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General Insurance Reform Bill 2001

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1998-1999-2000-2001

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

General Insurance Reform Bill 2001

 

 

(1)     Schedule 1, item 6, page 4 (line 11), omit “general insurer who”, substitute “body corporate that”.

[section 3—definitions]

(2)     Schedule 1, item 6, page 4 (after line 15), at the end of the definition of foreign general insurer , add:

             ; and (c)  is authorised under section 12 to carry on insurance business in Australia.

[section 3—definitions]

(3)     Schedule 1, item 7, page 4 (lines 18 and 19), omit “and includes a foreign general insurer”.

[section 3—definitions]

(4)     Schedule 1, item 22, page 8 (line 22), after “corporate”, insert “(other than a Lloyd’s underwriter)”.

[section 10—Lloyd’s underwriters]

(5)     Schedule 1, item 22, page 9 (line 25), omit “, in the approved form,”, substitute “in writing”.

[section 12—authorisation]

(6)     Schedule 1, item 22, page 9 (lines 27 and 28), omit note 1.

[section 12—authorisation]

(7)     Schedule 1, item 22, page 9 (line 29), omit “Note 2”, substitute “Note”.

[section 12—authorisation]

(8)     Schedule 1, item 22, page 9 (after line 32), after subsection (1), insert:

          (1A)  APRA may require the body corporate to provide a statutory declaration in relation to information or documents provided in relation to the application.

[section 12—authorisation]

(9)     Schedule 1, item 22, page 12 (after line 11), at the end of subsection (1), add:

               ; or (g)  the insurer has not, within the period of 12 months after it was granted an authority under this Part, carried on insurance business in Australia.

[section 15—revocation of authorisation]

(10)   Schedule 1, item 22, page 12 (line 12), after “authorisation”, insert “under this section”.

[section 15—revocation of authorisation]

(11)   Schedule 1, item 22, page 12 (lines 21 and 22), omit all the words from and including “APRA” to and including “date”.

[section 15—revocation of authorisation]

(12)   Schedule 1, item 22, page 12 (after line 22), after subsection (3), insert:

          (3A)  To avoid doubt, APRA may give a notice under subsection (3) to a general insurer even if, at the time the notice is given, APRA is not satisfied that the insurer has no liabilities in respect of insurance business carried on by it in Australia.

          (3B)  If APRA gives a notice under subsection (3) to a general insurer, APRA must not revoke the insurer’s authorisation until after the date specified in the notice, and after consideration of any submission, as mentioned in paragraph (3)(b).

[section 15—revocation of authorisation]

(13)   Schedule 1, item 22, page 13 (lines 20 to 25), omit all the words from and including “to:” to and including “direction” (second occurring), substitute “to arrange, subject to APRA’s approval, to assign those liabilities to one or more other general insurers. The insurer must effect the assignment of the liabilities within the period specified in the direction and comply with such conditions relating to the assignment as are specified by APRA in the direction”.

[section 17—assignment of liabilities]

(14)   Schedule 1, item 22, page 13 (lines 26 to 33), omit subsection (2) (including the note), substitute:

             (2)  Subsection (1) has effect despite subsection 17B(1).

Note:          A general insurer who has asked APRA for a revocation under section 16 may, for the purpose of obtaining the revocation, make an application to the Federal Court under Division 3A for an order transferring the insurer’s insurance business to another general insurer.

[section 17—assignment of liabilities]

(15)   Schedule 1, item 22, page 14 (after line 13), after subsection (4), insert:

          (4A)  Where a general insurer (the first general insurer ) accepts an assignment of liabilities from another general insurer (the second general insurer ) approved by APRA under subsection 17(4), the following are taken to have occurred:

                     (a)  policies in respect of which liability is accepted by the first general insurer (the transferring policies ) are to be treated for all purposes as if each policy had been transferred by novation from the second general insurer to the first general insurer;

                     (b)  a policyholder of a transferring policy is taken to have the same rights against the first general insurer as the person would have against that insurer had the person’s policy been transferred by novation to the first general insurer;

                     (c)  the rights of the first general insurer against policyholders of transferring policies are the same as they would be had the transferring policies been transferred by novation to the first general insurer from the second general insurer.

