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Private Health Insurance Bill 2007

Part 5-3 Enforcement of health benefits fund requirements

Division 211 Introduction

211-1   What this Part is about

In order to protect the interests of the policy holders, and to ensure that health benefits funds are operated in accordance with Part 4-4, specific powers and processes are required in addition to the general powers and processes in Part 5-2.

Inspectors may be appointed to investigate the affairs of private health insurers, and external managers may be appointed to manage health benefits funds. These processes may lead to terminating managers of funds being appointed.

211-5   Purpose of this Part

                   The purpose of this Part is:

                     (a)  to provide for the supervision of the business, affairs and property of * health benefits funds, so as to ensure that the business and affairs are carried on, and the property is managed:

                              (i)  in the interests of the * policy holders of the funds; and

                             (ii)  in accordance with Part 4-4; and

                     (b)  to provide for the * external management of health benefits funds in a way consistent with the interests of those policy holders; and

                     (c)  to provide, as a consequence either of that supervision or external management, for the orderly termination of health benefits funds in a way that is consistent with the interests of those policy holders.

211-10   The Private Health Insurance (Health Benefits Fund Enforcement) Rules

                   Enforcement of the requirements for * health benefits funds is also dealt with in the Private Health Insurance (Health Benefits Fund Enforcement) Rules. The provisions of this Part indicate when a particular matter is or may be dealt with in these Rules.

Note:          The Private Health Insurance (Health Benefits Fund Enforcement) Rules are made by the Minister under section 333-20.

211-15   Limitation on external management and termination of health benefits funds

             (1)  Despite the provisions of any other law of the Commonwealth or of any law of a State or Territory, a * health benefits fund can only be placed under * external management, or dealt with as a fund under external management, in accordance with Division 217.

             (2)  Despite the provisions of any other law of the Commonwealth or any other law of a State or Territory, a * health benefits fund can only be terminated in accordance with Division 149.



 

Division 214 Investigations into affairs of private health insurers

214-1   Investigation of private health insurers by inspectors

             (1)  The Council may, in writing, appoint an * inspector to investigate the affairs of a private health insurer if the Council has reason to suspect that:

                     (a)  the affairs of the insurer are being, or are about to be, carried on in a way that is not in the interests of the * policy holders of a * health benefits fund conducted by the insurer; or

                     (b)  the insurer has contravened a provision of Part 4-4.

             (2)  The instrument of appointment must specify:

                     (a)  the matter referred to in paragraph (1)(a) or (b) that the Council suspects; and

                     (b)  the ground on which the Council suspects the matter; and

                     (c)  the matters into which the investigation is to be made, being the whole or some part of the affairs of the insurer.

             (3)  An * inspector so appointed may be a person engaged or appointed under the Public Service Act 1999 or by an authority of the Commonwealth.

214-5   Powers of inspectors

             (1)  An * inspector may, by notice in writing given to a person whom the inspector believes to have some knowledge of the affairs of the private health insurer that the inspector is investigating, require that person:

                     (a)  to produce to the inspector all or any of the records relating to the affairs of the insurer that are in the custody, or under the control, of that person; or

                     (b)  to give to the inspector all reasonable assistance within the person’s power in connection with the investigation; or

                     (c)  to appear before the inspector for examination concerning matters that are relevant to the investigation and are within the knowledge of the person;

within the period (that must not be less than 14 days) specified in the notice.

             (2)  If records are produced to an * inspector under subsection (1), the inspector may:

                     (a)  take possession of them for such period as the inspector thinks necessary for the purposes of the investigation; and

                     (b)  make copies of, and take extracts from, them.

             (3)  An * inspector is not entitled to refuse to permit a person to inspect records that are in the possession of the inspector under subsection (2) if the person would be entitled to inspect those records if the inspector had not taken possession of them.

             (4)  A person who complies with a requirement of an * inspector under subsection (1) does not incur any liability to any other person merely because of that compliance.

