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Schedule 3—Amendment of the Life Insurance Act 1995

Schedule 3 Amendment of the Life Insurance Act 1995

Part 1 Main amendments

Life Insurance Act 1995

1  At the end of section 4

Add:

             (4)  Without prejudice to its effect apart from this subsection, this Act also has the effect it would have if each reference to a holding company of a life company were, by express provision, confined to such a holding company that:

                     (a)  is a corporation to which paragraph 51(xx) of the Constitution applies; or

                     (b)  carries on banking with respect to which the Parliament has the power to make laws under paragraph 51(xiii) of the Constitution.

2  After subparagraph 7(1)(a)(iii)

Insert:

                          (iiia)  Part 10A; and

3  At the end of subsection 7A(1)

Add:

                    ; (j)  section 230AAA.

4  After section 15

Insert:

15A   Relevant group of bodies corporate

                   For the purposes of this Act:

                     (a)  a life company and its subsidiaries together constitute a relevant group of bodies corporate ; and

                     (b)  a registered NOHC and its subsidiaries together also constitute a relevant group of bodies corporate .

5  Section 16 (heading)

Repeal the heading, substitute:

16   Related bodies corporate and subsidiaries

6  Section 16ZE

Repeal the section, substitute:

16ZE   Limited application of Act to eligible foreign life insurance companies

             (1)  Subject to this section, this Act does not apply in relation to life insurance business carried on outside Australia by an eligible foreign life insurance company.

             (2)  Subsection (1) does not apply to sections 180, 181 and 182.

             (3)  Subsection (1) also does not apply to the provisions listed in subsection (4), however those provisions do not apply in relation to:

                     (a)  business of an eligible foreign life insurance company (other than Australian business assets and liabilities); or

                     (b)  the management of an eligible foreign life insurance company, to the extent that the management relates to such business of the eligible foreign life insurance company.

             (4)  The provisions are as follows:

                     (a)  Divisions 1, 1AA and 1A of Part 8;

                     (b)  sections 183, 183A, 183B, 183, 184, 185, 186, 187 and 188.

             (5)  Subsection 165(4) does not apply to the issue of policies by an eligible foreign life insurance company in the course of carrying on life insurance business carried on outside Australia by the company.

             (6)  In this section:

asset has the same meaning as in the Financial Sector (Transfer and Restructure) Act 1999 .

Australian business assets and liabilities , of an eligible foreign life insurance company, means the following:

                     (a)  the assets and liabilities of the eligible foreign life insurance company in Australia;

                     (b)  any other assets and liabilities of the eligible foreign life insurance company that:

                              (i)  are related to its operations in Australia; and

                             (ii)  if regulations are made for the purposes of this subparagraph—are of a kind specified in those regulations.

liability has the same meaning as in the Financial Sector (Transfer and Restructure) Act 1999 .

7  Section 22

Repeal the section, substitute:

22   Conditions on registration

             (1)  APRA may, at any time, by giving written notice to a company:

                     (a)  impose conditions, or additional conditions, on the company’s registration under section 21; or

                     (b)  vary or revoke conditions imposed on the company’s registration under section 21.

The conditions must relate to prudential matters.

             (2)  A condition may be expressed to have effect despite anything in the prudential standards.

             (3)  Without limiting the conditions that APRA may impose on a registration, APRA may make the registration conditional on a body corporate, of which the company is a subsidiary, being a registered NOHC.

             (4)  If APRA imposes, varies or revokes the conditions on a company’s registration, APRA must:

                     (a)  give written notice to the company; and

                     (b)  ensure that notice that the action has been taken is published in the Gazette .

             (5)  The taking of an action is not invalid merely because of a failure to comply with subsection (4).

23   Breach of registration conditions

             (1)  A company commits an offence if:

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

                     (b)  doing the act or failing to do the act results in a contravention of a condition of the company’s registration under section 21; and

                     (c)  there is no determination in force under section 7A that this subsection does not apply to the company .

Penalty:  300 penalty units.

             (2)  If an individual:

                     (a)  commits an offence against subsection (1) because of Part 2.4 of the Criminal Code ; or

                     (b)  commits an offence under Part 2.4 of the Criminal Code in relation to an offence against subsection (1);

he or she is punishable, on conviction, by a fine not exceeding 60 penalty units.

             (3)  An offence against this section is an offence of strict liability.

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

8  Section 26

Repeal the section, substitute:

26   When APRA may revoke registration

             (1)  APRA may revoke (in writing) a company’s registration under section 21 if APRA is satisfied that the company has no liabilities in respect of life insurance business carried on by it in Australia and that:

                     (a)  the company has failed to comply with:

                              (i)  a requirement of this Act or of an instrument made for the purposes of this Act; or

                             (ii)  a requirement of the Financial Sector (Collection of Data) Act 2001 ; or

                            (iii)  a requirement of a provision of another law of the Commonwealth, if the provision is specified in the regulations; or

                            (iv)  a direction under this Act; or

                             (v)  a condition of the company’s registration; or

                     (b)  it would be contrary to the public interest for the registration to remain in force; or

                     (c)  the company has failed to pay:

                              (i)  an amount of levy or late penalty to which the Financial Institutions Supervisory Levies Collection Act 1998 applies; or

                             (ii)  an amount of charge fixed under section 51 of the Australian Prudential Regulation Authority Act 1998 ; or

                     (d)  the company is insolvent and is unlikely to return to solvency within a reasonable period of time; or

                     (e)  the company has inadequate capital and is unlikely to have adequate capital within a reasonable period of time; or

                      (f)  the company has ceased to carry on life insurance business in Australia; or

                     (g)  the company has not, within the period of 12 months after it was granted a registration, carried on life insurance business in Australia; or

                     (h)  both of the following apply:

                              (i)  the company is a foreign corporation within the meaning of paragraph 51(xx) of the Constitution;

                             (ii)  an authorisation (however described) for the company to carry on life insurance business in a foreign country has been revoked or otherwise withdrawn in that foreign country.

             (2)  Before revoking a company’s registration, APRA must give written notice to the company advising it that:

                     (a)  APRA is considering revoking the registration for the reasons specified; and

                     (b)  the company may make submissions about the revocation to APRA, in accordance with the notice, by a specified date (which must be at least 90 days after the notice is given).

             (3)  To avoid doubt, APRA may give a notice under subsection (2) to a company even if, at the time the notice is given, APRA is not satisfied that the company has no liabilities in respect of life insurance business carried on by it in Australia.

             (4)  If APRA gives a notice under subsection (2) to a company, APRA must not revoke the company’s registration until after the date specified in the notice, and after consideration of any submission, as mentioned in paragraph (2)(b).

             (5)  APRA may decide that subsection (2) does not apply if APRA is satisfied that complying with that subsection could result in a delay in revocation that would be contrary to the public interest.

             (6)  If APRA revokes a company’s registration, APRA must:

                     (a)  give written notice to the company; and

                     (b)  ensure that notice of the revocation is published in the Gazette .

             (7)  A revocation is not invalid merely because of a failure to comply with subsection (6).

9  Subsection 27(1)

Omit “APRA may cancel (under this section) the registration under section 21 of the company by giving the company written notice of cancellation”, substitute “APRA may revoke (under this section) the registration under section 21 of the company by giving the company written notice of revocation”.

10  Subsection 27(2)

Repeal the subsection, substitute:

             (2)  Revocation under this section of the registration of a company takes effect when APRA gives the company written notice of revocation.

11  At the end of Division 1 of Part 3

Add:

27A   Assignment of liabilities to enable revocation

             (1)  If APRA considers that it would, under section 26, revoke a company’s registration if the company had no liabilities in respect of life insurance business carried on by it in Australia, APRA may direct the company to arrange, subject to APRA’s approval, to assign those liabilities to one or more other companies that are registered under section 21. The company 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.

             (2)  Subsection (1) has effect despite subsection 190(1).

Note:          A company that has asked APRA for a revocation under section 27 may, for the purpose of obtaining the revocation, make an application to the Court under Part 9 for an order transferring the company’s life insurance business to another company.

             (3)  A company must not assign its liabilities under this section, and a purported assignment under this section is of no effect, unless the assignment is approved by APRA under subsection (4).

             (4)  APRA may only approve a proposed assignment of a company’s liabilities under this section if APRA is satisfied that the assignment is appropriate, having regard to:

                     (a)  the interests of the company’s policy owners; and

                     (b)  the interests of the policy owners of the company or companies to which the liabilities are to be assigned; and

                     (c)  the public interest; and

                     (d)  any other matter APRA considers relevant.

The approval must be in writing and may be made subject to specified conditions.

             (5)  If a company (the first company ) accepts an assignment of liabilities from another company (the second company ) approved by APRA under subsection (4), the following are taken to have occurred:

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

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

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

             (6)  If APRA approves an assignment, the company must:

                     (a)  comply with the conditions on the approval; and

                     (b)  give reasonable notice (in writing) of the assignment to the company’s policy owners; and

                     (c)  give APRA such written evidence of the assignment as APRA reasonably requires.

             (7)  An assignment of liabilities under this section may include the assignment of any rights or benefits in connection with life policies in respect of the life insurance business carried on in Australia by the company concerned.

             (8)  A direction under subsection (1) has effect despite anything in the Insurance Acquisitions and Takeovers Act 1991 .

             (9)  A company commits an offence if:

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

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

Penalty:  300 penalty units.

           (10)  If an individual:

                     (a)  commits an offence against subsection (9) because of Part 2.4 of the Criminal Code ; or

                     (b)  commits an offence under Part 2.4 of the Criminal Code in relation to an offence against subsection (9);

he or she is punishable, on conviction, by a fine not exceeding 60 penalty units.

           (11)  An offence against this section is an offence of strict liability.

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

12  At the end of subsection 28B(1)

Add:

The conditions must relate to prudential matters.

13  Subsection 28B(3)

Repeal the subsection, substitute:

             (3)  If APRA imposes, varies or revokes the conditions on a NOHC registration, APRA must:

                     (a)  give written notice to the registered NOHC; and

                     (b)  ensure that notice that the action has been taken is published in the Gazette .

14  After section 28B

Insert:

28BA   Breach of conditions on a NOHC registration

             (1)  A body corporate commits an offence if:

                     (a)  the body corporate does an act or fails to do an act; and

                     (b)  doing the act or failing to do the act results in a contravention of a condition of the body corporate’s NOHC registration; and

                     (c)  there is no determination in force under section 7A that this subsection does not apply to the body corporate .

Penalty:  300 penalty units.

             (2)  If an individual:

                     (a)  commits an offence against subsection (1) because of Part 2.4 of the Criminal Code ; or

                     (b)  commits an offence under Part 2.4 of the Criminal Code in relation to an offence against subsection (1);

he or she is punishable, on conviction, by a fine not exceeding 60 penalty units.

             (3)  An offence against this section is an offence of strict liability.

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

15  Subparagraph 28C(1)(a)(iii)

Repeal the subparagraph, substitute:

                           (iia)  a requirement of a provision of another law of the Commonwealth, if the provision is specified in the regulations; or

                            (iii)  a direction under this Act to the registered NOHC; or

16  Section 28

Omit “cancels a company’s registration by a notice under subsection 26(2) or 27(1), the notice may state that the registration continues in effect in relation to a specified matter or specified period, as though the cancellation”, substitute “revokes a company’s registration by a notice under subsection 26(1) or 27(1), the notice may state that the registration continues in effect in relation to a specified matter or specified period, as though the revocation”.

17  At the end of Division 2 of Part 3

Add:

28AA   APRA may give notice to ensure that life company has a registered NOHC

             (1)  This section applies if:

                     (a)  a body corporate is a holding company of a life company; and

                     (b)  the life company is not a subsidiary of a registered NOHC.

             (2)  APRA may, by notice in writing to the body corporate, require it to ensure, in accordance with the conditions (if any) specified in the notice, that either of the following occurs:

                     (a)  the body corporate becomes a registered NOHC of the life company;

                     (b)  a subsidiary of the body corporate becomes a registered NOHC of the life company.

Note:          See Part 4A of the Financial Sector (Transfer and Restructure) Act 1999 for other provisions that deal with a restructure arrangement to make an operating body a subsidiary of a NOHC.

             (3)  The notice may deal with the time by which, or period during which, it is to be complied with.

             (4)  The body corporate has power to comply with the notice despite anything in its constitution or any contract or arrangement to which it is a party.

             (5)  APRA may, by notice in writing to the body corporate, vary the notice mentioned in subsection (2) if, at the time of the variation, it considers that the variation is necessary and appropriate.

             (6)  The notice mentioned in subsection (2) has effect until APRA revokes it by notice in writing to the body corporate. APRA may revoke the notice mentioned in subsection (2) if, at the time of revocation, it considers that the notice is no longer necessary or appropriate.

             (7)  Section 230F applies in relation to a notice to a body corporate under subsection (2) in the same way in which it applies to a direction to a life company under section 230B.

             (8)  However, section 230F does not apply to a contravention by a body corporate of a requirement in a notice under subsection (2) if:

                     (a)  the contravention happens merely because APRA refuses to register the body corporate (or its subsidiary) under Division 2 of Part 3; and

                     (b)  APRA’s reasons for that refusal do not include the reason that one or more conditions specified in the notice are not satisfied.

18  Paragraph 43(3)(c)

Omit “a statutory fund in a related company that is not a subsidiary of the life company”, substitute “a statutory fund in a company that is related to the life company but is not a subsidiary of the life company”.

19  Subsection 88A(1)

Omit “(1)”.

20  Subsection 88A(2)

Repeal the subsection.

21  Subsection 98A(1)

Omit “(1)”.

22  Subsection 98A(2)

Repeal the subsection.

23  At the end of section 158

Add:

Note:          This section and other provisions relating to judicial management do not apply to the aspects described in subsection 16ZE(3) of the business and management of an eligible foreign life insurance company.

