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Unable to create Policy Definitions in CM 4.1.1c

I'm trying to create a Policy Definition and assign it to an Application I created, but I when I click Submit an error pops up stating:

Transaction not completed. Policy entry cannot be updated as there is no policy entry of type Other. Please create a policy of type Other or update the type of this policy to Other.

I want this Policy to be type Basic, not Other, and there is a type Other - which I'm not choosing. So why is this error popping up? I first tried this using version 4.1.1d, but it failed so I downgraded to 4.1.1c and it still fails.

I've attached a Word document with a few screen shots showing the error, and the fact that there is a type Other, even though I don't want to use it.

Am I doing this wrong or have I stumbled on a bug?

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