The following policies will be grandfathered under the LIF rules.
1. Policies issued prior to 1 January 2018
2. Policies issued on or after 1 January 2018:
Policies issued on or after 1 January 2018 will be grandfathered for LIF purposes if the:
- electronic application for the Policy was submitted to AIA Australia before 1 January 2018; or
- paper application for the Policy was signed and dated before 1 January 2018 AND is received by AIA Australia before 1 February 2018;
- Policy is issued by 31 March 2018
Where a Policy is grandfathered for LIF purposes, any additions to the same policy will also be grandfathered.
Any grandfathered policy which is cancelled and replaced on or after 1 January 2018 will no longer be grandfathered for LIF purposes.
A further reminder that remuneration paid on level commission will not be impacted by the LIF changes.
Our existing 12 month clawback rules will continue to apply to grandfathered policies (and additions to grandfathered policies).
Policies not Grandfathered
There will be a two year clawback period for all policies not grandfathered and for which Upfront commission is selected. This clawback period applies from the date the policy is issued, and applies in relation to any commission paid on the original sum insured and any additions made in the first two years.
Any commission paid on additions to a policy after the two year clawback period has ended will be subject to our existing 12 month clawback rules.
Level commission paid in the first year of a policy or on additions to a policy will be subject to our existing 12 month clawback rules.
Upfront commission clawbacks