24  Section 159

Before “On an application”, insert “(1)”.

25  Subparagraph 159(a)(i)

Before “the company”, insert “in the absence of external support,”.

26  After subparagraph 159(a)(iii)

Insert:

                          (iiia)  an external administrator has been appointed to a holding company of the company (or a similar appointment has been made in a foreign country in respect of such a holding company), and the requirement in subsection (2) is satisfied; or

                          (iiib)  if the company is an eligible foreign life insurance company—an application for the appointment of an external administrator of the eligible foreign life insurance company, or for a similar procedure in respect of the eligible foreign life insurance company, has been made in a foreign country; or

                          (iiic)  if the company is an eligible foreign life insurance company—an external administrator has been appointed to the eligible foreign life insurance company, or a similar appointment has been made in respect of the eligible foreign life insurance company, in a foreign country; or

27  At the end of section 159

Add:

             (2)  For the purposes of subparagraph (1)(a)(iiia), the requirement in this subsection is that the appointment mentioned in that subparagraph poses a significant threat to:

                     (a)  the operation or soundness of the life company; or

                     (b)  the interests of owners of policies issued by the life company; or

                     (c)  the stability of the financial system in Australia.

             (3)  The regulations may specify that a particular form of support for a company is not to be considered external support for the purposes of subparagraph (1)(a)(i).

28  Section 161

Repeal the section, substitute:

161   Moratorium—effect of judicial management on court and tribunal proceedings

             (1)  A person cannot begin or continue a proceeding in a court or tribunal covered by subsection (9) in respect of a life company if the life company is under judicial management.

             (2)  Subsection (1) does not apply if:

                     (a)  the court or tribunal grants leave for the proceedings to be begun or continued on the ground that the person would be caused hardship if leave were not granted; and

                     (b)  the beginning or continuing of the proceedings is in accordance with such terms (if any) as the court or tribunal imposes.

             (3)  A person intending to apply for leave of the court or tribunal under paragraph (2)(a) must give APRA and the judicial manager at least 10 days notice of the intention to apply (or a shorter period, if the court or tribunal considers that exceptional circumstances make this necessary).

             (4)  APRA may apply to the court or tribunal to be joined as a party to the proceedings for leave. If APRA is joined as a party, the court or tribunal must have regard to APRA’s views in deciding:

                     (a)  whether to grant leave under paragraph (2)(a); and

                     (b)  if the court or tribunal decides to grant the leave—whether to impose terms as mentioned in paragraph (2)(b); and

                     (c)  if the court or tribunal decides to impose such terms—the nature of those terms.

             (5)  The judicial manager may apply to the court or tribunal to be joined as a party to the proceedings for leave. If the judicial manager is joined as a party, the court or tribunal must have regard to the judicial manager’s views in deciding:

                     (a)  whether to grant leave under paragraph (2)(a); and

                     (b)  if the court or tribunal decides to grant the leave—whether to impose terms as mentioned in paragraph (2)(b); and

                     (c)  if the court or tribunal decides to impose such terms—the nature of those terms.

             (6)  Subsection (1) also does not apply if the judicial manager, after considering APRA’s views, consents to the proceedings beginning or continuing.

             (7)  The judicial manager cannot revoke a consent given for the purposes of subsection (6).

             (8)  The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (6).

             (9)  A proceeding in a court or tribunal is covered by this subsection in respect of a life company if it is any of the following:

                     (a)  a proceeding against the life company (including a cross-claim or third party claim against the life company);

                     (b)  a proceeding in relation to property of the life company;

                     (c)  a proceeding to enforce any security (including a mortgage or charge) granted by the life company, or by a related body corporate of the life company, over any property that the life company owns, uses, possesses, occupies or in which the life company otherwise has an interest.

           (10)  Subsection (9) does not cover a proceeding in respect of an offence or a contravention of a provision of a law for which a pecuniary penalty (however described) may be imposed.

           (11)  In this section, a reference to a tribunal includes a reference to the following:

                     (a)  an industrial tribunal;

                     (b)  an arbitral tribunal.

161A   Moratorium—effect of judicial management on enforcement process regarding property

             (1)  No enforcement process in relation to property of a life company can be begun or proceeded with if the life company is under judicial management.

             (2)  Subsection (1) does not apply if:

                     (a)  the Court grants leave for the process to be begun or continued on the ground that the person would be caused hardship if leave were not granted; or

                     (b)  the beginning or continuing of the process is in accordance with such terms (if any) as the Court imposes.

             (3)  A person intending to apply for leave of the Court under paragraph (2)(a) must give APRA and the judicial manager at least 10 days notice of the intention to apply (or a shorter period, if the Court considers that exceptional circumstances make this necessary).

             (4)  APRA may apply to the Court to be joined as a party to the proceedings for leave. If APRA is joined as a party, the Court must have regard to APRA’s views in deciding:

                     (a)  whether to grant leave under paragraph (2)(a); and

                     (b)  if the Court decides to grant the leave—whether to impose terms as mentioned in paragraph (2)(b); and

                     (c)  if the Court decides to impose such terms—the nature of those terms.

             (5)  The judicial manager may apply to the Court to be joined as a party to the proceedings for leave. If the judicial manager is joined as a party, the Court must have regard to the judicial manager’s views in deciding:

                     (a)  whether to grant leave under paragraph (2)(a); and

                     (b)  if the Court decides to grant the leave—whether to impose terms as mentioned in paragraph (2)(b); and

                     (c)  if the Court decides to impose such terms—the nature of those terms.

             (6)  Subsection (1) also does not apply if the judicial manager consents to the process beginning or continuing.

             (7)  The judicial manager cannot revoke a consent given for the purposes of subsection (6).

             (8)  The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (6).

161B   Moratorium—effect of judicial management on disposal of property

             (1)  A person must not dispose of property if:

                     (a)  the property is owned by another person; and

                     (b)  the other person is a life company; and

                     (c)  the life company is under judicial management.

Note:          The Court may grant an injunction under section 235 in respect of a contravention of this subsection.

             (2)  Subsection (1) does not apply if the judicial manager consents to the disposal.

             (3)  The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (2).

161C   Moratorium—Restrictions on exercise of third party property rights

             (1)  Section 440B of the Corporations Act 2001 applies during a period in which a life company is under judicial management in the same way it applies during the administration of a company.

             (2)  For the purposes of this section, treat the reference in paragraph 440B(2)(a) of the Corporations Act 2001 to the administrator’s written consent as being a reference to the judicial manager’s written consent.

             (3)  The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent as mentioned in subsection (2).

             (4)  This section applies despite sections 161, 161A and 161B.

161D   Moratorium—effect of judicial management on supply of essential services

             (1)  If:

                     (a)  a life company is under judicial management; and

                     (b)  the judicial manager requests, or authorises someone else to request, a person or authority (the supplier ) to supply an essential service to the life company in Australia; and

                     (c)  the life company owes an amount to the supplier in respect of the supply of the essential service before the day on which the judicial manager took control of the life company’s business;

the supplier must not:

                     (d)  refuse to comply with the request for the reason only that the amount is owing; or

                     (e)  make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid.

Note:          The Court may grant an injunction under section 235 in respect of a contravention of this subsection.

             (2)  In this section:

essential service has the same meaning as in section 600F of the Corporations Act 2001.

161E   Moratorium—effect of judicial management on annual general meeting

             (1)  This section applies to a life company that is required under section 250N or section 601BR of the Corporations Act 2001 to hold an annual general meeting within a particular period.

             (2)  Despite section 250N and section 601BRof that Act, if the life company is under judicial management at the end of that period, the life company need not hold that annual general meeting.

             (3)  To avoid doubt, subsection (2) does not apply if only part of the business of the life company is under judicial management.

29  Section 162

Repeal the section.

30  After subsection 163(1)

Insert:

          (1A)  If, subsequent to that order, a situation arises where there is no judicial manager of the company, or it appears to the Court that it is likely that such a situation will arise, the Court may appoint another judicial manager of the company.

          (1B)  If the Court appoints 2 or more judicial managers of a company, or appoints one or more additional judicial managers of a company:

                     (a)  except to the extent (if any) specified in a declaration by the Court under paragraph (b), the functions and powers under this Act of a judicial manager of the company may be performed or exercised by:

                              (i)  all of the judicial managers of the company acting jointly; or

                             (ii)  each of the judicial managers of the company acting individually; and

                     (b)  at the time of appointment, the Court may make a declaration for the purposes of paragraph (a), specifying limits or conditions on the judicial managers’ ability to perform functions and exercise powers jointly or individually; and

                     (c)  treat a reference in this Act to a judicial manager as being a reference to whichever one or more of those judicial managers the case requires.

31  Subsection 163(2)

Repeal the subsection, substitute:

             (2)  The Court may cancel the appointment of a judicial manager and appoint another person as judicial manager:

                     (a)  on application by APRA; or

                     (b)  of its own motion.

32  Subsection 163(3)

Omit “However,”.

33  Section 165

Repeal the section, substitute:

165   Effect of judicial management on powers of officers etc.

             (1)  Subject to subsection (4), if the Court has made an order placing a company under judicial management:

                     (a)  at the time the judicial management commences:

                              (i)  a person with the powers and functions of an officer of the company immediately before that time ceases to have those powers and functions; and

                             (ii)  if the company is an eligible foreign life insurance company and there is a person with the powers and functions of a member of the Compliance Committee of the company immediately before that time—the person ceases to have those powers and functions; and

                            (iii)  the judicial manager appointed by the Court starts to have the powers and functions mentioned in subparagraph (i) (and, if applicable, subparagraph (ii)); and

                     (b)  while the company is under judicial management:

                              (i)  if a person mentioned in subparagraph (a)(i) or (ii) purports to act in relation to the company’s business, the purported act is invalid and of no effect; and

                             (ii)  the judicial manager has the powers and functions of the members of the board of directors of the company (collectively and individually), including the board’s powers of delegation.

             (2)  Subject to subsection (4), if the Court has made an order placing part of the business of a company under judicial management:

                     (a)  at the time the judicial management commences:

                              (i)  a person with the powers and functions of an officer of the company in relation to that part of the business immediately before that time ceases to have those powers and functions in relation to that part of the business; and

                             (ii)  if the company is an eligible foreign life insurance company and there is a person with the powers and functions of a member of the Compliance Committee of the company immediately before that time in relation to that part of the business—the person ceases to have those powers and functions in relation to that part of the business; and

                            (iii)  the judicial manager appointed by the Court starts to have the powers and functions mentioned in subparagraph (i) (and, if applicable, subparagraph (ii)) in relation to that part of the business; and

                     (b)  while the company is under judicial management:

                              (i)  if a person mentioned in subparagraph (a)(i) or (ii) purports to act in relation to that part of the business, the purported act is invalid and of no effect; and

                             (ii)  the judicial manager has the powers and functions of the members of the board of directors of the company (collectively and individually), including the board’s powers of delegation, in relation to that part of the business.

             (3)  Subsections (1) and (2) do not remove an officer or member of the Compliance Committee of the company from office.

             (4)  A life company may not issue policies without the leave of the Court if the company, or any part of the business of the company, is under judicial management.

             (5)  Subsection (4) does not prevent the variation of a policy under section 209.

             (6)  In this section, officer has the same meaning as it has in the Corporations Act 2001 .

Note:          This section and other provisions relating to judicial management do not apply to the aspects described in subsection 16ZE(3) of the business and management of an eligible foreign life insurance company.

34  Subsection 165A(1)

Omit “when the management of the company vests in the judicial manager appointed by the Court”, substitute “when the judicial management of the company commences”.

35  Subsection 165A(2)

Omit “while the management of the company is vested in the judicial manager appointed by the Court”, substitute “while the company is under judicial management”.

36  Subsection 165A(3)

Omit “while the management of the company is vested in a judicial manager”, substitute “while the company is under judicial management”.

37  Subsection 165A(4)

Omit “that the management of the company vests in the judicial manager when the judicial management commences”, substitute “that the company is under judicial management”.

38  Section 165B

Repeal the section, substitute:

165B   Judicial management not ground for denial of obligations

             (1)  This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

             (2)  None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

                     (a)  deny any obligations under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

             (3)  The matters are as follows:

                     (a)  the making by the Court of an order that the body corporate, or part of the business of the body corporate, be placed under judicial management;

                     (b)  the commencement of the judicial management of the body corporate, or of part of the business of the body corporate;

                     (c)  if the body corporate is a member of a relevant group of bodies corporate:

                              (i)  the making by the Court of an order that another member of the group, or part of the business of another member of the group, be placed under judicial management; or

                             (ii)  the commencement of the judicial management of another member of the group, or part of the business of another member of the group.

39  Section 166

Before “The appointment of”, insert “(1)”.

40  Section 166

Omit “The appointment of a judicial manager under this Part does not affect”, substitute “None of the matters mentioned in subsection (2) affect”.

41  At the end of section 166

Add:

             (2)  The matters are as follows:

                     (a)  the making by the Court of an order that the life company be placed under judicial management;

                     (b)  the commencement of the judicial management of the life company.

42  Paragraph 168A(4)(a)

After “the Corporations Act 2001 ”, insert “(without limiting the scope of section 251AA of this Act)”.

43  Paragraph 168A(4)(d)

Omit “(as defined in section 761A of the Corporations Act 2001 ) of a financial market (as defined in that section)”, substitute “of a financial market”.

44  Section 168C

Repeal the section, substitute:

168C   Act under section 168A not ground for denial of obligations

             (1)  This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

             (2)  None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

                     (a)  deny any obligations under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

             (3)  The matters are as follows:

                     (a)  a judicial manager doing an act under subsection 168A(1) relating to the body corporate;

                     (b)  if the body corporate is a member of a relevant group of bodies corporate—a judicial manager of another member of the group doing an act under subsection 168A(1) relating to that other member.