[section 17—assignment of liabilities]

(16)   Schedule 1, item 22, page 14 (after line 25), at the end of section 17, add:

             (8)  A general insurer commits an offence if:

                     (a)  the insurer does, or fails to do, an act; and

                     (b)  by doing or failing to do the act, the insurer fails to comply with a direction under this section.

Maximum penalty: 60 penalty units.

             (9)  An offence against subsection (8) is an offence of strict liability.

Note 1:       For strict liability , see section 6.1 of the Criminal Code .

Note 2:       Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 3:       If a body corporate is convicted of an offence against this section, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty above.

[section 17—assignment of liabilities]

(17)   Schedule 1, item 22, page 14 (before line 26), before Division 4, insert:

Division 3A Transfer and amalgamation of insurance business

17A   Interpretation

                   A reference in this Division to a body corporate affected by a scheme is a reference to a body corporate that is a party or proposed party to an agreement or deed by which the transfer or amalgamation provided for by the scheme is, or is to be, carried out.

17B   Transfer or amalgamation of insurance business

             (1)  No part of the insurance business of a general insurer may be:

                     (a)  transferred to another general insurer; or

                     (b)  amalgamated with the business of another general insurer;

except under a scheme confirmed by the Federal Court.

Note:          A transfer or amalgamation of an insurance business may also require approval under the Insurance Acquisitions and Takeovers Act 1991 .

             (2)  The reference in paragraph (1)(a) to a general insurer includes a reference to a body corporate that is authorised under this Act but has not begun to carry on insurance business in Australia.

             (3)  A scheme must set out:

                     (a)  the terms of the agreement or deed under which the proposed transfer or amalgamation is carried out; and

                     (b)  particulars of any other arrangements necessary to give effect to the scheme.

             (4)  Subsection (1) does not require that a transfer or amalgamation of insurance business be made under a scheme approved by the Federal Court if:

                     (a)  immediately before the transfer or amalgamation, the insurance business is carried on outside Australia; and

                     (b)  the transfer or amalgamation will result in the insurance business being carried on outside Australia.

17C   Steps to be taken before application for confirmation

             (1)  In this section:

affected policyholder means the holder of a policy affected by a scheme.

approved summary means a summary approved by APRA.

             (2)  An application for confirmation of a scheme may not be made unless:

                     (a)  a copy of the scheme and any actuarial report on which the scheme is based have been given to APRA in accordance with the prudential standards; and

                     (b)  notice of intention to make the application has been published by the applicant in accordance with the prudential standards; and

                     (c)  an approved summary of the scheme has been given to every affected policyholder.

             (3)  Without limiting the provision that may be made by the prudential standards for the purposes of paragraph (2)(b), the notice referred to in that paragraph must include, in relation to each body corporate affected by the scheme, details of the place and time at which an affected policyholder may obtain a copy of the scheme.

             (4)  An affected policyholder is entitled, on the person’s request, to be provided by the company with one copy of the scheme free of charge.

             (5)  The Federal Court may dispense with the need for compliance with paragraph (2)(c) in relation to a particular scheme if it is satisfied that, because of the nature of the scheme or the circumstances attending its preparation, it is not necessary that the paragraph be complied with.

17D   Actuarial report on scheme

             (1)  When a copy of a scheme has been given to APRA for the purpose of paragraph 17C(2)(a), APRA may arrange for an independent actuary to make a written report on the scheme.

             (2)  APRA may give a copy of the report to each body corporate affected by the scheme.

17E   Application to Court

             (1)  Any of the bodies corporate affected by a scheme may apply to the Federal Court for confirmation of the scheme.

             (2)  An application for confirmation must be made in accordance with the prudential standards.

             (3)  APRA is entitled to be heard on an application.

17F   Confirmation of scheme

             (1)  The Federal Court may:

                     (a)  confirm a scheme without modification; or

                     (b)  confirm the scheme subject to such modifications as it thinks appropriate; or

                     (c)  refuse to confirm the scheme.

