Your client, Tom Hanly, has his birthday on 8 June. He applied for a life and trauma policy (stepped premium) on 7 June and received notification on 11 June that the policy was accepted. The insurer backdated the commencement of the policy to 7 June so the rates prior to his birthday apply. Tom made a credit card payment of $1,500 on 11 June, representing the policy's full annual premium. On 24 June, Tom notifies the insurer that he decided not to proceed with the policy. He asks for the policy to be cancelled and requests a refund. The insurer provided a refund for the amount paid, less one month's premium as the policy was in force for 17 days. 

 Can the insurer retain a pro rata premium from Tom? 

 What is the relevant legislation for this?