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Tuesday, 16 November 1976
Page: 2731

Mr ALDRED (Henty) - I rise to speak in favour of the Insurance (Deposits) Amendment Bill. I am pleased to hear the Opposition has taken a similar stance. The purpose of this Bill is to amend the Insurance (Deposits) Act 1932 to exempt companies authorised under the Insurance Act 1973 from the requirement to lodge a deposit with the Treasurer and to provide for the return of deposits in appropriate cases. Under the Insurance (Deposits) Act a company carrying on insurance business is required to lodge a deposit with the Treasurer. However, I understand that not every company that has been granted an authority under the Insurance Act has in fact lodged a deposit since subsidiary companies are exempt from the requirement if the parent company has already lodged a deposit. When the Insurance Act was passed it was envisaged that the deposit requirement under the Insurance (Deposits) Act would be terminated after the new system of supervision of insurers was fully effective.

Legislative provision was therefore made for the return of all deposits during a 2-year period following the commencement of the authorisation provisions of the Insurance Act; that is from 1 August 1974 to 31 July 1976. I am informed that the Insurance Commissioner is making good progress in examining applications for authority from companies wishing to carry on insurance business under the Insurance Act. In excess of 50 per cent of applicant companies have been granted an authority. However, there are a significant number of companies which have either not applied for or could be refused an authority to carry on insurance business. Those companies will be required, subject to the transitional provisions of the Insurance Act, to terminate their insurance business in a manner satisfactory to the Commissioner. I am informed that it may take many months, even years, before this process will be completed by the Insurance Commissioner. In the circumstances, the Government has extended the operation of the deposit system until 3 1 July 1979 in order to continue to protect policy owners of companies not granted an authority under the Insurance Act. However, I think it would be grossly unfair to retain deposits from those companies who have complied with the more stringent requirements of the Insurance Act. This Bill relieves those insurers of the obligation to lodge deposits, which can be up to $200,000 in individual cases. I therefore support the Bill.

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