Section EZ 57 — Income Tax Act 2007: Expected death strain formulas: when annuity payable on survival to date or age specified in policy

EZ 57 Expected death strain formulas: when annuity payable on survival to date or age specified in policy When this section applies (1) This section applies when, and to the extent to which, a life insurance policy provides for the payment of an annuity the start of which is contingent on the life insured’s survival to the relevant date or age specified in the policy. Claim probability (2) In using the relevant expected death strain formula, the life insurer must use claim probability as defined in section EZ 54(4) , without regard to the fact that the payment of the annuity is not contingent on the life insured’s death. Opening sum assured (3) In using the expected death strain formula (life), the life insurer must use as opening sum assured the present value (net) of the annuity. The present value (net) is determined— (a) at the relevant date or age specified in the policy; and (b) on the assumption that the life insured survived to the date or age; and (c) using the same assumptions and bases of calculation as are used to calculate the life insurer’s actuarial reserves for the income year. Defined in this Act: actuarial reserves , income year , life insurance policy , life insured , life insurer , pay , payment present value (net) Section EZ 57: inserted, on 1 July 2010, by section 199(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).