             (2)  The Federal Court may make such orders as it thinks fit in relation to reinsurance.

17G   Effect of confirmation etc.

                   When a scheme is confirmed:

                     (a)  it becomes binding on all persons; and

                     (b)  it has effect in spite of anything in the constitution of any body corporate affected by the scheme; and

                     (c)  the body corporate on whose application the scheme was confirmed must cause a copy of the scheme to be lodged at an office of ASIC in every State and Territory in which a company affected by the scheme carried on business.

17H   Costs of actuary’s report

             (1)  When a scheme is confirmed, the body corporate that applied for the confirmation becomes liable to pay to the Commonwealth an amount equal to the expenses reasonably incurred by APRA in obtaining a report under section 17D in relation to the scheme.

             (2)  An amount due under subsection (1) may be recovered by the Commonwealth as a debt in any court of competent jurisdiction.

17I   Documents to be lodged in case of transfer or amalgamation

             (1)  If any part of the insurance business carried on by a general insurer is transferred to, or amalgamated with, the insurance business of another body corporate, the latter body corporate must give APRA such documents as are required by the prudential standards.

             (2)  The documents must be lodged within the time fixed by the prudential standards or within such further time as APRA, in accordance with the prudential standards, allows.

            [Division 3A—transfer and amalgamation of insurance business]

(18)   Schedule 1, item 22, page 14 (line 29), omit “, in the approved form,”, substitute “in writing”.

[section 18—authorisation]

(19)   Schedule 1, item 22, page 15 (lines 5 and 6), omit note 2.

[section 18—authorisation]

(20)   Schedule 1, item 22, page 15 (line 7), omit "Note 3”, substitute “Note 2”.

[section 18—authorisation]

(21)   Schedule 1, item 22, page 15 (after line 10), after subsection (1), insert:

             (2)  APRA may require the body corporate to provide a statutory declaration in relation to information or documents provided in relation to the application.

[section 18—authorisation]

(22)   Schedule 1, item 22, page 17 (line 8), after “authorisation”, insert “under this section”.

[section 21—authorisation]

(23)   Schedule 1, item 22, page 22 (after line 14), at the end of section 27, add:

             (7)  A general insurer commits an offence if:

                     (a)  the insurer does, or fails to do, an act; and

                     (b)  by doing or failing to do the act, the insurer fails to comply with a direction under this section.

Maximum penalty: 60 penalty units.

             (8)  An offence against subsection (7) is an offence of strict liability.

Note 1:       For strict liability , see section 6.1 of the Criminal Code .

Note 2:       Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 3:       If a body corporate is convicted of an offence against this section, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty above.

[section 27—removal of director]

(24)   Schedule 1, item 22, page 24, after line 25, after subsection (3), insert:

          (3A)  APRA may modify a prudential standard in respect of a particular general insurer, authorised NOHC or subsidiary of a general insurer or authorised NOHC.

          (3B)  In modifying a prudential standard, APRA must have regard to the particular business and circumstances of the general insurer, authorised NOHC or subsidiary concerned.

          (3C)  If APRA modifies a prudential standard in respect of a particular general insurer, authorised NOHC or subsidiary of a general insurer or authorised NOHC under subsection (3A), APRA must give written notice of the modification to the general insurer, authorised NOHC or subsidiary concerned.

          (3D)  The prudential standards may provide for APRA to exercise powers and discretions under the standards, including but not limited to discretions to approve, impose, adjust or exclude specific prudential requirements in relation to the following:

                     (a)  a particular general insurer, authorised NOHC or subsidiary of a general insurer or authorised NOHC;

                     (b)  specified general insurers, authorised NOHCs or subsidiaries of general insurers or authorised NOHCs;

                     (c)  a class of general insurers, authorised NOHCs or subsidiaries of general insurers or authorised NOHCs.

          (3E)  APRA must obtain the Treasurer’s written agreement before modifying a prudential standard under subsection (3A).

