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Tuesday, 17 February 1987
Page: 57

(Question No. 3160)

Mr Jacobi asked the Treasurer, upon notice, on 12 February 1986:

(1) Further to his answer to parts 16 and 17 of my question No. 11 (Hansard, 19 November 1985, pages 3186-9), has the Government, in the course of reviewing the Insurance Act decided whether to increase public disclosure of financial information of an insurer's solvency, and in particular to do so by requiring the publication of form 4.

(2) Further to his answer to parts 24 and 27, when will he propose amendments to the Insurance Act to incorporate provisions concerned with oversighting the suitability of directors and owners of authorised insurers.

(3) Further to his answers to parts 59 and 60, when will legislation be introduced to give priority to those insured who have suffered an insured loss and whose claims have not been paid in the event of the winding up of the insurance company concerned.

(4) Further to his answer to part 62, what decision has the Government taken on my proposal that the responsibilities of both the Life and Insurance Commissioners be amalgamated in one office.

Mr Keating —The answer to the honourable member's question is as follows:

(1) As indicated in parts (16) and (17) of my answer to Question No. 11, the Government is sympathetic to the idea of increased disclosure in this area. However, the publication of Form 4 in its existing format could convey a misleading impression of an insurer's solvency. This derives from that fact that the solvency calculation included in that return is based on the insurer's assessment of the relevant assets and liabilities which does not always accord with that made by the Insurance Commissioner. The Government will be considering measures for increased disclosure with industry representatives.

(2) The examination referred to in part (24) of my answer to Question 11 is nearing completion. There are, however, some issues concerning possible approaches to fit and proper persons tests for directors and owners of authorised insurance companies that will need to be explored further with the Insurance Commissioner, the Life Insurance Commissioner and industry representatives. It is my intention, however, that these processes be concluded very soon.

(3) It is envisaged that this matter will be considered in the context of assessing the Australian Law Reform Commission's final report on its general insolvency reference, which is expected to be available late in 1987.

(4) The honourable member will be aware that, as announced on 11 June 1986, the Government is proceeding with arrangements for the existing life insurance and general insurance regulatory functions, as well as the proposed new superannuation regulatory functions and the functions of the Australian Government Actuary, to be brought together in one office under the control of a new statutory position to be known as the Principal Commissioner for Insurance and Superannuation.