsurance policy or policies for all the life insurance policies described in paragraph (b) but only partially securing them against liability; or (iii) holds a life reinsurance policy or policies partially securing them against liability for 1 or some, but not all, of the life insurance policies described in paragraph (b); and (b) the life insurer offered or was offered or entered into the life insurance policy or policies covered by the life reinsurance policy or policies,— (i) in the case of a life insurer resident in New Zealand, as part of their business of providing life insurance; or (ii) in the case of a life insurer not resident in New Zealand, as part of their New Zealand business; and (c) the life insurer offered or was offered or entered into the life reinsurance policy or policies in New Zealand. Exclusion: financial arrangements and general insurance (4) To the extent to which a contract is a financial arrangement or is insurance that secures a life insurer against liability that arises from insurable events other than death or survival of a human being, that contract is not life reinsurance. Other definitions (5) In this Act,— life financial reinsurance is a contract that may be life reinsurance under subsection (1)(a), but is not included under subsection (1)(b) financial risk –– (a) means risk, whether or not specific to a party to the relevant arrangement relating to risk, that is contingent on a valuation or disposal of financial arrangements, or contingent on profitability or creditworthiness, or contingent on a variable such as future expenditure: (b) does not include life risk life reinsurer means a person in the position of person C. Relationship with subject matter (6) Section EZ 62 (Reinsurance transition: life financial reinsurance may be life reinsurance) overrides this section. Defined in this Act: business , financial arrangement , financial risk , full reinsurance , life financial reinsurance , life insurance , life insurance policy , life insurer , life reinsurance , life reinsurance policy , life reinsurer , New Zealand business , offered or was offered or entered into , partial reinsurance , resident in New Zealand , Compare: 2004 No 35 s EY 11 Section EY 12(1) heading: substituted, on 1 July 2010, by section 189(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(1): substituted, on 1 July 2010, by section 189(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(1B) heading: inserted, on 1 July 2010, by section 189(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(1B): inserted, on 1 July 2010, by section 189(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(4) heading: substituted, on 1 July 2010, by section 189(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(4): substituted, on 1 July 2010, by section 189(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(5) heading: added, on 1 July 2010, by section 189(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(5): added, on 1 July 2010, by section 189(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(6) heading: added, on 1 July 2010, by section 189(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12(6): added, on 1 July 2010, by section 189(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12 list of defined terms financial arrangement : inserted, on 1 July 2010, by section 189(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12 list of defined terms financial risk : inserted, on 1 July 2010, by section 189(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 12 list of defined terms life financial reinsurance : inserted, on 1 July 2010, by section 189(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).