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Thursday, 22 May 1980
Page: 3153

Mr Jacobi asked the Treasurer, upon notice, on 2 April 1980:

(1)   Has neither (a) section 1 13 of the Insurance Act 1973, nor (b) the subsequent amendments to this section which were assented to on 1 8 May 1977 been proclaimed.

(2)   If so, (a) has the non-proclamation of these provisions had an adverse effect on Australian insurance companies and (b) will he take steps immediately to have these provisions proclaimed.

(3)   If he will not take steps to have these provisions proclaimed, will he give urgent consideration to modification of this section.

Mr Howard -The answer to the honourable member's question is as follows:

(1)   None of the provisions of section 113 has yet been proclaimed. The section was amended in 1 977 as it was considered to be unduly restrictive, particularly in relation to reinsurance. In my press statement of 12 February 1979, I indicated that it was proposed to implement the provisions of the section in two stages- viz sub-section 113 (4) as soon as the necessary regulations were prepared, followed by subsections 1 13 ( 1 ) to (3). However, in the process of preparing regulations for purposes of sub-section 113(4), it became apparent that the provisions of that sub-section would require the collection of unnecessarily detailed information, would impose unreasonable burdens on those required to furnish that information, and could prove unworkable in practice. Urgent consideration is currently being given to resolving these problems.

(2)   (a) As indicated in (1) above, both the original provisions of section 1 13 and the provisions as amended contain defects which would cause difficulties for the insurance industry. While I am aware that some sectors of the industry have sought early proclamation of these provisions, I am unable to provide any precise indication of the effects on the industry of non-proclamation of the provisions.

(b)   It would not be appropriate to take steps to implement these provisions until sound and workable procedures have been developed.

(3)   See (1) above.

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