214-10   Person may be represented by lawyer

                   A lawyer acting for a person being examined by an * inspector:

                     (a)  may attend the examination; and

                     (b)  may, to the extent that the inspector allows:

                              (i)  address the inspector; and

                             (ii)  examine the person;

                            in relation to matters in respect of which the inspector has questioned the person.

214-15   Compliance with requirements of inspectors

             (1)  A person is guilty of an offence if the person refuses or fails to comply with a requirement of an * inspector under section 214-5 that is applicable to the person.

Penalty:  30 penalty units or imprisonment for 6 months, or both.

             (2)  However, the person is only required to comply with the requirement to the extent that the person is capable of doing so.

Note:          The defendant bears an evidential burden in relation to the matter in subsection (2). See subsection 13.3(3) of the Criminal Code .

             (3)  A person being examined by an * inspector is not excused from answering a question put to the person by the inspector on the ground that the answer might tend to incriminate the person.

             (4)  However, if the person informs the * inspector before answering the question that the answer might tend to incriminate the person, neither the question nor the answer is admissible in evidence against the person in criminal proceedings (other than proceedings in relation to an offence under subsection (1)).

214-20   Access to premises

             (1)  An * inspector who:

                     (a)  is empowered to investigate the whole or a part of the affairs of a private health insurer; and

                     (b)  enters any * premises under subsection (3) or in accordance with a warrant granted under subsection (5);

may exercise the functions of an inspector under this section in relation to the insurer.

             (2)  The functions of an * inspector under this section in relation to the insurer are to exercise * search powers in relation to any records that relate, or that the inspector believes, on reasonable grounds, to relate, to the affairs of the insurer.

             (3)  An * inspector may, with the consent of the * occupier of any * premises, enter the premises for the purpose of exercising the functions of an inspector under this section in relation to the private health insurer whose affairs the inspector is empowered to investigate.

             (4)  An * inspector who has reason to believe that there are on any * premises records relating to the affairs of the private health insurer whose affairs the inspector is empowered to investigate may apply to a Magistrate for a warrant authorising the inspector to enter the premises for the purpose of exercising the functions of an inspector under this section in relation to the insurer.

             (5)  The Magistrate may grant a warrant if satisfied by information on oath or affirmation:

                     (a)  that there is reasonable ground for believing that there are on the * premises to which the application relates any records relating to the affairs of the insurer concerned; and

                     (b)  that the issue of a warrant is reasonably required for the purposes of this Act.

The warrant may be in the form set out in the Private Health Insurance (Health Benefits Fund Enforcement) Rules.

             (6)  The warrant authorises the * inspector, with such assistance as the inspector thinks necessary, to enter the * premises, using such force as is necessary and reasonable in the circumstances:

                     (a)  during such hours of the day or night as the warrant specifies; or

                     (b)  if the warrant so specifies, at any time;

for the purpose of exercising the functions of an inspector under this section in relation to the insurer concerned.

             (7)  A person is guilty of an offence if the person obstructs or hinders an * inspector exercising the functions of an inspector under this section.

Penalty:  30 penalty units or imprisonment for 6 months, or both.

             (8)  Subsection (7) does not apply if the person has a reasonable excuse.

Note:          The defendant bears an evidential burden in relation to the matter in subsection (8). See subsection 13.3(3) of the Criminal Code .

214-25   Reports of inspectors

             (1)  An * inspector:

                     (a)  must, on the completion or termination of an investigation of the whole or a part of the affairs of a private health insurer, report in writing to the Council on the result of the investigation; and

                     (b)  if so directed in writing by the Council, must make such written reports during the investigation as are specified in the direction; and

                     (c)  may make one or more other written reports to the Council during the investigation.

             (2)  The report made on the completion of the investigation must include the * inspector’s recommendations with respect to:

                     (a)  the question whether the insurer should be permitted to continue to conduct a particular * health benefits fund; and

                     (b)  the question whether the insurer’s affairs should be reorganised to enable it better to conduct the fund and, if so, the way in which they should be reorganised; and

                     (c)  such other matters affecting the insurer, or the interests of the * policy holders of the fund, as the inspector thinks fit.