[section 32—prudential standards]

(25)   Schedule 1, item 22, page 24 (after line 31), at the end of section 32, add:

             (6)  Despite section 49A of the Acts Interpretation Act 1901 , the standards may make provision for or in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.

[section 32—prudential standards]

(26)   Schedule 1, item 23, page 29 (after line 17), at the end of subsection (1), add:

               ; or (c)  does not meet the eligibility criteria for such an appointment as set out in the prudential standards.

[section 42—revocation of approval]

(27)   Schedule 1, item 23, page 30 (after line 16), at the end of subsection (2), add:

               ; or (c)  does not meet the eligibility criteria for such an appointment as set out in the prudential standards.

[section 44—disqualification]

(28)   Schedule 1, item 23, page 31 (after line 6), at the end of subsection (3), add:

             ; and (c)  meets the eligibility criteria for such an appointment as set out in the prudential standards.

[section 45—when a disqualification may be revoked]

(29)   Schedule 1, item 23, page 31 (line 25), after “happened”, insert “and the reasons for and circumstances of the event”.

[section 46—notification]

(30)   Schedule 1, item 23, page 31 (line 28), omit “40”, substitute “39”.

[section 47—exemption from requirement to appoint actuary]

(31)   Schedule 1, item 23, page 31 (after line 29), after subsection (1), insert:

          (1A)  An exemption under subsection (1) may be subject to one or more conditions specified by APRA in the determination.

[section 47—exemption from requirement to appoint actuary]

(32)   Schedule 1, item 23, page 31 (line 30), after “determination”, insert “under subsection (1)”.

[section 47—exemption from requirement to appoint actuary]

(33)   Schedule 1, item 23, page 32 (line 2), omit “40”, substitute “39”.

[section 47—exemption from requirement to appoint actuary]

(34)   Schedule 1, item 23, page 32 (after line 3), at the end of section 47, add:

             (4)  An exemption under subsection (3) may be subject to one or more conditions specified in the prudential standards.

             (5)  A general insurer commits an offence if:

                     (a)  the insurer does, or fails to do, an act; and

                     (b)  doing or failing to do the act results in a contravention of a condition of the insurer’s exemption under subsection (1) or (3).

Maximum penalty: 60 penalty units.

             (6)  An offence against subsection (5) is an offence of strict liability.

Note 1:       For strict liability , see section 6.1 of the Criminal Code .

Note 2:       Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 3:       If a body corporate is convicted of an offence against this section, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty above.

[section 47—exemption from requirement to appoint actuary]

(35)   Schedule 1, item 23, page 32 (lines 14 and 15), omit “ Australian Securities and Investments Commission Act 1989 ”, substitute “ Australian Securities and Investments Commission Act 2001 ”.

[section 48—consequential amendment]

(36)   Schedule 1, item 23, page 34 (after line 9), after paragraph (d), insert:

               ; or (e)  the general insurer, NOHC or subsidiary:

                              (i)  has contravened this Act or any other law; and

                             (ii)  the contravention is of such a nature that it may affect significantly the interest of policyholders of the general insurer or of a general insurer that is a subsidiary of the NOHC;

[section 49A—additional duties of auditors]

(37)   Schedule 1, item 23, page 35 (line 21), omit “ Investigation by an independent actuary ”, substitute “ Actuarial investigation required by APRA ”.

[heading to Division 3]

(38)   Schedule 1, item 23, page 36 (line 28), omit “auditor’s”, substitute “actuary’s”.

[section 49E—actuarial investigation]

(39)   Schedule 1, item 23, page 38 (line 9), omit “21”, substitute “7”.

[section 49H—delegate’s decision to extend time]

(40)   Schedule 1, item 23, page 38 (line 11), omit “21”, substitute “7”.

[section 49H—delegate’s decision to extend time]

(41)   Schedule 1, item 23, page 38 (line 16), omit “21”, substitute “7”.