45  Subsection 172(5)

Repeal the subsection, substitute:

             (5)  At the time when an order cancelling the judicial management of the life company comes into force:

                     (a)  the judicial manager ceases to have the powers and functions of an officer of the life company; and

                     (b)  the board of directors or other governing body of the life company starts to have those powers; and

                     (c)  if the company is an eligible foreign life insurance company and there is a committee of the company that satisfies the requirements mentioned in subsections 16ZF(1) and (2)—the members of the committee start to have the powers mentioned in that section.

46  Paragraph 175(2)(aa)

Omit “ Financial Sector (Business Transfer and Group Restructure) Act 1999 ”, substitute “ Financial Sector (Transfer and Restructure) Act 1999 ”.

47  After paragraph 175(2)(aa)

Insert:

                   (ab)  to transfer shares in the company to another company under section 25AA of the Financial Sector (Transfer and Restructure) Act 1999 ;

48  Subparagraph 176(3)(b)(i)

After “the Corporations Act 2001 ”, insert “(without limiting the scope of section 251AA of this Act)”.

49  Subparagraph 176(3)(b)(iv)

Omit “(as defined in section 761A of the Corporations Act 2001 ) of a financial market (as defined in that section)”, substitute “of a financial market”.

50  Subsection 177(2)

Omit “the management of the company, or of that part of the business of the company, as the case may be, continues to be vested in the judicial manager”, substitute “the company continues to be under judicial management”.

51  Section 179

Repeal the section, substitute:

179   Immunity

             (1)  A judicial manager, or a person acting on behalf of a judicial manager, is not subject to any liability (whether civil or criminal) in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on the judicial manager by or under this Act.

             (2)  Subsection (1) does not apply to an act or omission in bad faith.

             (3)  A judicial manager is not liable under section 588G of the Corporations Act 2001 . This subsection does not limit the scope of subsection (1).

Signpost to secrecy obligations

             (4)  Part 6 of the Australian Prudential Regulation Authority Act 1998 prohibits certain disclosures of information received by judicial managers under this Act.

52  After Division 1 of Part 8

Insert:

Division 1AA Statutory management of life company

Subdivision A General provisions relating to statutory management

179AA   Consequences of inability or failure of life company etc. to meet certain requirements

Appointment of administrator or control by APRA

             (1)  APRA may take control of a life company’s business or appoint an administrator to take control of the life company’s business if both of the following requirements are met:

                     (a)  APRA is satisfied of the matters of which the Court is required to be satisfied for the purposes of section 158 or 159;

                     (b)  subsection (2) applies.

             (2)  This subsection applies if APRA is satisfied that at least one of the following situations exists:

                     (a)  both:

                              (i)  an AFS statutory manager has taken control of a body corporate under this Act, the Banking Act 1959 or the Insurance Act 1973 (or APRA intends for that to occur); and

                             (ii)  the life company and the body corporate are related bodies corporate;

                     (b)  both:

                              (i)  the life company’s financial position is deteriorating rapidly, or is likely to deteriorate rapidly; and

                             (ii)  failure to respond quickly to the deterioration would be likely to prejudice the interests of policy owners of the life company;

                     (c)  it is likely that the life company will be unable to carry on life insurance business in Australia consistently with the stability of the financial system in Australia;

                     (d)  an external administrator has been appointed to a holding company of the life company (or a similar appointment has been made in a foreign country in respect of such a holding company), and the appointment poses a significant threat to:

                              (i)  the operation or soundness of the life company; or

                             (ii)  the interests of policy owners of the life company; or

                            (iii)  the stability of the financial system in Australia;

                     (e)  if the life company is an eligible foreign life insurance company:

                              (i)  an application for the appointment of an external administrator of the eligible foreign life insurance company, or for a similar procedure in respect of the eligible foreign life insurance company, has been made in a foreign country; or

                             (ii)  an external administrator has been appointed to the eligible foreign life insurance company, or a similar appointment has been made in respect of the eligible foreign life insurance company, in a foreign country.

             (3)  APRA may take any of the actions mentioned in subsection (4) in relation to a body corporate (the target body corporate ) if:

                     (a)  the target body corporate is a body corporate that is any of the following:

                              (i)  a registered NOHC of a life company (the relevant life company );

                             (ii)  a subsidiary of a registered NOHC of a life company (also the relevant life company );

                            (iii)  a subsidiary of a life company (also the relevant life company ); and

                     (b)  the condition in subsection (5), (6) or (7) is satisfied; and

                     (c)  the target body corporate is incorporated in Australia; and

                     (d)  the target body corporate is not a body corporate of a kind specified in regulations (if any) made for the purposes of this paragraph.

             (4)  The actions are as follows:

                     (a)  taking control of the business of the target body corporate;

                     (b)  appointing an administrator to take control of the business of the target body corporate.

             (5)  The condition in this subsection is satisfied if:

                     (a)  either:

                              (i)  a Life Insurance Act statutory manager has taken control of the relevant life company; or

                             (ii)  the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant life company, and APRA intends that a Life Insurance Act statutory manager will take control of the relevant life company; and

                     (b)  APRA considers that the target body corporate provides services that are, or conducts business that is, essential to the capacity of the relevant life company to maintain its operations.

             (6)  The condition in this subsection is satisfied if:

                     (a)  either:

                              (i)  a Life Insurance Act statutory manager has taken control of the relevant life company; or

                             (ii)  the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant life company, and APRA intends that a Life Insurance Act statutory manager will take control of the relevant life company; and

                     (b)  APRA considers that it is necessary for a Life Insurance Act statutory manager to take control of the target body corporate, in order to facilitate the resolution of any of the following:

                              (i)  the relevant life company;

                             (ii)  a registered NOHC of the relevant life company;

                            (iii)  a relevant group of bodies corporate of which the relevant life company is a member;

                            (iv)  a particular member or particular members of such a group.

             (7)  The condition in this subsection is satisfied if:

                     (a)  there is an external administrator of the target body corporate, or APRA considers that, in the absence of external support:

                              (i)  the target body corporate may become unable to meet its obligations; or

                             (ii)  the target body corporate may suspend payment; and

                     (b)  APRA considers that it is necessary to take an action mentioned in subsection (4) in respect of the target body corporate in order to enable the relevant life company to maintain its operations , or in order to facilitate the resolution of any of the following:

                              (i)  the relevant life company;

                             (ii)  a registered NOHC of the relevant life company;

                            (iii)  a relevant group of bodies corporate of which the relevant life company is a member;

                            (iv)  a particular member or particular members of such a group.

             (8)  If:

                     (a)  APRA is in control of a body corporate’s business under this Subdivision—APRA is the Life Insurance Act statutory manager of the body corporate; or

                     (b)  an administrator appointed by APRA is in control of a body corporate’s business under this Subdivision—the administrator is the Life Insurance Act statutory manager of the body corporate.

Note:          This section and other provisions relating to statutory management do not apply to the aspects described in subsection 16ZE(3) of the business and management of an eligible foreign life insurance company.

             (9)  If APRA appoints 2 or more Life Insurance Act statutory managers of a body corporate, or appoints one or more additional Life Insurance Act statutory managers of a body corporate:

                     (a)  the functions and powers under this Act of a Life Insurance Act statutory manager of the body corporate may be performed or exercised by:

                              (i)  all of the Life Insurance Act statutory managers of the body corporate acting jointly; or

                             (ii)  each of the Life Insurance Act statutory managers of the body corporate acting individually (except to the extent (if any) specified in a notice given by APRA under paragraph (b)); and

                     (b)  at the time of appointment, APRA may give all of the Life Insurance Act statutory managers of the body corporate a notice in writing for the purposes of subparagraph (a)(ii), specifying limits or conditions on their ability to perform functions and exercise powers individually; and

                     (c)  treat a reference in this Act to a Life Insurance Act statutory manager as being a reference to whichever one or more of those Life Insurance Act statutory managers the case requires.

179AB   Start of control of body corporate’s business by Life Insurance Act statutory manager

             (1)  After the decision that a Life Insurance Act statutory manager will take control of a body corporate’s business is made, APRA must give the body corporate written notice that the Life Insurance Act statutory manager will take, or is taking, control of the business.

Note:          Subsections 179AQ(4) and 179AZA(3) also require APRA to give notice of the taking of control.

             (2)  A Life Insurance Act statutory manager takes control of a body corporate’s business:

                     (a)  at the time specified in a notice under this section as the time when the Life Insurance Act statutory manager takes control of the business (which must not be earlier than the notice is given); or

                     (b)  if a notice under this section does not specify a time as the time when the Life Insurance Act statutory manager takes control of the business—at the time the notice is given.

             (3)  A notice under subsection (1) is not a legislative instrument.

179AC   Life Insurance Act statutory managers—termination of control

Conditions necessary for termination of control

             (1)  If APRA assumes control of a body corporate’s business or appoints an administrator of a body corporate’s business, APRA must ensure that either it or an administrator of the body corporate’s business has control of the body corporate’s business until:

                     (a)  APRA considers that it is no longer necessary for it or an administrator to remain in control of the body corporate’s business; or

                     (b)  APRA has applied for the body corporate to be wound up.

A termination of control that is permitted under this section is called an ultimate termination of control .

Note:          This provision does not prevent a change, or changes, between control of a body corporate’s business by APRA and an administrator or between administrators.

Events to precede termination

             (2)  Before making an ultimate termination of control by a Life Insurance Act statutory manager of a body corporate’s business, APRA must:

                     (a)  do both of the following:

                              (i)  ensure that directors of the body corporate have been appointed or elected under the body corporate’s constitution at a meeting called by the statutory manager in accordance with the body corporate’s constitution;

                             (ii)  if the body corporate is an eligible foreign life insurance company—ensure that a Compliance Committee of the body corporate is established and operating for the purpose of section 16ZF; or

                     (b)  do both of the following:

                              (i)  appoint directors of the body corporate by instrument in writing;

                             (ii)  if the body corporate is an eligible foreign life insurance company—ensure that a Compliance Committee of the body corporate is established and operating for the purpose of section 16ZF; or

                     (c)  ensure that a liquidator has been appointed:

                              (i)  unless subparagraph (ii) applies—for the body corporate; or

                             (ii)  if the body corporate is an eligible foreign life insurance company—for the body corporate in relation to its Australian business assets and liabilities.

Power to terminate control

             (3)  If the requirements in subsections (1) and (2) are satisfied, APRA may by instrument in writing make an ultimate termination of control of a body corporate’s business by a Life Insurance Act statutory manager.

             (4)  If the Life Insurance Act statutory manager at the time of the termination is an administrator, the instrument of termination also operates as a termination of the appointment of the administrator. A copy of the instrument must be given to the administrator. However, mere failure to give the copy to the administrator does not affect the termination of the appointment.

Period of director’s appointment

             (5)  If a director is elected or appointed under subsection (2), the director takes office on the termination of the Life Insurance Act statutory manager’s control of the body corporate’s business. If the director was appointed by APRA, the director holds office until the body corporate’s next annual general meeting, subject to any terms and conditions imposed by APRA on the director’s appointment. If the director was appointed or elected under the body corporate’s constitution, the constitution governs the appointment.

Note:          For further information about what happens when a Life Insurance Act statutory manager is in control of a body corporate’s business, see Subdivision B.

Subdivision B Provisions dealing with control of a body corporate’s business by a Life Insurance Act statutory manager

179AD   Life Insurance Act statutory manager’s powers and functions

Life Insurance Act statutory manager’s powers and functions include powers and functions of board

             (1)  A Life Insurance Act statutory manager has the powers and functions of the members of the board of directors of the body corporate (collectively and individually), including the board’s powers of delegation.

Note:          When a Life Insurance Act statutory manager takes control of the business of a body corporate, the directors of the body corporate cease to hold office (see section 179AP).

Life Insurance Act statutory manager’s power to obtain information

             (2)  A Life Insurance Act statutory manager may, for the purposes of this Division, require a person who has, at any time, been an officer of the body corporate to give the Life Insurance Act statutory manager any information relating to the business of the body corporate that the Life Insurance Act statutory manager requires. A requirement to give information may include a requirement to produce books, accounts or documents.

             (3)  A person who is or has been an officer of a body corporate commits an offence if:

                     (a)  there is a Life Insurance Act statutory manager in relation to the body corporate; and

                     (b)  under subsection (2), the Life Insurance Act statutory manager requires the person to give information or to produce books, accounts or documents; and

                     (c)  the person fails to comply with the requirement.

Penalty:  Imprisonment for 12 months.

Note 1:       Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.

Note 2:       If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.

             (4)  An individual is not excused from complying with a requirement under subsection (2) to give information on the ground that doing so would tend to incriminate the individual or make the individual liable to a penalty.

             (5)  If:

                     (a)  before giving information in compliance with a requirement under subsection (2), an individual claims that giving the information might tend to incriminate the individual or make the individual liable to a penalty; and

                     (b)  giving the information might in fact tend to incriminate the individual or make the individual so liable;

the information given in compliance with the requirement is not admissible in evidence against the individual in a criminal proceeding or a proceeding for the imposition of a penalty, other than a proceeding in respect of the falsity of the information.

             (6)  Subsections (4) and (5) apply to the production of books, accounts or documents in a corresponding way to the way in which they apply to the giving of information.

Life Insurance Act statutory manager’s power to sell whole or part of body corporate’s business

             (7)  A Life Insurance Act statutory manager may sell or otherwise dispose of the whole or any part of the body corporate’s business. The sale or disposal may occur on any terms and conditions that the Life Insurance Act statutory manager considers appropriate.

Life Insurance Act statutory manager’s powers to alter body corporate’s constitution etc.