             (3)  If the matters investigated included:

                     (a)  the question whether the insurer is, or is about to become, unable to meet its liabilities relating to a * health benefits fund; or

                     (b)  the question whether the insurer’s affairs are being, or are about to be, carried on in a way that is not in the interests of the * policy holders of the fund;

the report made on the completion of the investigation must include a statement of the * inspector’s opinion in relation to that question and the facts on which that opinion is based.

             (4)  An * inspector must not include in a report under this section:

                     (a)  a recommendation relating to the institution of criminal proceedings; or

                     (b)  a statement to the effect that, in the inspector’s opinion, a specified person has committed a criminal offence.

             (5)  However, if an * inspector is of the opinion that criminal proceedings ought to be instituted or that a person has committed a criminal offence, the inspector must state that opinion in writing given to the Council.

214-30   Dissemination of reports

             (1)  The Council must give a copy of a report made to the Council under paragraph 214-25(1)(a) to the private health insurer to which the report relates.

             (2)  However, subsection (1) does not apply if the Council thinks that, having regard to proceedings that have been or might be instituted, a copy of the report should not be given to the insurer.

             (3)  If the Council has given a copy of the report to the insurer under subsection (1), the Council may, if it thinks it is in the public interest to do so, cause the whole or a part of the report to be published.

             (4)  A court before which proceedings under this Act are brought against a private health insurer or other person in respect of matters dealt with in a report under section 214-25 may order that a copy of the report be given to that insurer or other person.

214-35   Liability for publishing reports etc.

             (1)  An action or proceeding, civil or criminal, does not lie against a person for publishing in good faith a copy of, or a fair extract from or of, a publication made under subsection 214-30(3).

             (2)  An action or proceeding, civil or criminal, does not lie against an * inspector:

                     (a)  in respect of the publication to the Council of a report under section 214-25; or

                     (b)  in respect of the inspector’s opinion given to the Council in accordance with subsection 214-25(5);

if the inspector has acted in good faith.

             (3)  For the purposes of this section, a publication or other action is taken to be made in good faith if the person by whom it is made is not actuated by ill will to a person affected by the publication or other action, or by any other improper motive.

214-40   Delegation by inspectors

             (1)  An * inspector may, by writing signed by the inspector, delegate any of the inspector’s powers under this Act to a person engaged or appointed under the Public Service Act 1999 or by an authority of the Commonwealth.

             (2)  A delegate who proposes to exercise his or her delegated powers must, at the request of any person who may be affected by the proposed exercise, produce for the inspection of that person the instrument of delegation or a copy of that instrument.

Note:          See also sections 34AA, 34AB and 34A of the Acts Interpretation Act 1901 relating to delegations.

214-45   Records not to be concealed etc.

             (1)  A person is guilty of an offence if:

                     (a)  the person engages in conduct; and

                     (b)  the conduct results in the concealment, destruction, mutilation or alteration of records relating to the affairs of a private health insurer; and

                     (c)  those affairs are being investigated under this Act.

Penalty:  30 penalty units or imprisonment for 6 months, or both.

             (2)  Subsection (1) does not apply if the person did not act with intent to defeat the purposes of this Act and did not act with intent to delay or obstruct the carrying out of the investigation under this Act.

Note:          The defendant bears an evidential burden in relation to the matters in subsection (2). See subsection 13.3(3) of the Criminal Code .



 

Division 217 External management of health benefits funds

Subdivision 217-A Preliminary

217-1   Purpose of Division

                   The purpose of this Division is to permit the business, affairs and property of a * health benefits fund under * external management to be managed in a way:

                     (a)  that maximises the chance that the * policy holders of the fund continue to be * covered for health insurance either by that fund or by another fund to which the business of that fund is transferred; or

                     (b)  if it is not possible for that coverage to be maintained—that, to the extent possible, safeguards the financial interests of those policy holders if the fund is terminated.