[section 49H—delegate’s decision to extend time]

(42)   Schedule 1, item 23, page 39 (after line 22), after paragraph (a), insert:

                    (aa)  the reports referred to in section 49J; and

[section 49L—lodgment of auditor’s certificates]

(43)   Schedule 1, items 30 and 31, page 43 (lines 6 to 15), omit the items, substitute:

30  Subsection 51(1)

Omit all the words from and including “Where” to and including “may:”, substitute:

                   Where:

                    (aa)  it appears to APRA that a body corporate that is a general insurer or authorised NOHC:

                              (i)  is, or is likely to become, unable to meet its liabilities; or

                             (ii)  has contravened or failed to comply with a provision of this Act or a condition or direction applicable under this Act; or

                   (ab)  it appears to APRA that there is, or there may be, a risk to the security of the general insurer’s or authorised NOHC’s assets; or

                    (ac)  it appears to APRA that there is, or there may be, a sudden deterioration in the general insurer’s or authorised NOHC’s financial condition; or

                   (ad)  the Treasurer agrees, in writing, to the giving of a notice under this subsection;

APRA may:

[section 51—directions]

(44)   Schedule 1, item 36, page 43 (lines 25 to 29), omit the item, substitute:

36  Subsection 52(1)

Omit all the words from and including “Where” to and including “this Act;”, substitute:

                   Where:

                    (aa)  it appears to APRA that a body corporate that is a general insurer or authorised NOHC:

                              (i)  is, or is likely to become, unable to meets its liabilities; or

                             (ii)  has contravened or failed to comply with a provision of this Act or a condition or direction applicable to it under this Act; or

                   (ab)  it appears to APRA that there is, or there may be, a risk to the security of a general insurer’s or authorised NOHC’s assets; or

                     (a)  it appears to APRA that there is, or there may be, a sudden deterioration in a general insurer’s or authorised NOHC’s financial condition; or

                     (b)  the Treasurer agrees, in writing, to the giving of a notice under this subsection;

Note:       The heading to section 52 is altered by omitting “ body corporate ” and substituting “ general insurer, authorised NOHC or subsidiary ”.

36A  Subsection 52(1)

Omit “, on specified grounds”.

36B  After subsection 52(1)

Insert:

       (1AA)  A notice under subsection (1) must specify which of paragraphs 1(aa), (ab), (a) or (b) is being relied on to give the notice.

       (1AB)  Despite subsection (1), APRA may specify a period of less than 14 days in a notice under that subsection if the Treasurer has agreed, in writing, to the lesser period being specified.

[section 52—investigation]

(45)   Schedule 1, page 44 (after line 13), after item 41, insert:

41A  Subsection 55(1)

After “body corporate” (first occurring), insert “that is a general insurer, authorised NOHC or the subsidiary of a general insurer or authorised NOHC”.

Note:       The heading to section 55 is altered by omitting “ the ” (wherever occurring).

41B  Subsection 55(1)

Omit “the whole or part of the affairs of which APRA or the inspector is investigating”.

41C  After subsection 55(1)

Insert:

          (1A)  APRA or the inspector may give a notice to a prescribed person in relation to a body corporate only if:

                     (a)  APRA or the inspector is investigating the whole or part of the affairs of the body corporate or a body corporate that is associated with that body corporate; or

                     (b)  the notice is given for the purposes of APRA’s monitoring functions under section 38.

[section 55—investigation]

(46)   Schedule 1, page 44 (before line 14), before item 42, insert:

41D  Paragraph 59(1)(b)

Repeal the paragraph, substitute:

                     (b)  an inspector may by signed instrument delegate his or her powers to:

                              (i)  an APRA staff member, within the meaning of the Australian Prudential Regulation Authority Act 1998 ; or

                             (ii)  a person included in a class of persons approved in writing by APRA for the purposes of this subparagraph.

[section 59—delegation]

(47)   Schedule 1, page 45 (after line 26), after item 52, insert:

52A  Paragraph 93(10)(c)

Omit “ Acts Interpretation Act 1901-1966 ”, substitute “ Acts Interpretation Act 1901 ”.

[section 93—Lloyd’s underwriters]

(48)   Schedule 1, item 57, page 46 (lines 21 to 24), omit “purpose of ascertaining whether a body corporate that is a general insurer, authorised NOHC or the subsidiary of a general insurer or authorised NOHC has complied or is complying with the provisions of this Act”, substitute “purposes of this Act”.