             (8)  A Life Insurance Act statutory manager may, if the body corporate concerned is registered under the Corporations Act 2001 , alter the body corporate’s constitution, rules or other arrangements for governance if the alteration:

                     (a)  is necessary or convenient for enabling or facilitating the performance of the Life Insurance Act statutory manager’s functions and duties, or the exercise of the Life Insurance Act statutory manager’s other powers, under this Division in relation to the body corporate; and

                     (b)  promotes:

                              (i)  the protection of the policy owners of the body corporate; and

                             (ii)  financial system stability in Australia.

             (9)  A Life Insurance Act statutory manager may do an act under subsection (7) or (8) despite:

                     (a)  the Corporations Act 2001 ; and

                     (b)  the body corporate’s constitution; and

                     (c)  any contract or arrangement to which the body corporate is party; and

                     (d)  any listing rules of a financial market in whose official list the body corporate is included.

Interpretation

           (10)  In this section:

officer has the meaning given by section 9 of the Corporations Act 2001 .

179AE   Safeguards on exercise of Life Insurance Act statutory manager’s powers and functions

             (1)  Despite anything else in this Subdivision, a Life Insurance Act statutory manager of a body corporate (the body corporate under management ) may not perform a function or exercise a power under section 179AD if:

                     (a)  either or both of subsections (2) and (3) apply; and

                     (b)  the performance of the function or the exercise of the power is not for the purposes of:

                              (i)  an act of the Life Insurance Act statutory manager under subsection 179AF(1); or

                             (ii)  Part 3 or 4 of the Financial Sector (Transfer and Restructure) Act 1999 .

             (2)  This subsection applies if:

                     (a)  the body corporate under management is not a life company; and

                     (b)  the performance or the exercise would result in:

                              (i)  the provision of services by the body corporate under management to a related body corporate of the body corporate under management; or

                             (ii)  the provision of services by a related body corporate of the body corporate under management to the body corporate under management; or

                            (iii)  subject to subsection (4), the transfer of assets between the body corporate under management and another body corporate (otherwise than in the ordinary course of business); and

                     (c)  the performance or the exercise is not required or permitted by a binding arrangement that was in existence immediately before the Life Insurance Act statutory manager started to be in control of the business of the body corporate under management; and

                     (d)  the provision or transfer is not for fair value.

             (3)  This subsection applies if:

                     (a)  the body corporate under management is a registered NOHC of a life company; and

                     (b)  the performance or the exercise requires using funds of the body corporate or a subsidiary of the body corporate to increase the level of capital of the life company to a specified level; and

                     (c)  the shareholders of the body corporate have not agreed, by ordinary resolution, to that use of the funds.

             (4)  Treat the requirement in subparagraph (2)(b)(iii) as not being met if:

                     (a)  the body corporate under management is a registered NOHC of a life company; and

                     (b)  the transfer of assets mentioned in that subparagraph is a transfer of funds to increase the level of capital of the life company to a specified level; and

                     (c)  the shareholders of the body corporate have agreed, by ordinary resolution, to that use of the funds.

179AF   Life Insurance Act statutory manager’s additional powers to facilitate recapitalisation

Powers

             (1)  A Life Insurance Act statutory manager of a body corporate that is a company that has a share capital and is registered under the Corporations Act 2001 may do one or more of the following acts on terms determined by the Life Insurance Act statutory manager:

                     (a)  issue shares, or rights to acquire shares, in the company;

                     (b)  cancel shares, or rights to acquire shares, in the company;

                     (c)  reduce the company’s share capital by cancelling any paid-up share capital that is not represented by available assets;

                     (d)  sell shares, or rights to acquire shares, in the company;

                     (e)  vary or cancel rights or restrictions attached to shares in a class of shares in the company.

Note:          Before doing such an act, the Life Insurance Act statutory manager will usually need to get and consider a report on the fair value of each share or right concerned: see section 179AG.

Giving company members notice of exercise of powers

             (2)  As soon as practicable after doing an act described in paragraph (1)(a), (b), (c) or (e) or subsection (3), the Life Insurance Act statutory manager must give written notice to the persons who were members (under section 231 of the Corporations Act 2001 ) of the company just before the act, identifying the act and explaining its effect on their interests as members.

             (3)  One of the acts to which subsection (2) relates is the offering of shares, or rights to acquire shares, in the company for sale under paragraph (1)(d).

Exercise of powers despite other laws etc.

             (4)  A Life Insurance Act statutory manager may do an act under subsection (1) despite:

                     (a)  the Corporations Act 2001 ; and

                     (b)  the company’s constitution; and

                     (c)  any contract or arrangement to which the company is party; and

                     (d)  any listing rules of a financial market in whose official list the company is included.

Section does not apply to EFLICs etc.

             (5)  This section does not apply in relation to a body corporate that is:

                     (a)  an eligible foreign life insurance company; or

                     (b)  a subsidiary of an eligible foreign life insurance company; or

                     (c)  a registered NOHC of an eligible foreign life insurance company.

179AG   Considering report before acting under section 179AF

Getting and considering report on fair value of shares or rights

             (1)  Before determining terms for an act under subsection 179AF(1), the Life Insurance Act statutory manager must:

                     (a)  obtain a report meeting the requirements in subsection (2) of this section on the fair value of the shares or rights concerned from an expert who is not an associate of the statutory manager, or of the company, under Division 2 of Part 1.2 of the Corporations Act 2001 ; and

                     (b)  consider the report;

unless APRA determines under subsection (8) that this subsection does not apply in relation to that act relating to those shares or rights.

Content of report

             (2)  The report must set out:

                     (a)  the amount that is, in the expert’s opinion, the fair value for each share or right concerned; and

                     (b)  the reasons for forming the opinion; and

                     (c)  any relationship between the expert and any of the following persons:

                              (i)  the Life Insurance Act statutory manager;

                             (ii)  a person who is an associate of the Life Insurance Act statutory manager under Division 2 of Part 1.2 of the Corporations Act 2001 ;

                            (iii)  the body corporate;

                            (iv)  a person who is an associate of the body corporate under Division 2 of Part 1.2 of the Corporations Act 2001 ;

                            including any circumstances in which the expert gives them advice, or acts on their behalf, in the proper performance of the functions attaching to the expert’s professional capacity or business relationship with them; and

                     (d)  any financial or other interest of the expert that could reasonably be regarded as being capable of affecting the expert’s ability to give an unbiased opinion in relation to the matter being reported on.

Determining fair value of shares

             (3)  In determining for the purposes of paragraph (2)(a) the amount that is, in the expert’s opinion, the fair value for each share concerned, the expert must:

                     (a)  first, assess the value of the company as a whole, in accordance with the assumptions (if any) notified to the expert by the Minister for the valuation of the company; and

                     (b)  then allocate that value among the classes of shares in the company that either have been issued or that the Life Insurance Act statutory manager proposes to issue (taking into account the relative financial risk, and voting and distribution rights, of the classes); and

                     (c)  then allocate the value of each class pro rata among the shares in that class that either have been issued or that the Life Insurance Act statutory manager proposes to issue (without allowing a premium or applying a discount for particular shares in that class).

Assumptions for valuation of company

             (4)  The Minister may give the expert written notice of assumptions for the valuation of the company. The Minister may, by further written notice given to the expert, revoke, but not vary, notice of the assumptions. A notice under this subsection is not a legislative instrument.

Determining fair value of rights

             (5)  In determining for the purposes of paragraph (2)(a) the amount that is, in the expert’s opinion, the fair value for each right concerned, the expert must act in accordance with the assumptions (if any) notified to the expert by the Minister for the valuation of the right.

Assumptions for valuation of rights

             (6)  The Minister may give the expert written notice of assumptions for the valuation of the rights concerned. The Minister may, by further written notice given to the expert, revoke, but not vary, notice of the assumptions. A notice under this subsection is not a legislative instrument.

Contravention does not invalidate act

             (7)  A contravention of subsection (1), (2), (3), (5) or (9) does not affect the validity of anything done under section 179AF.

Exemption from subsection (1)

             (8)  APRA may determine in writing that subsection (1) does not apply in relation to an act relating to shares or rights if APRA is satisfied that delaying the act to enable compliance with that subsection in relation to the act would detrimentally affect:

                     (a)  policy owners with:

                              (i)  if the company is a life company—the life company; or

                             (ii)  if the company is not a life company—the relevant life company mentioned in subsection 179AA(3); and

                     (b)  financial system stability in Australia.

             (9)  APRA must:

                     (a)  publish a copy of a determination under subsection (8) in the Gazette ; and

                     (b)  give a copy of a determination under subsection (8) to the Life Insurance Act statutory manager concerned (unless that manager is APRA).

           (10)  A determination made under subsection (8) is not a legislative instrument.

179AH   Act under section 179AF not ground for denying obligation

             (1)  This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

             (2)  None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

                     (a)  deny any obligation under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

             (3)  The matters are as follows:

                     (a)  a Life Insurance Act statutory manager of the body corporate doing an act under subsection 179AF(1) relating to the body corporate;

                     (b)  if the body corporate is a member of a relevant group of bodies corporate—a Life Insurance Act statutory manager of another member of the group doing an act under subsection 179AF(1) in relation that other member.

179AI   APRA may require a person to give information etc. for the purposes of this Division

APRA may require person to give information etc.

             (1)  APRA may require a person, by written notice given to the person, to give APRA information, or documents containing information, relating to the business of a body corporate that has a Life Insurance Act statutory manager if:

                     (a)  in a case where the Life Insurance Act statutory manager is APRA:

                              (i)  APRA believes, on reasonable grounds, that the person has such information or documents; and

                             (ii)  APRA requires the information or documents for the purposes of this Division; and

                     (b)  in a case where the Life Insurance Act statutory manager is not APRA:

                              (i)  the Life Insurance Act statutory manager requests, in writing, that APRA require the person to give the information or documents under this subsection; and

                             (ii)  APRA believes, on reasonable grounds, that the person has such information or documents; and

                            (iii)  APRA is satisfied that the Life Insurance Act statutory manager requires the information or documents for the purposes of this Division.

             (2)  The notice:

                     (a)  must specify a period within which the information or documents must be given to APRA; and

                     (b)  may specify the form and manner in which the information or documents must be given to APRA.

             (3)  The period specified under paragraph (2)(a) must be reasonable in all the circumstances.

Offence

             (4)  A person commits an offence if:

                     (a)  APRA requires the person to give APRA information or documents under subsection (1); and

                     (b)  the person refuses or fails to give the information or documents as required.

Penalty:  Imprisonment for 12 months or 50 penalty units, or both.

Self-incrimination

             (5)  A person is not excused from complying with a requirement under subsection (1) to give information or documents on the ground that doing so would tend to incriminate the individual or make the individual liable to a penalty.

             (6)  However, in the case of an individual:

                     (a)  the information or document given; and

                     (b)  giving the information or document; and

                     (c)  any information, document or thing obtained as a direct or indirect consequence of giving the information or document;

are not admissible in evidence against the individual in a criminal proceeding or a proceeding for the imposition of a penalty, other than a proceeding in respect of the falsity of the information or document.

Section 179AD not limited

             (7)  This section does not limit section 179AD.

179AJ   Administrator in control—additional powers to recommend action by APRA

Types of recommendation

             (1)  An administrator of a body corporate’s business may make any of the following recommendations to APRA, by instrument in writing given to APRA:

                     (a)  that APRA make a particular direction under subsection 179AM(3) or Subdivision B of Division 2 of Part 10A in respect of the body corporate;

                     (b)  that APRA apply for the body corporate to be wound up;

                     (c)  if the body corporate is a life company—that APRA revoke the life company’s registration under section 21;

                     (d)  if the body corporate is a registered NOHC—that APRA revoke the registered NOHC’s registration under section 28A.

Effect of recommendation

             (2)  If an administrator of a body corporate’s business makes a recommendation under this section, APRA must consider the recommendation but is not required to act on it.

179AK   Life Insurance Act statutory manager’s liabilities and duties

Immunity

             (1)  A Life Insurance Act statutory manager, or a person acting on behalf of a Life Insurance Act statutory manager, is not subject to any liability (whether civil or criminal) in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on the Life Insurance Act statutory manager by or under this Act.

             (2)  Subsection (1) does not apply to an act or omission in bad faith.

             (3)  To avoid doubt, a Life Insurance Act statutory manager is not liable under section 588G of the Corporations Act 2001 in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on the Life Insurance Act statutory manager by or under this Act. This subsection does not limit the scope of subsection (1).

Signpost to secrecy obligations

             (4)  Part 6 of the Australian Prudential Regulation Authority Act 1998 prohibits certain disclosures of information received by Life Insurance Act statutory managers under this Act.

179AL   Transaction by Life Insurance Act statutory manager not voidable under section 588FE of the Corporations Act 2001

                   A transaction of a body corporate is not voidable under section 588FE of the Corporations Act 2001 merely because:

                     (a)  the transaction was entered into at a time when a Life Insurance Act statutory manager was in control of the body corporate’s business; and

                     (b)  the transaction is:

                              (i)  an uncommercial transaction (within the meaning of that Act) of the body corporate; or

                             (ii)  an unfair preference (within the meaning of that Act) given by the body corporate to a creditor of the company; or

                            (iii)  an insolvent transaction (within the meaning of that Act) of the body corporate.

179AM   Administrator in control—additional duties

Duty to report to APRA on request

             (1)  A person who is an administrator of a body corporate’s business must give to APRA a written report showing how the control of the body corporate’s business is being carried out if APRA requests that such a report be provided to it. The report must be given to APRA within a reasonable time after the request.

Duty to report to APRA on termination of appointment

             (2)  A person who was an administrator of a body corporate’s business must give to APRA a written report showing how the control of the body corporate’s business was carried out over the period of the administrator’s appointment if the administrator’s appointment has been terminated. The report must be given to APRA within a reasonable time of the termination.