217-5   The basis of the law relating to external management

             (1)  The * external management of a * health benefits fund is regulated:

                     (a)  by the provisions of this Division; and

                     (b)  by the provisions of Divisions 6, 7, 8, 10, 11, 13 and 16 of Part 5.3A of Chapter 5 of the Corporations Act 2001 and of Division 7A of Part 5.6 of that Chapter, all applying, so far as they are capable of so doing, subject to such modifications as are set out in:

                              (i)  this Act; or

                             (ii)  the Private Health Insurance (Health Benefits Fund Enforcement) Rules.

             (2)  Subject to this section, any provisions of a law of the Commonwealth, or a State or Territory, that, but for this section, would relate to the * external management of such a fund cease, by force of this section, to apply in relation to the fund.

             (3)  In the application of the provisions of the Corporations Act 2001 referred to in subsection (1) in relation to the * external management of a * health benefits fund, those provisions apply as if:

                     (a)  a reference to the company were a reference to the fund; and

                     (b)  a reference to the administrator were a reference to the * external manager of the fund appointed under this Act; and

                     (c)  a reference to the Court were a reference to the Federal Court.

             (4)  The Private Health Insurance (Health Benefits Fund Enforcement) Rules may provide for different modifications according to the nature of the * health benefits fund that is to be, or that is being, administered.

Subdivision 217-B Appointment of external managers

217-10   Council may appoint external managers

             (1)  The Council may, in writing, appoint a person as the * external manager of a * health benefits fund if the requirements of subsections 217-15(1) and (2) are satisfied.

             (2)  However, the person:

                     (a)  must be registered, or taken to be registered, as an official liquidator under the Corporations Act 2001 ; and

                     (b)  must not be a person who is:

                              (i)  the * policy holder of the fund; or

                             (ii)  an auditor of the fund; or

                            (iii)  a chargee of property of the fund; or

                            (iv)  an officer of a body corporate that is a chargee of property of the fund; or

                             (v)  a person who is otherwise related to the fund.

             (3)  The appointment takes effect from the date specified in the instrument of appointment.

217-15   Grounds of appointment of external managers

             (1)  The Council must not appoint an * external manager to a * health benefits fund unless the Council believes that the appointment of an external manager to the fund is, in the circumstances, in the interests of the * policy holders of the fund.

             (2)  The Council must not appoint an * external manager to a * health benefits fund unless:

                     (a)  the Council is satisfied, on reasonable grounds, that the private health insurer conducting the fund has contravened section 140-15 (compliance with the * solvency standard) in its conduct of the fund; or

                     (b)  the Council is satisfied, on reasonable grounds, that the insurer has, in its conduct of the fund, contravened a * solvency direction, a * capital adequacy direction or * prudential direction that the Council has given to the insurer; or

                     (c)  a request for * external management of the fund is made to the Council by a resolution of the board of * directors of the insurer; or

                     (d)  a ground specified in the Private Health Insurance (Health Benefits Fund Enforcement) Rules made for the purposes of this paragraph applies in respect of the fund.

             (3)  In forming the requisite state of mind for the purpose of subsection (1), or of any Private Health Insurance (Health Benefits Fund Enforcement) Rules made for the purposes of paragraph(2)(d) that require a particular state of mind, the Council may have regard:

                     (a)  to any information in its own records; and

                     (b)  to any report or return made to it, including any report received from an * inspector under section 214-25.

217-20   External managers to displace management of funds

                   If a person is appointed as * external manager of a * health benefits fund, then, for so long as the fund is under * external management:

                     (a)  the management of the fund vests in the external manager; and

                     (b)  any * officer of the * responsible insurer for the fund who was vested with the management of the fund immediately before the appointment of the external manager is, by force of this section, divested of that management.

