LIF Rules and your AIA Australia experience from 1 January 2018 - update No.2

The table below shows the new remuneration rates for the Priority Protection range of products from 1 January 2018 (inclusive of GST). Please note that these rates will be adjusted in January 2019 in line with the LIF rules.

Increases to Policy Cost

AIA Australia will continue to pay commission on an increase to policy cost resulting from an increase to the sum insured.

Decreases to Policy Cost

If there is a decrease to the policy cost, commission will be clawed back proportionally, if the decrease occurs within the clawback period. 

Grandfathering Rules

 The following policies will be grandfathered under the LIF rules.

1. Policies issued prior to 1 January 2018
2. Policies issued 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 is submitted to AIA Australia before 1 January 2018; or
• paper application for the Policy is signed and dated before 1 January 2018 AND received by AIA Australia before 1 February 2018;

AND

• 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.

Clawback Rules

Grandfathered Policies:

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. This clawback period applies 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.

Upfront commission clawbacks: