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Information to help you support your customers
Resolution Life will soon be writing to approximately 2000 customers in AC&L Insurance and Risk Protection Package products, who will be given a premium refund payment and a future premium reduction.
This activity is the result of a review undertaken by Resolution Life, which focused on the application of premium increases in some level premium products, and how these were explained in their supporting disclosure materials and documents. It was concluded that the explanations weren’t clear enough and as such, Resolution Life has decided to refund a portion of premiums paid and adjust future premium payments.
Communications to customers will be sent in a phased approach over the next four months:
• February 2025
• March 2025
• April 2025
• June 2025.
More information
Below you’ll find more detailed information to help you support your customers throughout this change. If you have any questions or concerns, please contact your Adviser Support Manager or Strategic Partnership Manager. Alternatively, you can contact our dedicated support team:
• Call 133 731, select option 4 and enter the 5-digit extension 50058 OR
• Email us at levelpremiumrates@resolutionlife.com.au.
Frequently asked questions
How do I reassure my clients that the recent communication they’ve received about a refund payment is not a scam?
We’d like to reassure you and your client(s) that the communication they’ve received from Resolution Life is genuine.
However, if they're concerned and would like to check it is not a scam, please encourage them to read the letter carefully and visit the Resolution Life website at resolutionlife.com.au/levelpremiumrates.
They can also find out more about us and our company history at resolutionlife.com.au/about-us.
Why is my client(s) receiving this refund payment and a reduction to their future premiums?
This refund and reduction to future premiums is the result of a review undertaken by Resolution Life. The review focused on the application of base premium rate table increases to level premium policies, and how these were explained in the supporting disclosure materials and documents. It was concluded that the explanations weren’t clear enough and as such, Resolution Life has decided to refund clients a portion of their past premiums and reduce their future premiums.
The refund amount also includes interest for the period of time for which clients have been refunded (review period). Please note, there have been multiple base premium rate table changes during the review period and these changes will affect the levels of interest applied.
Will there be a claw back on commissions paid for premiums being refunded in respect of the review period?
No. There will be no claw back on commissions that were paid to advisers for in-force premiums during the review period.
Will future commissions be affected by the reduced future premiums?
As commission payments are aligned to the premiums paid by clients, they will be adjusted accordingly going forward. The change will be effective from the date a client’s future premium is reduced.
Which benefits are eligible for a refund payment and reduction to future premiums?
Clients who hold active policies within:
• AC&L Insurance - Income protection and Lump Sum, and/or
• Risk Protection Package - Income protection and Lump Sum may be eligible for a refund payment and reduction to future premiums. The product series and issue dates to receive refund payments are listed below. The specific benefits and types of cover are also outlined.
Can Resolution Life provide me with a list of my clients who are receiving a refund payment and reduction to future premiums?
Yes. If you’re interested in receiving a list of your clients who are receiving a refund payment and reduction to future premiums, please contact your Adviser Support Manager or Strategic Partnership Manager and they can provide it to you. Alternatively, please email our dedicated support team and they will also be able to help: levelpremiumrates@resolutionlife.com.au.
What does my client need to do to receive the refund payment?
No action is required. We will automatically pay the refund to the same bank account that their premiums are paid from. Once the payment is completed, we will send them a confirmation letter.
Can my client change the bank account their refund payment is paid to?
If your client has questions or concerns about the bank account that their refund payment is being paid to, please ask them to contact us as soon as possible:
• Call us on 133 731, select option 4 and enter the 5-digit extension 50059 to speak with our team OR
• Email us at levelpremiumrates@resolutionlife.com.au.
How did Resolution Life calculate my client’s refund payment?
Resolution Life has calculated refund payments from the present day back to 31 March 2017. This review period is consistent with the approach used by Australian Financial Complaints Authority (AFCA) determinations.
Each calculation is primarily made up of two main components:
1. Direct loss (premium difference)
This amount is the difference in premiums between what your client has paid and what they would have paid, under the revised calculation approach, for all premiums paid during the review period. It includes Stamp Duty.
The calculation is the difference, during the review period, between:
• the premiums paid for an insurance benefit, and
• the recalculated premiums, as at receipt of the premium(s) paid per layer (CPI increase).
The Policy Fee remains unchanged and as such doesn’t contribute to a premium difference payable.
2. Loss of earnings (Interest)
This amount is in recognition of any lost earnings and/or lost investment opportunity during the review period. Loss of earnings is calculated in accordance with the requirements under the Insurance Contract Act and associated Regulation. The applicable interest rate is based on the Australian Government 10-year bond yield, plus 3% p.a.
In most circumstances, loss of earnings has been applied for the period from each applicable premium payment, up to the date your client’s refund payment is made.
Each calculation applies a series of factors that are relevant for each individual client’s policy, including the person insured’s age, gender and sum insured. As such, each refund payment amount is specific to each client’s individual policy.
If your client(s) would like to understand how their refund payment has been calculated, they can request a copy by contacting us at levelpremiumrates@resolutionlife.com.au.
How did Resolution Life calculate my client’s reduced future premiums?
How premiums for life insurance policies are calculated
Resolution Life calculates premiums by applying the applicable base premium rate tables, relevant premium loadings and discounts to the sum insured.
To date, the base premium rate tables we use reflect any changes from previous base premium rate table reviews, for owners of a similar policy. This includes all pricing changes that have occurred over time since inception of the policy.