Subdivision 217-C Duties and powers of external managers

217-25   Duties of external managers

             (1)  The main duties of the * external manager of a * health benefits fund are:

                     (a)  to examine the business, affairs and property of the fund; and

                     (b)  to ascertain the * assets and liabilities of the fund; and

                     (c)  if the business of the fund has been mixed with other business of the private health insurer concerned—to apportion the assets and liabilities as between the fund and that other business; and

                     (d)  to form an opinion as to which course of action maximises the chance that the * policy holders of the fund continue to be * covered for health insurance either by that fund or by another fund to which the business of that fund is transferred; and

                     (e)  to make a final written report to the Council, in accordance with Subdivision 217-E, recommending that course of action.

             (2)  In the day-to-day administration of a * health benefits fund, it is the duty of the * external manager to administer the fund as efficiently and economically as possible.

217-30   Additional powers of external managers

             (1)  In the application of the provisions of Division 8 of Part 5.3A of Chapter 5 of the Corporations Act 2001 , for the purpose of:

                     (a)  conferring further powers on the * external manager of a * health benefits fund; and

                     (b)  where appropriate, qualifying the exercise of those powers;

the provisions of that Division are taken not to include section 442A or subsection 442D(1).

             (2)  For the purposes of section 442F of the Corporations Act 2001 as so applying, sections 128 and 129 of that Act are also taken to apply, subject to such modifications as are specified in the Private Health Insurance (Health Benefits Fund Enforcement) Rules.

217-35   Protection of property during external management

             (1)  In the application of the provisions of Division 6 of Part 5.3A of Chapter 5 of the Corporations Act 2001 in relation to the protection, during the * external management of a * health benefits fund, of the property of the fund, the provisions of that Division are taken not to include section 440A.

             (2)  In determining, for the purposes of section 440D of the Corporations Act 2001 as so applying, whether the administrator should consent to, or the court should give leave for, a person’s beginning or continuing legal proceedings, the administrator or the court must have regard to whether:

                     (a)  the proceedings do, or do not, relate to any property of the fund under * external management; and

                     (b)  the proceedings would, or would not, be materially detrimental to the interests of the * policy holders of the fund.

217-40   Rights of chargee, owner or lessor of property of fund under external management

             (1)  In the application of the provisions of Division 7 of Part 5.3A of Chapter 5 of the Corporations Act 2001 in relation to the property of a * health benefits fund under * external management:

                     (a)  the provisions of that Division are taken not to include section 441A; and

                     (b)  subsection 441D(1) is taken not to include the words following paragraph 441D(1)(b).

             (2)  Nothing in that Division as so applying prevents:

                     (a)  the * external manager of a * health benefits fund giving written consent; or

                     (b)  the court giving leave;

for the enforcement of a charge, subject to any condition specified by the external manager or by the court, as the case requires, if the external manager or the court is satisfied:

                     (c)  that the charge does not relate to the property of the fund under * external management; and

                     (d)  that the enforcement of the charge will not be materially detrimental to the interests of the * policy holders of the fund.

Subdivision 217-D Procedure relating to voluntary deeds of arrangement

217-45   Matters that may be included in the Private Health Insurance (Health Benefits Fund Enforcement) Rules

             (1)  The Private Health Insurance (Health Benefits Fund Enforcement) Rules may provide for all or any of the following:

                     (a)  the convening by * external managers of * health benefits funds of meetings of creditors of those funds, and the * policy holders of the funds, to consider the possibility of the * responsible insurers for those funds executing * voluntary deeds of arrangement;

                     (b)  the procedure for convening such meetings (including the giving of notices);

                     (c)  the conduct of such meetings;

                     (d)  the matters that may be decided at such meetings;

                     (e)  the circumstances in which the external managers must include in their reports to the Council under section 217-50, recommendations arising out of decisions taken at such meetings;

                      (f)  the kinds of such recommendations that may be included in those reports;

                     (g)  the actions that the Council may take if such recommendations are included in those reports.

             (2)  This section does not limit the matters that may be included in the Private Health Insurance (Health Benefits Fund Enforcement) Rules for the purposes of any other provision of this Part.

