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Thursday, 26 September 2002
Page: 4956

Senator IAN CAMPBELL (Western Australia—Parliamentary Secretary to the Treasurer) (9.44 a.m.)—I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows

I rise today to introduce a bill that will clarify the operation of two Acts: the Financial Sector (Collection of Data—Consequential and Transitional Provisions) Act 2001 and the General Insurance Reform Act 2001.

The Financial Sector (Collection of Data—Consequential and Transitional Provisions) Act 2001 has modernised and increased the relevance of data collections from financial sector entities, ensuring that the Australian Prudential Regulation Authority (APRA) collects the data it requires for the purposes of its prudential functions. The provisions of the Act were proclaimed to commence at certain times to enable a staggered introduction.

The General Insurance Reform Act 2001 has substantially strengthened the prudential supervisory regime for general insurers operating in Australia.

The provisions of the Financial Sector (Collection of Data—Consequential and Transitional Provisions) Act 2001 relating to general insurance, Part 3, were intended to commence by proclamation on 1 October 2001 and the General Insurance Reform Act 2001, which amended provisions in Part 3, was drafted accordingly, and came into effect on 1 July 2002.

However, the original proclamation of the commencement of Part 3 was invalid and a further proclamation was made. This provided that the provisions would also commence on 1 July 2002.

This has led to an ambiguity as it is unclear whether the provisions contained in the Financial Sector (Collection of Data—Consequential and Transitional Provisions) Act 2001, which repealed sections of the Insurance Act 1973, operate before or after the amendments made by the General Insurance Reform Act 2001, which substitute new provisions. The provisions contained within the General Insurance Reform Act 2001 are those that are meant to have effect.

The provisions relate to the role, accountability and responsibility of auditors and actuaries, access to premises and the signing of documents which are all key factors in maintaining an effective prudential framework

The amendments contained within this bill would ensure that the operation of the two Acts had their intended effect by legislating that the provisions of the Financial Sector (Collection of Data—Consequential and Transitional Provisions) Act 2001 commenced immediately before the provisions of the General Insurance Reform Act 2001. This would ensure that, where the same provision is amended by both of the Acts, the amendments made by the Financial Sector (Collection of Data—Consequential and Transitional Provisions) Act 2001 operate first.

Ordered that further consideration of this bill be adjourned to the first day of the next period of sittings, in accordance with standing order 111.