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Schedule 4—Objects provisions

Schedule 4 Objects provisions

   

Banking Act 1959

1  After section 2

Insert:

2A   Main objects of this Act

             (1)  The main objects of this Act are:

                     (a)  to protect the interests of depositors in ADIs in ways that are consistent with the continued development of a viable, competitive and innovative banking industry; and

                     (b)  to promote financial system stability in Australia.

             (2)  This Act, and the prudential standards and non-ADI lender rules determined by APRA under this Act, achieve this mainly by:

                     (a)  restricting who can carry on banking business in Australia; and

                     (b)  providing for the prudential supervision of ADIs by APRA, by APRA determining prudential standards or taking other action to ensure prudent management of ADIs; and

                     (c)  providing for APRA to manage or respond to circumstances in which the ability of an ADI to meet its obligations may be threatened; and

                     (d)  providing for certain account-holders to be paid amounts where the financial claims scheme has been declared to apply in relation to an ADI; and

                      (f)  for the purposes of paragraph (1)(b)—providing rules in relation to the provision of certain kinds of finance by non-ADI lenders.

             (3)  It is intended that APRA, in taking actions to address risks to financial system stability in Australia, may consider specific sources of systemic risks, whether geographic, sectoral or otherwise.

             (4)  This section does not apply to the following:

                     (a)  Divisions 4 (Mobilization of foreign currency) and 5 (Advances) of Part II;

                     (b)  Parts III (Foreign exchange, foreign investment etc.), IV (Gold) and V (Interest rates);

                     (c)  any other provision of this Act, to the extent that it relates to any of the provisions mentioned in paragraph (a) or (b).

Insurance Act 1973

2  Section 2A (heading)

Repeal the heading, substitute:

2A   Main objects of this Act

3  Subsection 2A(1)

Repeal the subsection, substitute:

             (1)  The main objects of this Act are:

                     (a)  to protect the interests of policyholders and prospective policyholders under insurance policies (issued by general insurers and Lloyd’s underwriters) in ways that are consistent with the continued development of a viable, competitive and innovative insurance industry; and

                     (b)  to promote financial system stability in Australia.

4  Paragraphs 2A(2)(e) and (f)

Repeal the paragraphs, substitute:

                     (e)  providing for APRA to manage or respond to circumstances in which the ability of a general insurer to meet its obligations may be threatened; and

                      (f)  providing for certain policyholders to be paid amounts where the financial claims scheme has been declared to apply in relation to a general insurer.

Life Insurance Act 1995

5  Subsection 3(1)

Repeal the subsection, substitute:

             (1)  The main objects of this Act are:

                     (a)  to protect the interests of the owners and prospective owners of life insurance policies in a manner consistent with the continued development of a viable, competitive and innovative life insurance industry; and

                     (b)  to promote financial system stability in Australia.

6  Paragraph 3(2)(d)

Repeal the paragraph, substitute:

                     (d)  providing for APRA to manage or respond to circumstances in which the ability of a life company to meet its obligations may be threatened;