Subdivision 217-E External managers’ reports to Council

217-50   External managers to give reports to Council

             (1)  As soon as practicable after being appointed as * external manager of a * health benefits fund, and in any case within the period under subsection (2), the external manager must:

                     (a)  conclude the examination of the business, affairs and property of the fund; and

                     (b)  make a final written report to the Council.

             (2)  The period is:

                     (a)  the 3 months after being appointed as * external manager; or

                     (b)  such longer period as the Council notifies to the external manager.

             (3)  The * external manager must, in the report to the Council:

                     (a)  recommend a course of action that, in the external manager’s opinion, maximises, in the circumstances, the chance that the * policy holders of the fund continue to be * covered for health insurance either by that fund or by another fund to which the business of that fund is transferred; and

                     (b)  set out the reasons for that recommendation.

             (4)  Without limiting subsection (3), the * external manager may recommend:

                     (a)  subject to the Federal Court’s making an order or orders in relation to the matter, that the * responsible insurer for the fund implement a scheme of arrangement concerning the business of the fund; or

                     (b)  subject to the Federal Court’s making an order or orders in relation to the matter, that a * terminating manager of the * health benefits funds of the responsible insurer be appointed; or

                     (c)  that the * external management cease and that the business of the fund be resumed by the responsible insurer for the fund.

             (5)  However, if the Private Health Insurance (Health Benefits Fund Enforcement) Rules so provide, the * external manager must recommend that the Council approve the execution of a * voluntary deed of arrangement.

             (6)  Without limiting the matters that may be dealt with in a scheme of arrangement referred to in paragraph (4)(a), such a scheme may provide for:

                     (a)  the continuance, on terms or conditions set out in the scheme, of the business of the fund; or

                     (b)  the transfer of the fund, on terms set out in the scheme, to a private health insurer other than the * responsible insurer for the fund; or

                     (c)  the execution of a deed in the same terms as a proposed * voluntary deed of arrangement rejected at a meeting of a kind referred to in section 217-45.

217-55   Dealing with reports given to the Council

             (1)  In deciding whether or not to approve a course of action recommended under subsection 217-50(3), the Council may:

                     (a)  request the * external manager to provide further information on any matter; and

                     (b)  engage any person to assist it in evaluating assessments made, or projections relied on, by the external manager in relation to matters dealt with in the report.

The Council must have regard to the external manager’s report, and to any additional information provided by the external manager or by any person engaged to assist the Council, in reaching its decision.

             (2)  If the Council is satisfied that a course of action recommended by the * external manager under subsection 217-50(3) will, in the circumstances, be in the interests of the * policy holders of the fund, the Council must, by written notice, inform the external manager to that effect and either:

                     (a)  if the course of action is of a kind specified in paragraph 217-50(4)(a)—direct the external manager to apply under subsection 217-60(1) to give effect to the course of action; or

                     (b)  if the course of action is termination of the funds of the private health insurer in question—direct the external manager to apply under subsection 220-1(1) for the appointment of a * terminating manager of the funds.

             (3)  If the Council is not satisfied as mentioned in subsection (2), the Council may take a different course of action that the Council is satisfied will, in the circumstances, be in the interests of * policy holders of the fund.

             (4)  The courses of action that the Council may take under subsection (3) include:

                     (a)  the Council applying to the Federal Court for an order or orders in relation to the * responsible insurer for the fund implementing a scheme of arrangement concerning the business of the fund; and

                     (b)  the Council applying to the Federal Court for an order or orders for the appointment of a * terminating manager of the * health benefits funds of the responsible insurer.

217-60   Court orders in respect of schemes of arrangement

             (1)  If, under paragraph 217-55(2)(a), the Council directs the * external manager to apply under this subsection to give effect to a course of action of a kind specified in paragraph 217-50(4)(a), the external manager must apply to the Federal Court for an order or orders to give effect to the course of action.

Note:          For what is to happen if the course of action is to be termination of a fund, see subsection 220-1(1).