Duty to follow directions by APRA

             (3)  APRA may give an administrator of a body corporate’s business a direction relating to the control of the body corporate’s business, and may alter such a direction. If a direction (including an altered direction) is given to an administrator by APRA, the administrator must:

                     (a)  act in accordance with the direction; or

                     (b)  immediately provide to APRA information relating to the control of the body corporate’s business and request APRA to alter the direction.

             (4)  If an administrator of a body corporate’s business requests APRA to alter a direction and APRA considers the request then confirms the direction, the administrator must act in accordance with the direction.

179AN   Administrator in control—additional duties where action may affect financial system stability in Australia

             (1)  If an administrator of a body corporate’s business has reasonable cause to believe that an action that the administrator proposes to take is an action that is likely to have a detrimental effect on financial system stability in Australia, the administrator must:

                     (a)  notify APRA as soon as practicable; and

                     (b)  obtain APRA’s written consent before taking the action.

             (2)  The administrator is not required to comply with subsection (1) if the administrator is satisfied that it is not reasonably practicable to do so, having regard to urgency or other similar constraint.

             (3)  The performance of a function or the exercise of a power by an administrator is not invalid merely because of a failure by the administrator to comply with this section.

179AO   Termination of Life Insurance Act statutory manager’s appointment

             (1)  APRA may terminate the appointment of an administrator of a body corporate’s business and either appoint another person as administrator of the body corporate’s business or itself take control of the body corporate’s business if:

                     (a)  the administrator contravenes a requirement of this Division; or

                     (b)  APRA considers such action necessary to:

                              (i)  facilitate the resolution of the body corporate, a relevant group of bodies corporate of which the body corporate is a member, or another member of such a group; or

                             (ii)  if the body corporate is a life company—protect the interests of policy owners of the life company; or

                            (iii)  promote financial system stability in Australia.

             (2)  If:

                     (a)  APRA is the statutory manager of a body corporate; and

                     (b)  the requirement in paragraph (1)(b) is satisfied;

it may cease to be the statutory manager of the body corporate and appoint a person as administrator of the body corporate’s business.

             (3)  This section has effect subject to section 179AC.

179AP   Effect on directors of Life Insurance Act statutory manager taking control of a body corporate’s business

             (1)  The directors of a body corporate cease to hold office when a Life Insurance Act statutory manager takes control of the body corporate’s business.

Note:          For the definition of director , see subsection (4).

             (2)  A director of a body corporate must not be appointed or elected while a Life Insurance Act statutory manager is in control of the body corporate’s business unless the appointment is made under subsection 179AC(2).

             (3)  The appointment of a person as a member of the Compliance Committee of an eligible foreign life insurance company under section 16ZF ceases to have effect when a Life Insurance Act statutory manager takes control of the eligible foreign life insurance company’s business.

             (4)  A person must not be appointed as a member of the Compliance Committee of an eligible foreign life insurance company under section 16ZF while a Life Insurance Act statutory manager is in control of the eligible foreign life insurance company’s business unless the appointment is made under subsection 179AC(2).

             (5)  If a person who ceased to hold office as a director of a body corporate under subsection (1), or a purported director of a body corporate appointed or elected in contravention of subsection (2), purports to act in relation to the body corporate’s business while a Life Insurance Act statutory manager has control of the body corporate’s business, those acts are invalid and of no effect.

             (6)  If a person whose appointment as a member of the Compliance Committee of a body corporate under section 16ZF ceased to have effect under subsection (3) purports to act in relation to the body corporate’s business while a Life Insurance Act statutory manager has control of the body corporate’s business, those acts are invalid and of no effect.

             (7)  Subsections (1), (2) and (5) do not apply in relation to a body corporate that is an eligible foreign life insurance company.

             (8)  Subsection (9) applies if:

                     (a)  subsections (1), (2) and (5) do not apply in relation to a body corporate because of subsection (7); and

                     (b)  a Life Insurance Act statutory manager takes control of the body corporate’s business; and

                     (c)  a director of the body corporate acts, or purports to act in relation to the body corporate’s business while the Life Insurance Act statutory manager has control of the body corporate’s business.

             (9)  Those acts are invalid and of no effect to the extent that they relate to:

                     (a)  the Australian business assets and liabilities of the body corporate; or

                     (b)  the management of the body corporate, to the extent that the management relates to the Australian business assets and liabilities of the body corporate.

           (10)  For the purposes of this section, director has the same meaning as it has in the Corporations Act 2001 .

179AQ   Effect on external administrator of Life Insurance Act statutory manager taking control of a body corporate’s business

             (1)  The appointment of an external administrator of a body corporate is terminated when a Life Insurance Act statutory manager takes control of the body corporate’s business.

Note:          For the definition of external administrator , see the Schedule.

             (2)  An external administrator of a body corporate must not be appointed while a Life Insurance Act statutory manager is in control of the body corporate’s business unless APRA approves the appointment.

             (3)  If a person who ceased to be the external administrator of a body corporate under subsection (1), or a purported external administrator of the body corporate appointed in contravention of subsection (2), purports to act in relation to the body corporate’s business while a Life Insurance Act statutory manager has control of the body corporate’s business, those acts are invalid and of no effect.

             (4)  APRA must inform the external administrator of a body corporate that a Life Insurance Act statutory manager will take control of the body corporate’s business as soon as possible after the decision that a Life Insurance Act statutory manager will take control of the body corporate’s business is made. However, failure to inform the external administrator does not affect the operation of this section.

179AR   Moratorium—effect of Life Insurance Act statutory management on court and tribunal proceedings

             (1)  A person cannot begin or continue a proceeding in a court or tribunal covered by subsection (8) in respect of a body corporate if a Life Insurance Act statutory manager is in control of the body corporate’s business.

             (2)  Subsection (1) does not apply if:

                     (a)  the court or tribunal grants leave for the proceedings to be begun or continued on the ground that the person would be caused hardship if leave were not granted; and

                     (b)  the beginning or continuing of the proceedings is in accordance with such terms (if any) as the court or tribunal imposes.

             (3)  A person intending to apply for leave of the court or tribunal under paragraph (2)(a) must give APRA at least 10 days notice of the intention to apply (or a shorter period, if the court or tribunal considers that exceptional circumstances make this necessary).

             (4)  APRA may apply to the court or tribunal to be joined as a party to the proceedings for leave. If APRA is joined as a party, the court or tribunal must have regard to APRA’s views in deciding:

                     (a)  whether to grant leave under paragraph (2)(a); and

                     (b)  if the court or tribunal decides to grant the leave—whether to impose terms as mentioned in paragraph (2)(b); and

                     (c)  if the court or tribunal decides to impose such terms—the nature of those terms.

             (5)  Subsection (1) also does not apply if:

                     (a)  APRA consents in writing to the proceedings beginning or continuing; or

                     (b)  the Life Insurance Act statutory manager, after considering APRA’s views, consents to the proceedings beginning or continuing.

             (6)  APRA (or the Life Insurance Act statutory manager) cannot revoke a consent given for the purposes of subsection (5).

             (7)  Neither APRA nor the Life Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (5).

             (8)  A proceeding in a court or tribunal is covered by this subsection in respect of a body corporate if it is any of the following:

                     (a)  a proceeding against the body corporate (including a cross-claim or third party claim against the body corporate);

                     (b)  a proceeding in relation to property of the body corporate;

                     (c)  a proceeding to enforce any security (including a mortgage or charge) granted by the body corporate, or by a related body corporate of the body corporate, over any property that the body corporate owns, uses, possesses, occupies or in which the body corporate otherwise has an interest.

             (9)  Subsection (8) does not cover a proceeding in respect of an offence or a contravention of a provision of a law for which a pecuniary penalty (however described) may be imposed.

           (10)  In this section, a reference to a tribunal includes a reference to the following:

                     (a)  an industrial tribunal;

                     (b)  an arbitral tribunal.

179AS   Moratorium—effect of Life Insurance Act statutory management on enforcement process regarding property

             (1)  No enforcement process in relation to property of a body corporate can be begun or proceeded with if a Life Insurance Act statutory manager is in control of the body corporate’s business.

             (2)  Subsection (1) does not apply if:

                     (a)  the Court grants leave for the process to be begun or continued on the ground that the person would be caused hardship if leave were not granted; or

                     (b)  the beginning or continuing of the process is in accordance with such terms (if any) as the Court imposes.

             (3)  A person intending to apply for leave of the Court under paragraph (2)(a) must give APRA at least 10 days notice of the intention to apply (or a shorter period, if the Court considers that exceptional circumstances make this necessary).

             (4)  APRA may apply to the Court to be joined as a party to the proceedings for leave. If APRA is joined as a party, the Court must have regard to APRA’s views in deciding:

                     (a)  whether to grant leave under paragraph (2)(a); and

                     (b)  if the Court decides to grant the leave—whether to impose terms as mentioned in paragraph (2)(b); and

                     (c)  if the Court decides to impose such terms—the nature of those terms.

             (5)  Subsection (1) also does not apply if:

                     (a)  APRA consents to the process beginning or continuing; or

                     (b)  the Life Insurance Act statutory manager consents to the process beginning or continuing.

             (6)  APRA (or the Life Insurance Act statutory manager) cannot revoke a consent given for the purposes of subsection (5).

             (7)  Neither APRA nor the Life Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (5).

179AT   Moratorium—effect of Life Insurance Act statutory management on disposal of property

             (1)  A person must not dispose of property if:

                     (a)  the property is owned by another person; and

                     (b)  the other person is a body corporate; and

                     (c)  a Life Insurance Act statutory manager is in control of the body corporate’s business.

Note:          The Court may grant an injunction under section 235 in respect of a contravention of this subsection.

             (2)  Subsection (1) does not apply if:

                     (a)  APRA consents to the disposal; or

                     (b)  the Life Insurance Act statutory manager consents to the disposal.

             (3)  Neither APRA nor the Life Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (2).

179AU   Moratorium—Restrictions on exercise of third party property rights

             (1)  Section 440B of the Corporations Act 2001 applies during a period in which a Life Insurance Act statutory manager is in control of a body corporate’s business in the same way it applies during the administration of a company.

             (2)  For the purposes of this section, treat the reference in paragraph 440B(2)(a) of the Corporations Act 2001 to the administrator’s written consent as being a reference to:

                     (a)  the Life Insurance Act statutory manager’s written consent; or

                     (b)  APRA’s written consent.

             (3)  Neither APRA nor a Life Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent as mentioned in subsection (2).

             (4)  This section applies despite sections 179AR, 179AS and 179AT.

179AV   Moratorium—effect of Life Insurance Act statutory management on supply of essential services

             (1)  If:

                     (a)  a Life Insurance Act statutory manager is in control of a body corporate’s business; and

                     (b)  the Life Insurance Act statutory manager requests, or authorises someone else to request, a person or authority (the supplier ) to supply an essential service to the body corporate in Australia; and

                     (c)  the body corporate owes an amount to the supplier in respect of the supply of the essential service before the day on which the Life Insurance Act statutory manager took control of the body corporate’s business;

the supplier must not:

                     (d)  refuse to comply with the request for the reason only that the amount is owing; or

                     (e)  make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid.

Note:          The Court may grant an injunction under section 235 in respect of a contravention of this subsection.

             (2)  In this section:

essential service has the same meaning as in section 600F of the Corporations Act 2001.

179AW   Moratorium—effect of Life Insurance Act statutory management on annual general meeting

             (1)  This section applies to a body corporate that is required under section 250N or section 601BR of the Corporations Act 2001 to hold an annual general meeting within a particular period.

             (2)  Despite section 250N and section 601BRof that Act, if a Life Insurance Act statutory manager is in control of the body corporate’s business at the end of that period, the body corporate need not hold that annual general meeting.

179AX   Life Insurance Act statutory manager being in control not grounds for denial of obligations

             (1)  This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

             (2)  None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

                     (a)  deny any obligation under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

             (3)  The matters are as follows:

                     (a)  a Life Insurance Act statutory manager being in control, or being appointed to take control, of the business of the body corporate;

                     (b)  if the body corporate is a member of a relevant group of bodies corporate—a Life Insurance Act statutory manager being in control, or being appointed to take control, of the business of another member of the group.

179AY   Application of other provisions

             (1)  None of the matters mentioned in subsection (2) affect:

                     (a)  the continued operation of other provisions of this Act or the operation of the Financial Sector (Collection of Data) Act 2001 in relation to a body corporate; or

                     (b)  the obligation of a body corporate to comply with those other provisions and that Act.

             (2)  The matters are as follows:

                     (a)  the appointment of a Life Insurance Act statutory manager of the body corporate’s business under this Division;

                     (b)  the fact that a Life Insurance Act statutory manager is in control of the body corporate’s business.

             (3)  The Public Governance, Performance and Accountability Act 2013 does not apply to a body corporate that has a Life Insurance Act statutory manager.

179AZ   Costs of statutory management

             (1)  APRA’s costs (including costs in the nature of remuneration and expenses) of being in control of a body corporate’s business, or of having an administrator in control of a body corporate’s business, are payable from the body corporate’s funds and are a debt due to APRA.

             (2)  Despite anything contained in any law relating to the winding-up of companies, debts due to APRA by a body corporate under subsection (1) have priority in a winding-up of the body corporate over all other unsecured debts.

             (3)  If the body corporate is a life company, subsection (2) does not apply the extent that a debt due to APRA by the life company is referable to the business of a statutory fund of the life company.

Note:          APRA may be able to recover a debt that is referable to the business of a statutory fund of the life company that is being wound up, in accordance with paragraph 187(3)(c).

179AZA   APRA must report to Treasurer and publish information about statutory management

Reports to the Treasurer

             (1)  If the Treasurer requests APRA to give him or her a written report concerning the activities of Life Insurance Act statutory managers in respect of specified body corporates or in respect of a specified period, APRA must give the Treasurer such a written report within a reasonable time after the Treasurer requests it.