Why Resolution Life is making a change
The reduction to future premiums is the result of a review undertaken by Resolution Life which focused on the application of base premium rate table increases and how they were explained in the supporting disclosure materials and documents. It was concluded that the explanations, in relation to the variations of these base premium rate tables over time, weren’t clear enough. As such, we’ve revised the way in which clients’ premiums are calculated.
What’s changing?
Each affected client has had their premiums reset to the rates applicable for their sum insured as at 31 March 2017. This will be the same as what the base premium rate table was at the date of the client’s premium anniversary, immediately prior to 31 March 2017.
The reset premium will remain in place for as long as there are no changes to a client’s policy. *
Where a client’s sum insured has increased since 31 March 2017 (whether due to regular indexation or by voluntary increase), the premiums for the additional sum insured amounts are based on the base premium rate table applicable at the date the increases were added.
If your client currently receives a discount on their premiums, this will continue to be applied on the reduced future premium.
Further details will be provided to clients in their updated insurance schedule. Additionally, if your client(s) would like to understand how their new reduced future premiums have been calculated, they can request a copy by contacting us at levelpremiumrates@resolutionlife.com.au.
* There are some exceptions to these rules (such as where policy alterations are made that increase risk).
Why is my client receiving a refund for only some of the insurance benefits they have on their policy?
Not all insurance benefits were eligible to be included in the policy review undertaken by Resolution Life. Specific information about the insurance benefits for which your client(s) are receiving a refund are outlined in the letter they’ve received.
My client has another active insurance policy with Resolution Life. Will they receive a refund payment for that?
If your client has multiple active insurance policies with Resolution Life and more than one product and benefit type are eligible for a refund payment, your client will receive a separate communication for each policy.
What is the review period and why is Resolution Life only refunding policies back to 31 March 2017?
Resolution Life has reviewed affected products from the present day back to 31 March 2017, as this includes the period in which substantial and material base rate premium table increases were implemented for impacted benefits under these products.
These increases were originally made in response to the Australian Prudential Regulation Authority (APRA) requiring life insurers to review their premiums for income protection cover, to seek to ensure the future sustainability of income protection products.
In undertaking the review, Resolution Life deemed it appropriate to include other types of products, such as life insurance (death cover), total & permanent disablement (TPD) and trauma cover, as well as income protection products.
Will my client receive updated documentation for their policy?
Your client’s updated insurance schedule will be sent to them and will show their updated policy details, including a summary of their ongoing premiums. They will also receive further information about their refund payment.
Your client will also continue to receive regular communications about their insurance from Resolution Life. Types of communication may include: a premium change letter, annual statement and/or payment due notice.
Is my client’s current level of cover affected by this refund payment or the reduction to future premiums?
No. Your client’s cover is not affected and remains in place.
For superannuation insurance policies, your client’s existing binding death benefit nomination(s), if provided, also remains in place.
Will my client be advised once the refund payment has been made?
Yes. If your client is receiving a refund payment and has provided us with current bank account details, they will receive a confirmation of payment letter. This will be issued approximately 4 weeks after the payment is complete.
Does my client need to do anything when their future premiums are reduced?
No. There is nothing your client needs to do. The reduced future premium will be applied automatically.
Additional important information
If you have clients who are eligible for a refund payment and reduction to future premiums, but they currently have greater complexity associated with their policy, for example, those clients in pre-lapse, on claim, or with alteration requests, we will be contacting them from April 2025 to provide further details.
If you have a client who wants to know more about reinstating a lapsed policy, please ask them to review Reinstating your insurance policy - Resolution Life. From here they can submit an online request or contact the support team on insurance@resolutionlife.com.au.
Product series and benefits
Policy status | Country | Class of business | Premium type | Product name | Coverage type | Benefit code | Benefit description* *Description shown in customer’s insurance schedule | Any series on or after | Any series prior to but not including |
In-force | Australia | Ordinary / Super | Level | AC&L – AXA Insurance | Income Protection | INRL | Income Replacement Plan | 1/08/1994 | 15/11/2000 |
PRAL | Premier Income Protection Plan | 1/08/1994 | 1/09/1996 | ||||||
PROL | Income Protector Plan | 1/08/1994 | 1/09/1996 | ||||||
Lump Sum | LL1A, LL3A | Life Insurance Plan | 1/08/1994 | 1/09/1996 | |||||
RPP – Risk Protection Package | Income Protection | PIPL | Professional Income Protection | 1/07/1995 | 1/12/2000 | ||||
VIPL | Vital Income Protection | 1/07/1995 | 1/12/2000 | ||||||
Lump Sum | LDL | Life Protection Plan | 30/03/1995 | 1/08/1999 | |||||
TPD | LDLSO | Total and Permanent Disablement Option (Own) | 10/12/1997 | 1/08/1999 | |||||
Trauma | LTRD | Trauma Deluxe Protection | 1/07/1995 | 1/08/1999 | |||||
LTRE | Trauma Essentials Protection | 1/07/1995 | 19/08/2002 |
What you need to know
The information contained on this page is only for professional financial advisers acting in that capacity and does not contain any financial product advice.
Resolution Life is part of the Resolution Life Group and can be contacted at resolutionlife.com.au/contact-us or by calling 133 731.