             (2)  On an application under subsection (1) of this section, or under paragraph 217-55(4)(a), for such an order or orders:

                     (a)  the Council and any other person interested are entitled to be heard; and

                     (b)  the Federal Court may make such order or orders in respect of the course of action the subject of the application as it considers to be, in all the circumstances, in the interests of the * policy holders of the * health benefits fund concerned.

             (3)  An order under this section:

                     (a)  is binding on all persons; and

                     (b)  takes effect despite anything in the constitution or other * rules of the * responsible insurer for the fund concerned.

             (4)  To avoid doubt, an order of the Federal Court is not required:

                     (a)  in order to give effect to a * voluntary deed of arrangement—if the Council approves the execution of the deed; or

                     (b)  in order to effect a termination of an * external management.

Subdivision 217-F Miscellaneous

217-65   When an external management begins and ends

             (1)  The * external management of a * health benefits fund begins when an * external manager is appointed under section 217-10 to administer the fund.

             (2)  The * external management of a * health benefits fund ends when:

                     (a)  the Council terminates the appointment of the * external manager and does not appoint a replacement external manager; or

                     (b)  a * voluntary deed of arrangement relating to the fund is executed; or

                     (c)  the Council notifies the external manager, under subsection 217-55(2), that it has accepted the external manager’s recommendation, made under subsection 217-50(4), that the external management cease; or

                     (d)  the Federal Court makes an order or orders under section 217-60 for a course of action approved by the Council and incorporated in a scheme of arrangement; or

                     (e)  a * terminating manager of the fund is appointed.

217-70   Effect of things done during external management of health benefits funds

                   A payment made, transaction entered into, or other act or thing done, in good faith, by, or with the consent of, the * external manager of a * health benefits fund:

                     (a)  is valid and effectual for the purposes of this Act and for the purposes of the Corporations Act 2001 as it applies in relation to the fund; and

                     (b)  is not liable to be set aside in a termination of the fund.

217-75   Disclaimer of onerous property

             (1)  In the application of the provisions of Division 7A of Part 5.6 of Chapter 5 of the Corporations Act 2001 for the purpose of determining the power of an * external manager of a * health benefits fund to disclaim property of the fund, those provisions have effect as if:

                     (a)  the external manager were the liquidator of the company that the fund is taken to constitute; and

                     (b)  the references in subsections 568B(3) and 568E(5) of that Act to the company’s creditors were references to the * policy holders of the fund.

             (2)  A disclaimer by an * external manager of a * health benefits fund has the same effect, and the external manager is under the same obligations, for the purposes of this Act, as if the disclaimer had been made under Division 7A of Part 5.6 of Chapter 5 of the Corporations Act 2001 .



 

Division 220 Ordering the termination of health benefits funds

220-1   Applications by external managers to the Federal Court

             (1)  If, under paragraph 217-55(2)(b), the Council directs the * external manager to apply under this subsection for the appointment of a * terminating manager of the * health benefits funds of a private health insurer, the external manager must apply to the Federal Court for an order or orders to give effect to such an appointment.

             (2)  The Council and any other person likely to be affected by the termination of the funds are entitled to be heard on the application.

220-5   Orders made on applications for appointments of terminating managers

             (1)  On an application under subsection 220-1(1), or under paragraph 217-55(4)(b), the Federal Court may make an order for the appointment of a * terminating manager of the * health benefits funds of a private health insurer, and any related orders.

             (2)  However, the Federal Court must not do so unless it considers the orders to be, in the circumstances, in the interests of the * policy holders of the funds.

220-10   Binding nature of Court orders

                   Any orders made by the Federal Court under section 220-5:

                     (a)  are binding on all persons; and

                     (b)  take effect despite anything in the constitution or * rules of the * responsible insurer of the funds concerned.

220-15   Notice of appointments

                   If the Federal Court orders the appointment of a * terminating manager of the * health benefits funds of a private health insurer, the Council must notify the insurer in writing of the person appointed as the terminating manager.