             (2)  If a Life Insurance Act statutory manager takes control of a body corporate’s business during a financial year, or if there is an ultimate termination of control during a financial year, APRA must give the Treasurer a written report within a reasonable time after the end of the financial year concerning activities of all Life Insurance Act statutory managers and each ultimate termination of control that occurred during that financial year.

Requirement to publish notices in Gazette

             (3)  If APRA:

                     (a)  takes control of a body corporate’s business; or

                     (b)  appoints an administrator of a body corporate’s business; or

                     (c)  makes an ultimate termination of control in respect of a body corporate’s business;

APRA must publish notice of that fact in the Gazette . However, mere failure to publish such a notice does not affect the validity of the act.

179AZB   Exceptions to Part IV of the Competition and Consumer Act 2010

                   For the purposes of subsection 51(1) of the Competition and Consumer Act 2010 , the following things are specified and specifically authorised:

                     (a)  the acquisition of assets in:

                              (i)  a sale or disposal of the whole or part of the business of a body corporate under this Division by a Life Insurance Act statutory manager in control of the body corporate’s business; or

                             (ii)  a transfer of life insurance business of a life company under a scheme prepared by a Life Insurance Act statutory manager in control of the life company’s business and confirmed (with or without modifications) by the Court under Part 9;

                            (whether the assets are shares in another body corporate or other assets);

                     (b)  the acquisition of shares in a body corporate as a direct result of:

                              (i)  the issue or sale of the shares under this Division by a Life Insurance Act statutory manager in control of the body corporate’s business; or

                             (ii)  the exercise of a right to acquire shares that was issued or sold under this Division by a Life Insurance Act statutory manager in control of the body corporate’s business.

53  Section 179C

Repeal the section, substitute:

179C   Involving APRA in proposed appointment of external administrators of life companies and NOHCs

             (1)  At least one week before a person other than APRA:

                     (a)  makes an application to a court under Chapter 5 of the Corporations Act 2001 for the appointment of an external administrator of a life company or of a registered NOHC of a life company; or

                     (b)  makes another kind of application (whether or not to a court) for the appointment of an external administrator of a life company or of a registered NOHC of a life company; or

                     (c)  appoints an external administrator of a life company or of a registered NOHC of a life company (otherwise than as the result of an application made by another person);

the person must give APRA written notice that the person proposes to make the application or appointment.

             (2)  If there is an approved form for the notice, the person must give the notice in the approved form.

             (3)  Subsection (1) does not apply if APRA gives the person written notice, before the person makes the application or appointment, that APRA consents to the person making the application or appointment.

             (4)  APRA is entitled to be heard on the application.

             (5)  After receiving the notice, APRA may request the person to provide details of the proposed application.

Offence

             (6)  A person (other than APRA) commits an offence if:

                     (a)  the person:

                              (i)  makes an application to a court under Chapter 5 of the Corporations Act 2001 for the appointment of an external administrator of a life company or of a registered NOHC of a life company; or

                             (ii)  makes another kind of application (whether or not to a court) for the appointment of an external administrator of a life company or of a registered NOHC of a life company; or

                            (iii)  appoints an external administrator of a life company or of a registered NOHC of a life company (otherwise than as the result of an application made by another person); and

                     (b)  APRA did not give the person written notice, before the person made the application or appointment, of APRA’s consent to the person making the application or appointment, in accordance with subsection (3); and

                     (c)  at least one week before making the application or appointment:

                              (i)  if there is an approved form for the purposes of this paragraph—the person did not give APRA notice in the approved form indicating that the person proposed to make the application or appointment; or

                             (ii)  otherwise—the person did not give APRA written notice indicating that the person proposed to make the application or appointment.

Penalty:  60 penalty units.

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

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

54  Subsection 181(2)

Repeal the subsection, substitute:

             (2)  APRA may only make an application if any of the following requirements are met:

                     (a)  APRA is satisfied that it is necessary or proper that the application be made, having regard to the conclusions reached by APRA as a result of any of the following situations:

                              (i)  APRA investigating the business of the life company under Division 3 of Part 7;

                             (ii)  APRA taking control of the life company’s business under subsection 179AA(1);

                            (iii)  an administrator of the life company’s business recommending to APRA under section 179AJ that APRA apply for the life company to be wound up;

                     (b)  if the life company is an eligible foreign life insurance company—APRA considers that any of the following requirements are met:

                              (i)  an application for the appointment of an external administrator of the eligible foreign life insurance company, or for a similar procedure in respect of the eligible foreign life insurance company, has been made in one or more foreign countries;

                             (ii)  an external administrator has been appointed to the eligible foreign life insurance company, or a similar appointment has been made in respect of the eligible foreign life insurance company, in a foreign country.

55  At the end of section 181

Add:

             (4)  To avoid doubt, subsection (1) applies whether or not a Life Insurance Act statutory manager is in control of:

                     (a)  unless paragraph (b) applies—the life company’s business; or

                     (b)  if the life company is an eligible foreign life insurance company—the Australian business assets and liabilities of the eligible foreign life insurance company.

56  Subsection 183(1)

Omit “a life company”, substitute “an entity covered by subsection (4), or the proposed winding-up of an entity covered by subsection (4)”.

57  At the end of section 183

Add:

             (4)  This subsection covers the following entities:

                     (a)  a life company;

                     (b)  a registered NOHC;

                     (c)  a subsidiary of a life company or registered NOHC.

58  Paragraph 183B(2)(a)

After “the winding up of the friendly society”, insert “, or the proposed winding up of the friendly society”.

59  Subsection 184(1)

Repeal the subsection, substitute:

             (1)  APRA may apply to the Court for directions regarding any matter arising under:

                     (a)  the winding-up of an entity covered by subsection 183(4); or

                     (b)  the proposed winding-up of an entity covered by subsection 183(4).

60  Subsection 185(1)

Repeal the subsection, substitute:

             (1)  APRA may ask a liquidator for specified information in writing about:

                     (a)  the winding-up of an entity covered by subsection 183(4) and the other affairs of the entity; or

                     (b)  the proposed winding-up of an entity covered by subsection 183(4) and the other affairs of the entity.

61  Subsection 190(5)

Omit “ Financial Sector (Business Transfer and Group Restructure) Act 1999 ”, substitute “ Financial Sector (Transfer and Restructure) Act 1999 ”.

62  After paragraph 230A(3A)(d)

Insert:

                 or (e)  each subsidiary of a life company or of a registered NOHC; or

                      (f)  each subsidiary of a life company or of a registered NOHC, included in a specified class of subsidiaries;

63  At the end of Division 1 of Part 10A

Add:

230AAA   Obligation to comply with the prudential standards

                   A life company, registered NOHC or a subsidiary of a life company or registered NOHC to which a prudential standard applies must comply with the standard.

64  After Division 1 of Part 10A

Insert:

Division 1A Conversion and write-off provisions

230AAB   Definitions

                   In this Division:

clearing and settlement facility has the meaning given by Division 6 of Part 7.1 of the Corporations Act 2001 .

conversion and write-off provisions means the provisions of the prudential standards that relate to the conversion or writing off of:

                     (a)  Additional Tier 1 and Tier 2 capital; or

                     (b)  any other instrument.

conversion entity : an entity (the first entity ) is a conversion entity for an instrument if:

                     (a)  the instrument is issued by another entity, or another entity is a party to the instrument; and

                     (b)  the instrument converts, in accordance with the terms of the instrument, into one or more ordinary shares of the first entity.

converts : an instrument converts into one or more ordinary shares of an entity including by redeeming or cancelling the instrument or rights under the instrument, and replacing the instrument or rights with ordinary shares.

operating rules has the meaning given by section 761A of the Corporations Act 2001 .

related subsidiary of a life company means a subsidiary of a holding company of the life company.

specified law means any of the following:

                     (a)  the Financial Sector (Shareholdings) Act 1998 ;

                     (b)  the Foreign Acquisitions and Takeovers Act 1975 ;

                     (c)  Chapter 6 of the Corporations Act 2001 (takeovers);

                     (d)  any other Australian law, or law of a foreign country or part of a foreign country, prescribed by the regulations for the purposes of this paragraph.

230AAC   Conversion and write-off provisions

Application

             (1)  This section applies in relation to an instrument that contains terms that are for the purposes of the conversion and write-off provisions and is issued by, or to which any of the following is a party:

                     (a)  a life company;

                     (b)  a holding company of a life company;

                     (c)  a subsidiary or related subsidiary of a life company;

                     (d)  an entity of a kind prescribed by the regulations for the purposes of this paragraph.

Conversion of instrument despite other laws etc.

             (2)  The instrument may be converted in accordance with the terms of the instrument despite:

                     (a)  any Australian law or any law of a foreign country or a part of a foreign country, other than a specified law; and

                     (b)  the constitution of any of the following entities (the relevant entity ):

                              (i)  the entity issuing the instrument;

                             (ii)  any entity that is a party to the instrument;

                            (iii)  any conversion entity for the instrument; and

                     (c)  any contract or arrangement to which a relevant entity is a party; and

                     (d)  any listing rules or operating rules of a financial market in whose official list a relevant entity is included; and

                     (e)  any operating rules of a clearing and settlement facility through which the instrument is traded.

Write-off of instrument despite other laws etc.

             (3)  The instrument may be written off in accordance with the terms of the instrument despite:

                     (a)  any Australian law or any law of a foreign country or a part of a foreign country; and

                     (b)  the constitution of either of the following entities (the relevant entity ):

                              (i)  the entity issuing the instrument;

                             (ii)  any entity that is a party to the instrument; and

                     (c)  any contract or arrangement to which a relevant entity is a party; and

                     (d)  any listing rules or operating rules of a financial market in whose official list a relevant entity is included; and

                     (e)  any operating rules of a clearing and settlement facility through which the instrument is traded.

230AAD   Conversion or write-off etc. not grounds for denial of obligations

             (1)  This section applies if an entity (the first entity ) is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

             (2)  None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the first entity), to do any of the following:

                     (a)  deny any obligation under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

             (3)  The matters are as follows:

                     (a)  a relevant instrument being converted in accordance with the terms of the instrument;

                     (b)  a relevant instrument being written off in accordance with the terms of the instrument;

                     (c)  the making of a determination (however described) by APRA that results in a relevant instrument being required to be converted or written off in accordance with the terms of the instrument.

             (4)  In this section:

relevant instrument means:

                     (a)  an instrument to which section 230AAC applies:

                              (i)  that is issued by the first entity; or

                             (ii)  to which the first entity is a party; or

                            (iii)  for which the first entity is a conversion entity; or

                     (b)  if the first entity is a body corporate that is a member of a relevant group of bodies corporate—an instrument to which section 230AAC applies:

                              (i)  that is issued by another member of the group; or

                             (ii)  to which another member of the group is a party; or

                            (iii)  for which another member of the group is a conversion entity.

65  Section 230AA

Before “This Subdivision”, insert “(1)”.

66  At the end of section 230AA

Add:

             (2)  Subsections (3) and (4) apply if:

                     (a)  APRA has given a recapitalisation direction to the life company under subsection 230AB(1) (the primary recapitalisation direction ); and

                     (b)  the life company is a subsidiary of a NOHC/NOHC subsidiary; and

                     (c)  the NOHC/NOHC subsidiary is a company that:

                              (i)  is registered under the Corporations Act 2001 ; and

                             (ii)  has a share capital; and

                     (d)  the NOHC/NOHC subsidiary does not have a Life Insurance Act statutory manager.

             (3)  This Subdivision applies to the NOHC/NOHC subsidiary in the same way that it does to a life company.

             (4)  However, disregard the following provisions in applying this Subdivision to the NOHC/NOHC subsidiary:

                     (a)  subsection 230AB(1);

                     (b)  subsection 230AC(1).

             (5)  In this section:

NOHC/NOHC subsidiary means a body corporate that is any of the following:

                     (a)  a registered NOHC;

                     (b)  a subsidiary of a registered NOHC.

67  Paragraph 230AB(1)(b)

After “APRA considers that”, insert “, in the absence of external support”.

68  After subsection 230AB(1)

Insert:

          (1A)  Subsection (1B) applies if subsections 230AA(3) and (4) apply to a NOHC/NOHC subsidiary because of a primary recapitalisation direction given to a life company (as mentioned in subsection 230AA(2)).

          (1B)  For the purposes of facilitating compliance with the primary recapitalisation direction, APRA may give the NOHC/NOHC subsidiary a direction (also a recapitalisation direction ) that requires the NOHC/NOHC subsidiary to do anything that is specified in the direction.

69  After subsection 230AB(2)

Insert:

          (2A)  The regulations may specify that a particular form of support is not external support for the purposes of paragraph (1)(b).

70  At the end of section 230AB

Add:

             (4)  A recapitalisation direction may deal with the time by which, or period during which, it is to be complied with.

             (5)  APRA may, by notice in writing to the life company, vary the recapitalisation direction if, at the time of the variation, it considers that the variation is necessary and appropriate.

             (6)  The direction has effect until APRA revokes it by notice in writing to the life company. APRA may revoke the direction if, at the time of revocation, it considers that the direction is no longer necessary or appropriate.

71  After subsection 230AC(1)

Insert:

          (1A)  If the recapitalisation direction is a direction to a NOHC/NOHC subsidiary under subsection 230AB(1B), the direction may direct the NOHC/NOHC subsidiary to do any of the following:

                     (a)  issue:

                              (i)  shares, or rights to acquire shares, in the NOHC/NOHC subsidiary; or

                             (ii)  other capital instruments in the NOHC/NOHC subsidiary of a kind specified in the direction;

                     (b)  acquire:

                              (i)  shares, or rights to acquire shares, in the life company mentioned in subsection 230AB(1A); or

                             (ii)  other capital instruments in the life company mentioned in subsection 230AB(1A) of a kind specified in the direction;

                     (c)  acquire:

                              (i)  shares, or rights to acquire shares, in a specified body corporate covered by subsection (1B); or

                             (ii)  other capital instruments in a specified body corporate covered by subsection (1B), of a kind specified in the direction.