[section 115—production of information]

(49)   Schedule 1, item 57, page 46 (lines 26 to 28), omit “the body corporate to produce to APRA or the person any books required by or under this Act to be kept by the body corporate”, substitute “a general insurer, authorised NOHC or the subsidiary of an authorised insurer or authorised NOHC to produce to APRA or the person information, books, accounts or documents in respect of the general insurer, authorised NOHC or subsidiary of a general insurer or authorised NOHC”.

[section 115—production of information]

(50)   Schedule 1, item 57, page 46 (lines 29 and 30), omit “of the books”, substitute “such books, accounts or documents”.

[section 115—production of information]

(51)   Schedule 1, item 57, page 47 (line 4), omit “books”, substitute “information, books, accounts or documents in respect”.

[section 115—production of information]

(52)   Schedule 1, item 57, page 47 (lines 5 and 6), omit “of the books”, substitute “such books, accounts or documents”.

[section 115—production of information]

(53)   Schedule 1, item 57, page 47 (after line 6), at the end of the item, add:

Note:       The heading to section 115 is altered by omitting “ books ” and substituting “ information, books, accounts or documents ”.

[section 115—production of information]

(54)   Schedule 1, item 60, page 48 (lines 9 and 10), omit all the words from and including “section 116” to and including “and” (first occurring).

[section 116A—assets and liabilities]

(55)   Schedule 1, item 60, page 48 (line 21), omit “those purposes”, substitute “the purposes of section 116 (General insurer not to carry on insurance business after start of winding up) and section 28”.

[section 116A—assets and liabilities

(56)   Schedule 1, item 60, page 48 (line 32), omit “those purposes”, substitute “the purposes of section 28”.

[section 116A—assets and liabilities

(57)   Schedule 1, item 60, page 49 (after line 10), at the end of section 116A, add:

             (4)  For the purposes of section 116 and section 28, unless the contrary intention appears, a reference to liabilities of a body corporate includes a reference to provision for liabilities made in its accounts, or directed in accordance with section 49M to be made, but does not include:

                     (a)  a liability in respect of share capital; or

                     (b)  where the body corporate is registered under the Life Insurance Act 1995 , a liability that is, in accordance with that Act:

                              (i)  referable to a class of life insurance business carried on by the body corporate in respect of which it has established a statutory fund under that Act; or

                             (ii)  charged on any of the assets of such a statutory fund.

             (5)  The whole or such part as APRA determines of an amount owed to a body corporate by way of portions of premiums retained under a contract of reinsurance by a person outside Australia are, for the purposes of section 28, to be taken to be an asset in Australia of the body corporate.

             (6)  Where:

                     (a)  a determination has been made under subsection (5); and

                     (b)  it appears at any time to APRA that the determination is no longer necessary or should be varied;

APRA must, by notice in writing served on the body corporate concerned, revoke or vary the determination, as the case may be.

[section 116A—assets and liabilities]

(58)   Schedule 1, page 50 (after line 6), after item 65, insert:

65A  Subsection 122(1)

Omit “Authorized Insurers”, substitute “General Insurers and Authorised NOHCs”.

[section 122—register to be kept]

(59)   Schedule 1, page 50 (before line 7), before item 66, insert:

65B  Paragraph 123(1)(a)

Omit “ Authoriz ed Insurers”, substitute “General Insurers and Authorised NOHCs”.

[section 123—inspection]

(60)   Schedule 1, page 50 (after line 8), after item 66, insert:

66A  After section 125

Insert:

126   Acceptance and enforcement of undertakings

             (1)  APRA may accept a written undertaking given by a person in connection with a matter in relation to which APRA has a function or power under this Act.

             (2)  The person may withdraw or vary the undertaking at any time, but only with APRA’s consent.

             (3)  If APRA considers that the person who gave the undertaking has breached any of its terms, APRA may apply to the Federal Court for an order under subsection (4).

