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Life Insurance (Conduct and Disclosure) Bill 1998

Part 1 P reliminary

   

1   Short title

                   This Act may be cited as the Life Insurance (Conduct and Disclosure) Act 1998 .

2   Commencement

             (1)  Sections 1, 2 and 15 of this Act commence on the day on which this Act receives the Royal Assent.

             (2)  Schedule 1 commences:

                     (a)  at the same time as section 3 of this Act, if Schedule 1 to the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 commences on or before that section; or

                     (b)  immediately after Schedule 1 to the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 , if that Schedule commences after section 3 of this Act.

             (3)  Subject to this section, Schedule 2 and the remaining provisions of this Act commence on a day to be fixed by Proclamation.

             (4)  Subject to subsection (5), if Schedule 2 and the remaining provisions of this Act do not commence under subsection (3) within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.

             (5)  Schedule 2 does not commence unless it does so before Schedule 1 to the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 .

3   Object of the Act

             (1)  The main object of this Act is to ensure that, as far as possible, owners, and prospective owners, of life insurance policies, and beneficiaries and prospective beneficiaries of certain group policies, receive sufficient relevant and accurate information to enable them to make informed choices relating to life insurance.

             (2)  The means adopted to achieve this object include the following:

                     (a)  imposing on life companies and life brokers obligations relating to their conduct, and the conduct of their respective life insurance advisers, in relation to the giving of life insurance advice;

                     (b)  imposing on life companies obligations relating to the production and provision of information about their life policies;

                     (c)  imposing on life insurance advisers obligations relating to the provision of information, and the form in which life insurance advice must be given.

4   Definitions

             (1)  In this Act, unless the contrary intention appears:

agent has the meaning given in section 5.

ASIC means the Australian Securities and Investments Commission.

associate , in relation to a life insurance adviser, means:

                     (a)  a person who is in partnership with the adviser in the conduct of life insurance business; or

                     (b)  an agent of a life company, or of a life broker, being an agent who employs the adviser; or

                     (c)  an agent of a life company, or of a life broker, being an agent of whom the adviser is an agent; or

                     (d)  a person with whom the adviser is acting, or proposes to act, in concert in relation to the giving of life insurance advice in the conduct of life insurance business; or

                     (e)  a trustee of a trust in relation to which the adviser benefits, or is capable of benefiting; or

                      (f)  a director of a life company, or of a life broker, of which the adviser is also a director.

Code means the Code of Practice for the Life Insurance Industry.

disclosure rules means regulations containing provisions of the kind mentioned in section 18.

disclosure statement means a statement that is in accordance with section 27 or 37, as the case requires.

group member means a member of a group scheme.

group policy means a life policy under a group scheme.

group scheme means:

                     (a)  a group superannuation scheme whose members are beneficiaries of a group policy under the scheme; or

                     (b)  a group insurance scheme whose members are beneficiaries of a group policy under the scheme.

life broker means a person registered under Part III of the Insurance (Agents and Brokers) Act 1984 in respect of life insurance business.

life insurance advice means a recommendation, whether expressed or implied:

                     (a)  that a person should enter into, vary, continue or discontinue, a life policy; or

                     (b)  that a person become, remain or stop being, a group member; or

                     (c)  that a person vary the benefits to which that person is entitled as a beneficiary under a group policy.

Note:          See section 8 in relation to implied recommendations.

life insurance adviser means:

                     (a)  a life insurance adviser of a life company within the meaning of Part 3; or

                     (b)  a life insurance adviser of a life broker within the meaning of Part 4.

life policy includes a sinking fund policy, but otherwise has the same meaning as it has in the Life Insurance Act 1995 : it does not, however, include a life policy or a sinking fund policy of a prescribed kind.

promotional material means any document or advertisement (whether or not produced or provided in accordance with the disclosure rules) that contains statements that might affect a person’s decision to engage in a life insurance activity.

staff member has the same meaning as in the Australian Securities and Investments Commission Act 1989 .

sub-agent , in relation to a life company or a life broker, means an agent of a person (whether a natural person or a body corporate) who is an agent of the company or broker.

this Act includes the regulations.

             (2)  Unless the contrary intention appears, a word or expression used in this Act has the same meaning as it has in the Life Insurance Act 1995 .

5   Agents

                   For the purposes of this Act, a person is taken to be an agent of another person if a written or oral agency agreement is in force between the person and the other person.

6   Issuing promotional material

                   For the purposes of this Act, a life company issues promotional material if the company, or a person acting for it or on its behalf:

                     (a)  publishes the material by any means (including by the use of the internet, or by radio or television, or by the use of other electronic equipment), or causes it to be so published; or

                     (b)  gives or transmits the material to another person by any means (including by the use of the internet or of facsimile or other electronic equipment), or causes it to be so given or transmitted, for the purpose of inviting or encouraging the person to make a decision to engage in a life insurance activity.

7   Engaging in a life insurance activity

             (1)  For the purposes of this Act, a person is taken to engage in a life insurance activity if the person:

                     (a)  enters into, varies, continues or discontinues, a life policy; or

                     (b)  becomes, remains or stops being, a group member; or

                     (c)  varies the benefits to which the person is entitled as a beneficiary under a group policy.

             (2)  For the purposes of this Act, a person who becomes, remains or stops being, a group member is taken to engage in a life insurance activity relating to the group policy under the scheme.

8   General information does not constitute an implied recommendation

                   For the purposes of this Act, a person is not taken to make an implied recommendation that another person engage in a life insurance activity merely because the person gives the other person an analysis of, or a report on, a life policy or life policies in general, without an analysis of the other person’s particular needs and financial situation.

9   Additional operation of the Act

                   Without prejudicing its effect apart from this section, this Act also has the effect it would have if each reference to a company were, by express provision, confined to a company that is a corporation to which paragraph 51(xx) of the Constitution applies.

10   Exclusion of certain State insurance

                   This Act does not apply with respect to State insurance that does not extend beyond the limits of the State concerned.

11   Extension to Norfolk Island

                   This Act extends to Norfolk Island.

12   General administration

                   ASIC has the general administration of this Act.

13   Application of the Criminal Code

                   Chapter 2 of the Criminal Code applies to all offences against this Act.

14   Act not to affect operation of other Acts

                   This Act does not affect the operation of the Life Insurance Act 1995 , the Insurance (Agents and Brokers) Act 1984 or the Trade Practices Act 1974 .

15   Schedule(s)

                   Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.