First: The total Commissions paid to any Distribution Channels, are subject to the following commission limit rules.

1. Pure Protection Products
    
   1. The maximum Commissions paid is 10% of the periodic Annualized Premium times the number of years in the policy term. The overall cap of Commissions
      over the full policy term is 160% of the Annualized Premium.
       
   2. For a Single Premium Policy and Ad-hoc Premium, the maximum
      Commissions paid must not be more than 10%.
       
2. Savings Products:

   The maximum Commissions paid is based on the following definitions and formula:

   1. Savings Ratio component – equals 4.5% of the periodic Annualized Premium
      times the number of years in the policy term; an overall cap of Commissions over the full policy term is 90% of the Annualized Premium; and for a Single
      Premium Policy and Ad-hoc Premium, the maximum Commissions paid must
      not be more than 4.5% of the premium.
       
   2. Protection Ratio component – equals 10% of the periodic Annualized
      Premium times the number of years in the policy term. The overall cap of
      Commissions over the full policy term is 160% of the Annualized Premium;
      and for a Single Premium Policy and Ad-hoc Premium, the maximum Commissions paid must not be more than 10% of the premium.
       
   3. Protection Benefit Ratio (“PBR”) – as determined by the Actuary as per Article
      (13) of the Instructions herein.
       
   4. To calculate the maximum Commissions paid for a Savings Product, the Actuary must use the following formula, separately for each component:
       

   Maximum Commission = [Protection Ratio x PBR] + [Savings Ratio x (1 – PBR)]

   Second: Premium Changes.

   1. The Actuary should consider non-recurring changes in the Annualized Premium due to add-on coverages, riders, or similar ad-hoc options in the same way as first year Annualized Premiums; meaning the commission limit rules apply as if the change in premiums is a separate policy.
       
   2. Recurring changes in the Annualized Premium due to premium indexation features, which may or may not change the premium based on an independent index, may not be used to increase the overall caps for total Commissions; meaning the overall caps apply as if all future premiums are the same as the first year Annualized Premium.
       
   3. Planned increases in the Annualized Premium due to premium indexation features, which increase the premium based on predetermined rules or amounts, may not be used to increase the overall caps for total Commissions; meaning the overall caps apply as if all future premiums are the same as the first year Annualized Premium.
       
   4. Planned decreases in the Annualized Premium due to premium indexation features, which decrease the premium based on predetermined rules or amounts, may not be used to increase the overall caps for total Commissions; meaning the overall caps apply as if the first year Annualized Premium was calculated as an average of all future premiums.
       

   Third: Policy Types.

   The commission limit rules apply to all types of Life insurance policies, whether sold to individuals or groups, regardless of the policy term and Distribution Channel, unless specifically stated otherwise in the Instructions herein.

   Fourth: Total Commission.

   If the commission is calculated based on the Cash Value or Net Asset Value of the policy and not on the premium, the Actuary needs to certify that the overall Commissions, using reasonable assumptions in the calculation, is consistent with the commission limits set in this Article.

   Fifth: Deferred Incentives for a Series of Policies.

   In the case of payment of incentives to Distribution Channels in the form of deferred compensation, entitlement of which is not pursuant to individual policies but with a series of polices. In such case, it is required to acquire an actuarial certificate to verify that the total Commissions are in accordance with the Instructions herein.