             (4)  If the Federal Court is satisfied that the person has breached a term of the undertaking, the Federal Court may make all or any of the following orders:

                     (a)  an order directing the person to comply with that term of the undertaking;

                     (b)  an order directing the person to pay to the Commonwealth an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach;

                     (c)  any order that the Federal Court considers appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach;

                     (d)  any other order that the Federal Court considers appropriate.

[section 126—undertakings]

(61)   Schedule 1, page 50 (before line 9), before item 67, insert:

66B  Before section 128

Insert:

127   Severability

             (1)  Without prejudice to its effect apart from this section, this Act also has effect as provided by this section.

             (2)  This Act has, by force of this subsection, the effect it would have if reference to a NOHC in relation to a body corporate were expressly limited to a reference to a NOHC of a general insurer.

             (3)  This Act has, by force of this subsection, the effect it would have if the Act separately provided as mentioned in the following paragraphs:

                     (a)  the Act has effect as if a reference to a subsidiary of a general insurer were expressly limited to a reference to such a subsidiary that is a corporation to which paragraph 51(xx) of the Constitution applies;

                     (b)  this Act has effect as if a reference to a subsidiary of a general insurer were expressly limited to a reference to such a subsidiary that carries on banking with respect to which the Parliament has the power to make laws under paragraph 51(xiii) of the Constitution.

             (4)  This Act has, by force of this subsection, the effect it would have if the Act separately provided as mentioned in the following paragraphs:

                     (a)  the Act has effect as if a reference to a subsidiary of an authorised NOHC were expressly limited to a reference to such a subsidiary that is a corporation to which paragraph 51(xx) of the Constitution applies;

                     (b)  this Act has effect as if a reference to a subsidiary of an authorised NOHC were expressly limited to a reference to such a subsidiary of an authorised NOHC, being a NOHC that carries on banking with respect to which the Parliament has the power to make laws under paragraph 51(xiii) of the Constitution.

[section 127—severability]

(62)   Schedule 1, page 52 (after line 6), at the end of the Schedule, add:

81  Section 131

Omit “or 105”.

[section 131—costs of investigations]

(63)   Schedule 2, page 54 (after line 5), after item 3, insert:

3A  Effect of authority under old Act

(1)       An authority to carry on insurance business granted to a body corporate under section 23 or 24 of the old Act ceases to be in force immediately after an authority is granted to the body corporate under section 12 of the new Act.

(2)       However, subitem (1) is subject to any determination under item 4 in respect of the body corporate.

[transitional provision]

(64)   Schedule 2, page 57 (after line 6), after item 10, insert:

10A  Application of the old and new Act to certain insurers after the end of the transition period

(1)       Items 4, 5, 6, 7, 8, 9 and 10 continue to apply (with the modifications mentioned in subitem (2)) to a body corporate at a time after the end of the transition period if:

                     (a)  the body corporate:

                              (i)  is authorised under the old Act to carry on insurance business; or

                             (ii)  is a general insurer under the new Act; and

                     (b)  APRA is satisfied at that time that the body corporate is carrying on insurance business in Australia for the sole purpose of discharging liabilities that arose before the end of the transition period.

(2)       Items 4, 5, 6, 7, 8, 9 and 10 continue to apply to the body corporate as if:

                     (a)  a reference in those items to the transition period included a reference to times after the end of the transition period; and

                     (b)  a reference in those items to a specified period included a reference to an indefinite period.

[transitional provision]

(65)   Schedule 3, page 58 (after line 10), after item 1, insert:

1A  After subsection 56(6)

Insert:

          (6A)  It is not an offence if the disclosure of protected information or the production of a protected document is to:

                     (a)  an auditor who has provided, or is providing, professional services to a general insurer, authorised NOHC or a subsidiary of a general insurer or authorised NOCH; or

                     (b)  an actuary who has provided, or is providing, professional services to a general insurer, authorised NOHC or a subsidiary of a general insurer or authorised NOCH;

and the disclosure is for the purposes of the performance of APRA’s functions, or the exercise of APRA’s powers, under a law of the Commonwealth or of a State or Territory.

[section 56—secrecy]