          (1B)  This subsection covers a body corporate if:

                     (a)  the body corporate is a subsidiary of the NOHC/NOHC subsidiary; and

                     (b)  the life company is a subsidiary of the body corporate.

          (1C)  Without limiting the generality of subsections (1), (1A) and (2), but subject to subsection (3), a direction referred to in those subsections may:

                     (a)  deal with some only of the matters referred to in those subsections; or

                     (b)  deal with a particular class or particular classes of those matters; or

                     (c)  make different provision with respect to different matters or different classes of matters.

72  Subsection 230AC(2)

Omit “paragraph (1)(a)”, substitute “paragraph (1)(a) or subparagraph (1A)(a)(i), (1A)(b)(i) or (1A)(c)(i)”.

73  Subsection 230AC(3)

Omit “paragraph (1)(b)”, substitute “paragraph (1)(b) or subparagraph (1A)(a)(ii), (1A)(b)(ii) or (1A)(c)(ii)”.

74  Subsection 230AD(3) (heading)

Repeal the heading, substitute:

Issue or acquisition of shares etc. despite other laws etc.

75  Subsection 230AD(3)

After “issue”, insert “or acquire”.

76  Paragraph 230AD(3)(a)

After “the Corporations Act 2001 ”, insert “(without limiting the scope of section 251AA of this Act)”.

77  Paragraph 230AD(3)(d)

Omit “(as defined in section 761A of the Corporations Act 2001 ) of a financial market (as defined in that section)”, substitute “of a financial market”.

78  After subsection 230AE(1)

Insert:

          (1A)  If the recapitalisation direction is a direction to a NOHC/NOHC subsidiary under subsection 230AB(1B), treat the reference in paragraph (1)(a) to “the policy owners of the company” as being a reference to “the policy owners of the life company mentioned in subsection 230AB(1A)”.

79  At the end of section 230AE

Add:

             (4)  If the recapitalisation direction is a direction to a NOHC/NOHC subsidiary under subsection 230AB(1B), treat the references in paragraph (3)(c) to “the company” as being a reference to “the NOHC/NOHC subsidiary mentioned in subsection 230AB(1B)”.

80  Section 230AJ

Repeal the section, substitute:

230AJ   Recapitalisation direction not grounds for denial of obligations

             (1)  This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

             (2)  None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

                     (a)  deny any obligations under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

             (3)  The matters are as follows:

                     (a)  the body corporate being subject to a recapitalisation direction;

                     (b)  if the body corporate is a member of a relevant group of bodies corporate—another member of the group being subject to a recapitalisation direction.

81  Subsection 230AK(9)

Repeal the subsection.

82  Subsection 230B(1)

Omit “Without limiting subsection (1AA), APRA may”, substitute “APRA may”.

83  Paragraph 230B(1)(b)

Omit “and such a contravention is likely to give rise to a prudential risk”, substitute “and the direction is reasonably necessary for one or more prudential matters relating to the body corporate”.

84  Subsection 230B(1AA)

Repeal the subsection, substitute:

       (1AA)  APRA may give a body corporate that is a life company or is a registered NOHC a direction of a kind specified in subsection (2) if APRA has reason to believe that:

                     (a)  a subsidiary of the body corporate has contravened a provision of this Act or the Financial Sector (Collection of Data) Act 2001 ; or

                     (b)  a subsidiary of the body corporate is likely to contravene this Act or the Financial Sector (Collection of Data) Act 2001 ; or

                     (c)  the direction is in respect of a subsidiary of the body corporate and is necessary in the interests of:

                              (i)  if the body corporate is a life company—policy owners or prospective policy owners of the life company; or

                             (ii)  if the body corporate is a registered NOHC—policy owners or prospective policy owners of any life company that is a subsidiary of the NOHC; or

                     (d)  a subsidiary of the body corporate is, or is about to become, unable to meet the subsidiary’s liabilities; or

                     (e)  there is, or there might be, a material risk to the security of the assets of a subsidiary of the body corporate; or

                      (f)  there has been, or there might be, a material deterioration in the financial condition of a subsidiary of the body corporate; or

                     (g)  a subsidiary of the body corporate is conducting the subsidiary’s affairs in an improper or financially unsound way; or

                     (h)  a subsidiary of the body corporate is conducting the subsidiary’s affairs in a way that may cause or promote instability in the Australian financial system; or

                      (j)  a subsidiary of the body corporate is conducting the subsidiary’s affairs in a way that may cause it to be unable to continue to supply services to:

                              (i)  if the body corporate is a life company—the life company; or

                             (ii)  if the body corporate is a registered NOHC—any life company that is a subsidiary of the NOHC; or

                     (k)  the direction is in respect of a subsidiary of the body corporate and the failure to issue a direction would materially prejudice the interests of:

                              (i)  if the body corporate is a life company—policy owners or prospective policy owners of the life company; or

                             (ii)  if the body corporate is a registered NOHC—policy owners or prospective policy owners of any life company that is a subsidiary of the NOHC.

       (1AB)  However, APRA can only make a direction as a result of a ground referred to in paragraph (1AA)(a), (b), (d), (e), (f), (g) or (j) if APRA considers that the direction is reasonably necessary for one or more prudential matters relating to the body corporate.

       (1AC)  APRA may give a body corporate that is a subsidiary of a life company or of a registered NOHC a direction of a kind specified in subsection (3) if:

                     (a)  APRA has given the life company or registered NOHC a direction under subsection (1AA) because one or more of the grounds referred to in that subsection have been satisfied in respect of the subsidiary; or

                     (b)  APRA may give the life company or registered NOHC a direction under subsection (1AA) because one or more of the grounds referred to in that subsection have been satisfied in respect of the subsidiary.

       (1AD)  APRA cannot give a direction under subsection (1AC) to a body corporate of a kind specified in regulations (if any) made for the purposes of this subsection.

        (1AE)  Subsections (1), (1AA) and (1AC) do not limit each other.

85  Paragraph 230B(1A)(b)

Repeal the paragraph, substitute:

                     (b)  specify:

                              (i)  in the case of a direction under subsection (1AC)—the ground referred to in subsection (1AA) as a result of which the direction is given; or

                             (ii)  otherwise—the ground referred to in subsection (1) or (1AA) as a result of which the direction is given.

86  After subsection 230B(1A)

Insert:

          (1B)  In deciding whether to give a direction under subsection (1), (1AA) or (1AC) to a body corporate, APRA may disregard any external support for the body corporate.

          (1C)  The regulations may specify that a particular form of support is not external support for the purposes of subsection (1B).

87  Paragraph 230B(2)(v)

Repeal the paragraph, substitute:

                     (v)  to make changes to the body corporate’s systems, business practices or operations;

                    (w)  to reconstruct, amalgamate or otherwise alter all or part of any of the following:

                              (i)  the business, structure or organisation of the body corporate;

                             (ii)  the business, structure or organisation of the group constituted by the body corporate and its subsidiaries;

                     (x)  to do, or to refrain from doing, anything else in relation to the affairs of the body corporate.

88  After subsection 230B(3)

Insert:

          (3A)  Without limiting the generality of paragraph (2)(x), a direction under that paragraph to an eligible foreign life insurance company may be any one or more of the following:

                     (a)  a direction that the company act in a way so as to ensure that:

                              (i)  a particular asset, or a particular class of assets, of the company is returned to the control (however described) of the part of the company’s life insurance business that is carried on in Australia; or

                             (ii)  a particular liability, or a particular class of liabilities, of the company ceases to be the responsibility (however described) of the part of the company’s life insurance business that is carried on in Australia;

                     (b)  a direction that the company not act in a way that has the result that:

                              (i)  a particular asset, or a particular class of assets, of the company ceases to be under the control (however described) of the part of the company’s life insurance business that is carried on in Australia; or

                             (ii)  a particular liability, or a particular class of liabilities, of the company becomes the responsibility (however described) of the part of the company’s life insurance business that is carried on in Australia.

          (3B)  The kinds of direction that may be given as mentioned in subsection (2) are not limited by any other provision in this Part.

          (3C)  The kinds of direction that may be given as mentioned in a particular paragraph of subsection (2) are not limited by any other paragraph of that subsection.

89  Subsections 230C(1) to (2)

Repeal the subsections, substitute:

             (1)  This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

                     (a)  Australian law (including the law of a State or Territory); or

                     (b)  law of a foreign country (including the law of part of a foreign country).

          (1A)  None of the matters mentioned in subsection (1B) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

                     (a)  deny any obligations under the contract;

                     (b)  accelerate any debt under the contract;

                     (c)  close out any transaction relating to the contract;

                     (d)  enforce any security under the contract.

This subsection has effect subject to subsections (2) and (3).

          (1B)  The matters are as follows:

                     (a)  the body corporate being subject to a direction by APRA under section 230B;

                     (b)  if the body corporate is a member of a relevant group of bodies corporate—another member of the group being subject to a direction by APRA under section 230B.

             (2)  If the body corporate is prevented from fulfilling its obligations under the contract because of a direction under section 230B, other than a direction under paragraph 230B(2)(o), the other party or parties to the contract are, subject to any orders made under subsection (3), relieved from obligations owed to the body corporate under the contract.

90  Subsection 230D(1)

Omit “life company or registered NOHC”, substitute “life company, registered NOHC or other body corporate”.

91  Paragraph 230D(3)(a)

Omit “a particular life company or registered NOHC”, substitute “a particular life company, registered NOHC or other body corporate”.

92  Paragraph 230D(3)(b)

Omit “any life companies or registered NOHCs”, substitute “any life companies, registered NOHCs or other bodies corporate”.

93  Subsection 230D(4)

Omit “any life company or registered NOHC”, substitute “any life company, registered NOHC or other body corporate”.

94  Section 230E

Repeal the section.

95  Subsection 230F(1)

Omit “A life company or registered NOHC”, substitute “A life company, registered NOHC or other body corporate”.

96  Subsection 230F(2)

Omit “a life company or registered NOHC”, substitute “a life company, registered NOHC or other body corporate”.

97  Subsection 230F(2)

Omit “company or NOHC” (wherever occurring), substitute “life company, NOHC or other body corporate”.

98  Subsection 230F(3)

Omit “a life company or registered NOHC”, substitute “a life company, registered NOHC or other body corporate”.

99  Subsection 230F(3)

Omit “company or NOHC” (wherever occurring), substitute “life company, NOHC or other body corporate”.

100  Subsection 230F(4)

Omit “a life company or registered NOHC”, substitute “a life company, registered NOHC or other body corporate”.

101  Subsection 230F(4)

Omit “company or NOHC”, substitute “life company, NOHC or other body corporate”.

102  At the end of Division 2 of Part 10A

Add:

Subdivision C Secrecy and disclosure provisions relating to all directions

231   APRA may determine that a direction is covered by secrecy provision

             (1)  This section applies if APRA has given an entity (the directed entity ) a direction under this Act.

             (2)  APRA may determine, in writing, that the direction is covered under this subsection if APRA considers that the determination is necessary to protect the policy owners of any life company or to promote financial system stability in Australia.

Note:          For repeal of a determination, see subsection 33(3) of the Acts Interpretation Act 1901 .

             (3)  APRA must give the directed entity a copy of the determination as soon as practicable after making it.

             (4)  An instrument under subsection (2) is not a legislative instrument.

             (5)  If APRA makes a determination under subsection (2), APRA must consider whether it is appropriate in the circumstances to also make a determination under either or both of subsections 231C(2) and 231C(5).

231A   Secrecy relating to directions

             (1)  A person commits an offence if:

                     (a)  APRA has given an entity (the directed entity ) a direction under this Act; and

                     (b)  the direction is covered by a determination under subsection 231(2); and

                     (c)  the person is, or has been, covered by subsection (2) of this section in relation to the direction; and

                     (d)  the person discloses information; and

                     (e)  the information reveals the fact that the direction was made.

Penalty:  Imprisonment for 2 years.

             (2)  A person is covered by this subsection in relation to the direction if the person is:

                     (a)  the directed entity; or

                     (b)  an officer, employee or contractor of the directed entity at a time on or after APRA gave the directed entity the direction; or

                     (c)  any other person who, because of his or her employment, or in the course of that employment, has acquired information that reveals the fact that the direction was made.

Exception

             (3)  Subsection (1) does not apply if:

                     (a)  the disclosure is authorised by section 231B, 231C, 231D, 231E, 231F or 231G; or

                     (b)  the disclosure is required by an order or direction of a court or tribunal.

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

231B   Disclosure of publicly available information

                   A person covered by subsection 231A(2) in relation to a direction may disclose information that reveals the fact that the direction was made, to the extent that the information has already been lawfully made available to the public.

231C   Disclosure allowed by APRA

             (1)  A person covered by subsection 231A(2) in relation to a direction may disclose information that reveals the fact that the direction was made if:

                     (a)  a determination under subsection (2) allows the disclosure by the person; and

                     (b)  if APRA has included conditions in the determination—those conditions are satisfied.

Determinations relating to specified person

             (2)  APRA may, in writing, make a determination allowing:

                     (a)  a specified person covered by subsection 231A(2) in relation to a specified direction; or

                     (b)  a specified person covered by subsection 231A(2) in relation to a direction that is in a specified class of directions;

to disclose specified information in relation to the direction.

             (3)  An instrument under subsection (2) is not a legislative instrument.

             (4)  APRA must give a copy of the determination as soon as practicable after making it to:

                     (a)  the directed entity; and

                     (b)  the person specified, or each person specified, in the determination.

