Duties Act 1997 No 123
Historical version for 28 June 2010 to 30 June 2010 (accessed 28 November 2014 at 06:28) Current version
Chapter 8Part 2

Part 2 Life insurance

239   Imposition of duty

This Part charges duty on:
(a)  a policy of life insurance, and
(b)  a life insurance rider.
Notes. 

(1)   Insurance is defined in the Dictionary to include assurance.

(2)   Generally, the insurer with whom the policy is effected is the person liable to pay the duty. But there are circumstances in which the person insured is liable to pay the duty. These circumstances are set out in section 245.

240   What is “life insurance”?

Life insurance means insurance described in section 9 (1) (a)–(g) and 9A of the Commonwealth Life Insurance Act 1995 in respect of:
(a)  a life or lives, or
(b)  any event or contingency relating to or depending on a life or lives,
of a person whose principal place of residence is, or persons whose principal places of residence are, in New South Wales at the time the policy that effects the insurance is issued.

241   What is a “life insurance rider”?

A life insurance rider is insurance that:
(a)  is attached to a policy of life insurance, and
(b)  adds specified events and contingencies to those insured under the policy, and
(c)  is subject to the terms and conditions of the policy.

242   Obligation to make out and execute a policy of life insurance

A life company must, on or before the twenty-first day of each month:
(a)  make out and execute a policy of life insurance for each contract or agreement for life insurance effected by or on behalf of the life company in the preceding month, and
(b)  endorse the policy in the manner approved by the Chief Commissioner.

243   What duty is payable?

(1) Policies of life insurance, other than a temporary or term insurance policy or trauma or disability insurance
The amount of duty chargeable on a policy of life insurance, other than a temporary or term insurance policy, a trauma policy, a TPD policy or a disability income policy is:
(a)  on the first $2,000, or part of $2,000, of the sum insured—$1, and
(b)  for every $200, or part of $200, in excess of the first $2,000—20 cents.
(2) Temporary or term insurance policies
The amount of duty chargeable on a temporary or term insurance policy, other than a group term insurance policy, is 5% of the first year’s premium on the policy.
(2A) Group term insurance policies
The amount of duty chargeable on a group term insurance policy is:
(a)  5% of the first year’s premium on the policy, and
(b)  5% of the amount of the premium (if any) payable in any succeeding year in respect of each additional life covered by the insurance policy (that is, each life that was not covered during the previous year).
(3) Life insurance riders
The amount of duty chargeable on a life insurance rider is 5% of the first year’s premium on the life insurance rider.
(4) Trauma or disability insurance
The amount of duty chargeable on a trauma policy, a TPD policy or a disability income policy is 5% of the premium paid to effect the insurance.
(5)  In this section:

disability income policy means a policy of insurance under which an amount is payable as a replacement of income in the event of the disablement of the insured by accident or sickness.

group term insurance policy means a term insurance policy that applies in respect of the lives of a specified group of persons, being a group the membership of which may change during the term of the policy.

TPD policy means a policy of insurance under which an amount is payable in the event of the total and permanent disablement of the insured by accident or sickness.

trauma policy means a policy of insurance under which an amount is payable in the event of the insured being found to have a stated condition or disease.

243A   Meaning of “premium”

Premium, in relation to a policy of life insurance or a life insurance rider, has the same meaning as it does in Part 1 in relation to general insurance.

244   Who is liable to pay the duty?

The life company or the person issuing the policy or life insurance rider is liable to pay the duty, except as provided by section 245.

245   Circumstances in which duty is payable by the insured person

(1)  This section applies to a person (not being a registered insurer) who effects a policy of life insurance or life insurance rider as an insured person with a person who is not a registered insurer.
(2)  A person to whom this section applies must, within 21 days after the end of the month in which the policy of life insurance or life insurance rider was effected:
(a)  lodge with the Chief Commissioner a return in the approved form containing such particulars and information as the Chief Commissioner may require, and
(b)  pay to the Chief Commissioner as duty the amount calculated in accordance with section 243.
(3)  A person to whom this section applies is taken to have complied with this section if the person’s duty under this section is discharged by another person acting on the person’s behalf.
Note. Because this section imposes liability for duty on an insured person if the insured person arranges insurance with an insurer who is not registered, it would always be prudent to check the registered status of the insurer. This may be done by inspecting the register kept under section 252 by the Chief Commissioner.

246   Refund on cancellation of policy of life insurance

If a premium is refunded to a person because the person cancels a policy of life insurance within 30 days after receiving the policy, a person who has paid duty in respect of the policy is entitled to a refund of the duty.
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