IPTM7720 - Personal portfolio bonds (PPB): ability to select property: selection of property by insurers but level of risk selected by policyholder

It is common for policyholders to be able to adjust their level of risk in relation to policy investments by selecting one or more of the insurer’s internal linked funds. Such ability does not, on its own, amount to a power to select property to determine the policy benefits. It is the insurer or its appointed manager that manages the investments in its internal linked funds and selects the property that determines the policy benefits.

Units in an insurer’s internal linked fund are not property for the purposes of the PPB legislation.

There may be some cases where the ability to select property is shared between the insurer and the policyholder. Property that may be selected by the insurer alone is of no relevance in determining whether or not a policy is a PPB. The PPB legislation is only concerned with property that may be selected by the policyholder.