2002

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

Treasury Legislation Amendment Bill (No. 1) 2002

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Revenue and Assistant Treasurer,

Senator the Hon Helen Coonan)

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Table of Contents

Outline............................................................................................................................................................................................... 1

Financial Impact Statement............................................................................................................................................ 1

explanation of clauses....................................................................................................................................................... 2

Outline

1.1          This Bill clarifies the operation of amendments to the Financial Sector (Collection of

Data — Consequential and Transitional Provisions) Act 2001 (CoD) and the General Insurance Reform Act 2001 (GIRA).

1.2          The Bill ensures that the two Acts have their intended effect by legislating that the provisions of the CoD commenced immediately before the provisions of the GIRA. This would ensure that, where the same provision is amended by both of the Acts, the amendments made by the CoD operate first.

1.3          The provisions of the CoD relating to general insurance, Part 3 of Schedule 2, were intended to commence by proclamation on 1 October 2001 and the GIRA, which amended provisions in Part 3, was drafted accordingly.

1.4          The original proclamation of the commencement of Part 3 of Schedule 2 was invalid, and a further proclamation was made. This provided that the provisions would commence on 1 July 2002 which was the same day as the GIRA provisions commenced.

1.5          This has led to an ambiguity as it is unclear whether the provisions contained in the CoD, which repealed sections of the Insurance Act 1973 , operate before or after the amendments made by the GIRA, which substitute new provisions. The repeal was intended to take place first and the provisions contained within the GIRA are those that are meant to have effect.

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

Financial Impact Statement

1.7          The Bill has no financial impact.

Explanation of Clauses

Clause 1: Short title

1.8          Clause 1 is a formal provision specifying the title of the Bill.

Clause 2: Commencement

1.9          The Bill will commence on the day it receives Royal Assent.

Clause 3: Purpose of Act

1.10      The Bill clarifies the operation of the CoD and GIRA.

Clause 4: Operation of Amendments

1.11      This clause ensures that, where the same provision is amended in both Acts, the amendments made by the CoD operate before those of the GIRA.