Determinations relating to specified class of persons

             (5)  APRA may, by legislative instrument, make a determination allowing a specified class of persons covered by subsection 231A(2) in relation to a direction that is in a specified class of directions to disclose:

                     (a)  specified kinds of information in relation to the direction; or

                     (b)  any kind of information in relation to the direction.

Conditions in determinations

             (6)  APRA may include conditions in a determination under subsection (2) or (5) that relate to any of the following:

                     (a)  the kind of entities to which the disclosure may be made;

                     (b)  the way in which the disclosure is to be made;

                     (c)  any other matter that APRA considers appropriate.

231D   Disclosure to legal representative for purpose of seeking legal advice

                   A person covered by subsection 231A(2) in relation to a direction may disclose information that reveals the fact that the direction was made if:

                     (a)  the disclosure is to the person’s legal representative; and

                     (b)  the purpose of the person making the disclosure is for the legal representative to provide legal advice, or another legal service, in relation to the direction.

231E   Disclosure allowed by APRA Act secrecy provision

             (1)  A person covered by subsection 231A(2) in relation to a direction may disclose information that reveals the fact that the direction was made if:

                     (a)  the person is:

                              (i)  an APRA member (within the meaning of subsection 56(1) of the Australian Prudential Regulation Authority Act 1998 ); or

                             (ii)  an APRA staff member (within the meaning of that subsection); or

                            (iii)  a Commonwealth officer (within the meaning of the Crimes Act 1914 ) who is covered by paragraph (c) of the definition of officer in subsection 56(1) of the Australian Prudential Regulation Authority Act 1998 ; and

                     (b)  the information is protected information (within the meaning of subsection 56(1) of that Act), or is contained in a protected document (within the meaning of that subsection); and

                     (c)  the disclosure is in accordance with subsection 56(3), (4), (5), (5AA), (6), (6A), (7), (7A), (7B) or (7C) of that Act.

Relationship to APRA Act secrecy provision

             (2)  Disclosure of information in relation to a direction is not an offence under section 56 of the Australian Prudential Regulation Authority Act 1998 if the disclosure is authorised by section 231B, 231C, 231D, 231F or 231G.

231F   Disclosure in circumstances set out in the regulations

                   A person covered by subsection 231A(2) in relation to a direction may disclose information that reveals the fact that the direction was made, if the disclosure is made in circumstances (if any) set out in the regulations.

231G   Disclosure for purpose

                   A person covered by subsection 231A(2) (the relevant person ) in relation to a direction may disclose information that reveals the fact that the direction was made if:

                     (a)  another person covered by subsection 231A(2) in relation to the direction disclosed that information to the relevant person for a particular purpose in accordance with section 231C, 231D, 231E or 231F, or in accordance with a previous operation of this section; and

                     (b)  the disclosure by the relevant person is for the same purpose.

231H   Exceptions operate independently

                   Sections 231B, 231C, 231D, 231E, 231F and 231G do not limit each other.

103  Subsection 236(1) (definition of reviewable decision )

Omit “, subject to subsection (1AA),”.

104  Subsection 236(1) (paragraphs (g) and (ga) of the definition of reviewable decision )

Repeal the paragraphs, substitute:

                     (g)  a decision to revoke registration under subsection 26(1);

                    (ga)  a refusal to revoke the registration of a company under section 27;

                  (gaa)  a decision to give a direction under subsection 27A(1);

                  (gab)  a refusal to approve a proposed assignment under subsection 27A(4);

                  (gac)  a decision to impose conditions on an approval under subsection 27A(4);

105  Subsection 236(1) (after paragraph (ge) of the definition of reviewable decision )

Insert:

                    (gf)  a decision to give a notice under subsection 28AA(2);

106  Subsection 236(1) (at the end of the definition of reviewable decision )

Add:

                  ; (zr)  a decision to give a direction under subsection 230B(1AA) as a result of the ground referred to in paragraph 230B(1AA)(a), (b) or (c);

                    (zs)  a decision to give a direction under subsection 230B(1AC) as a result of the ground referred to in paragraph 230B(1AC)(a) or (b), to the extent that the paragraph relates to a ground referred to in paragraph 230B(1AA)(a), (b) or (c).

107  After section 246

Insert:

246A   Protection from liability—general

             (1)  A person is not subject to any liability to any person in respect of anything done, or omitted to be done, in good faith and without negligence in the exercise or performance, or the purported exercise or performance, of powers, functions or duties under this Act.

             (2)  To avoid doubt, any information provided by a person to APRA under section 88A or 98A is taken, for the purposes of subsection (1), to be provided in the exercise of a power or the performance of a function under this Act.

             (3)  Subsection (1) does not apply to a person referred to in section 58 of the Australian Prudential Regulation Authority Act 1998 and, to avoid doubt, does not affect the operation of that section.

246B   Protection from liability—directions and secrecy

             (1)  An action, suit or proceeding (whether criminal or civil) does not lie against a person in relation to anything done, or omitted to be done, in good faith by the person if:

                     (a)  the person does the thing, or omits to do the thing, for the purpose of any of the following:

                              (i)  complying with a direction under this Act given by APRA to a body corporate;

                             (ii)  complying with section 231A (secrecy) in relation to a direction under this Act given by APRA to a body corporate; and

                     (b)  it is reasonable for the person to do the thing, or to omit to do the thing, in order to achieve that purpose; and

                     (c)  the person is any of the following:

                              (i)  an officer or senior manager of the body corporate, or of a member of a relevant group of bodies corporate of which the body corporate is also a member;

                             (ii)  an employee or agent of the body corporate, or of a member of a relevant group of bodies corporate of which the body corporate is also a member;

                            (iii)  the body corporate or a member of a relevant group of bodies corporate of which the body corporate is also a member.

             (2)  For the purposes of paragraph (1)(b), treat it as reasonable for a person to do a thing, or to omit to do a thing, in order to achieve a purpose unless no reasonable person in that person’s position would do the thing, or omit to do the thing, in order to achieve that purpose.

             (3)  In this section:

employee of a body corporate includes a person engaged to provide advice or services to the body corporate.

officer has the meaning given by section 9 of the Corporations Act 2001 .

246C   Protection from liability—provisions do not limit each other

                   The following provisions do not limit the operation of each other:

                     (a)  section 179AK;

                     (b)  subsection 50(2);

                     (c)  section 89;

                     (d)  section 99;

                     (e)  section 156A;

                      (f)  section 156B;

                     (g)  section 179;

                     (h)  section 246A;

                      (i)  section 246B;

                      (j)  section 247;

                     (k)  section 58 of the Australian Prudential Regulation Authority Act 1998 .

108  After section 251

Insert:

251AA   Act has effect despite the Corporations Act

                   This Act has effect despite any provision of the Corporations Act 2001 .

109  Subsection 254(5)

Omit “paragraph (1)(a)”, substitute “paragraph (1)(g)”.

110  Schedule

Insert:

administrator , of a body corporate’s business, means an administrator appointed under subsection 179AA(1) to take control of the body corporate’s business.

Australian business assets and liabilities , of an eligible foreign life insurance company, has the meaning given by subsection 16ZE(6).

Australian financial sector statutory manager (or AFS statutory manager ) means:

                     (a)  a Banking Act statutory manager (within the meaning of the Banking Act 1959 ); or

                     (b)  an Insurance Act statutory manager (within the meaning of the Insurance Act 1973 ); or

                     (c)  a Life Insurance Act statutory manager.

direction under this Act means a direction under any of the following provisions:

                     (a)  section 27A;

                     (b)  section 125A;

                     (c)  section 230AB;

                     (d)  section 230B.

111  Schedule (paragraph (a) of the definition of external administrator )

Omit “or provisional liquidator”.

112  Schedule (paragraph (b) of the definition of external administrator )

Omit “a judicial manager”, substitute “a judicial manager or Life Insurance Act statutory manager”.

113  Schedule

Insert:

financial market has the meaning given by section 761A of the Corporations Act 2001 .

holding company , of a body corporate, means another body corporate of which the first body corporate is a subsidiary.

Life Insurance Act statutory manager has the meaning given by subsection 179AA(8).

liquidator includes a provisional liquidator.

listing rules has the meaning given by section 761A of the Corporations Act 2001 .

NOHC/NOHC subsidiary has the meaning given by subsection 230AA(5).

prudential matters means matters relating to:

                     (a)  the conduct of any part of the affairs of, or the structuring or organising of, a life company, a registered NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, in such a way as:

                              (i)  to keep the life company, NOHC, group or member or members of the group in a sound financial position; or

                             (ii)  to facilitate resolution of the life company, NOHC, group or member or members of the group; or

                            (iii)  to protect the interests of policy owners of any life company; or

                            (iv)  not to cause or promote instability in the Australian financial system; or

                     (b)  the conduct of any part of the affairs of a life company, a registered NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, with integrity, prudence and professional skill.

114  Schedule (definition of recapitalisation direction )

Omit “subsection 230AB(1)”, substitute “subsection 230AB(1) or (1B)”.

115  Schedule

Insert:

related body corporate :

                     (a)  in Part 7—has the meaning given by section 129; and

                     (b)  otherwise—has the meaning given by section 16.

116  Schedule (definition of related company )

Repeal the definition.

117  Schedule

Insert:

relevant group of bodies corporate has the meaning given by section 15A.

resolution means the process by which APRA or other relevant persons manage or respond to an entity:

                     (a)  being unable to meet its obligations; or

                     (b)  being considered likely to be unable, or being considered likely to become unable, to meet its obligations; or

                     (c)  suspending payment, or being considered likely to suspend payment;

including through the exercise of powers and functions under this Act or another law.

subsidiary has the meaning given by section 16.

Part 2 Application provisions

118  Interpretation

In this Part:

commencement time means the time when this item commences.

new Life Insurance Act means the Life Insurance Act 1995 as amended by this Schedule.

old Life Insurance Act means the Life Insurance Act 1995 as in force immediately before the commencement time.

119  Application—amendments to directions powers

(1)       The amendments made by this Schedule to section 230B of the Life Insurance Act 1995 apply to directions given on and after the commencement time.

(2)       The amendments made by this Schedule to Subdivision A of Division 2 of Part 10A of the Life Insurance Act 1995 apply to directions given on and after the commencement time.

120  Continuation of prudential standards

To avoid doubt, the amendments made by this Schedule do not affect the validity of a prudential standard made under section 230A of the Life Insurance Act 1995 that was in force immediately before the commencement time.

121  Saving—conditions on registration under section 21

(1)       A condition in effect under subsection 22(1) of the old Life Insurance Act is taken to be in effect on and after the commencement time under section 22 of the new Life Insurance Act.

(2)       To avoid doubt, this item does not prevent the variation or revocation of a condition on or after the commencement time.

122  Application—conditions on registration under section 21

The amendment made by item 7 of this Schedule applies to:

                     (a)  the imposition of new conditions on a company’s registration under section 21 of the Life Insurance Act 1995 on or after the commencement time; and

                     (b)  the variation or revocation of conditions on a company’s registration under section 21 of the Life Insurance Act 1995 on or after the commencement time (even if the conditions were imposed before the commencement time); and

                     (c)  the doing of an act on or after the commencement time, or the failure to do an act on or after the commencement time, resulting in a contravention of such a condition.

123  Application—revocation of registration under section 21

(1)       The amendments made by items 8, 9, 10, 11 and 16 of this Schedule apply to a company’s registration under section 21 of the Life Insurance Act 1995 whether the registration was made before, on or after the commencement time.

(2)       The amendments made by items 8, 9, 10, 11 and 16 of this Schedule apply in relation to a matter mentioned in a paragraph of subsection 26(1) of the new Life Insurance Act that occurs on or after the commencement time (including such a matter that starts before the commencement time and continues on or after the commencement time).

124  Saving—conditions on NOHC registration

(1)       A condition in effect under subsection 28B(1) of the old Life Insurance Act is taken to be in effect on and after the commencement time under section 28B of the new Life Insurance Act.

(2)       To avoid doubt, this item does not prevent the variation or revocation of a condition on or after the commencement time.

125  Application—conditions on NOHC registration

The amendments made by items 12, 13 and 14 of this Schedule apply to:

                     (a)  the imposition of new conditions on a NOHC registration on or after the commencement time; and

                     (b)  the variation or revocation of conditions on a NOHC registration on or after the commencement time (even if the conditions were imposed before the commencement time); and

                     (c)  the doing of an act on or after the commencement time, or the failure to do an act on or after the commencement time, resulting in a contravention of such a condition.

126  Application—revocation of NOHC registration

(1)       The amendment made by item 15 of this Schedule applies to a NOHC registration whether the registration was made before, on or after the commencement time.

(2)       The amendment made by item 15 of this Schedule applies in relation to a matter mentioned in a paragraph of subsection 28C(1) of the new Life Insurance Act that occurs on or after the commencement time (including such a matter that starts before the commencement time and continues on or after the commencement time).

127  Application—stay provisions

(1)       The amendment made by item 38 of this Schedule applies in relation to a matter referred to in subsection 165B(3) of the new Life Insurance Act that occurs on or after the commencement time.

(2)       The amendment made by item 44 of this Schedule applies in relation to an act referred to in subsection 168C(3) of the new Life Insurance Act that is done on or after the commencement time.

(3)       The amendment made by item 80 of this Schedule applies in relation to a recapitalisation direction referred to in subsection 230AJ(3) of the new Life Insurance Act that is given on or after the commencement time.

(4)       The amendment made by item 89 of this Schedule applies in relation to a direction referred to in subsection 230C(1B) of the new Life Insurance Act that is given on or after the commencement time.

128  Application—conversion and write-off provisions

The amendment made by item 64 of this Schedule applies in relation to the conversion or writing-off of any instrument at or after the commencement time, whether the instrument was issued before, at or after that time.