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1996
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
FINANCIAL LAWS
AMENDMENT BILL 1996
EXPLANATORY
MEMORANDUM
(Circulated by
authority of the Assistant Treasurer, Senator the Hon Rod
Kemp)
79479—Cat. No. 96 5442 9—ISBN 0644
481498
FINANCIAL LAWS AMENDMENT BILL 1996
GENERAL
OUTLINE
This Bill will amend: the Banking Act 1959; the Banks
(Shareholdings) Act 1972; the Financial Corporations Act 1974; the Financial
Corporations (Transfer of Assets and Liabilities) Act 1993; the Insurance Act
1973; the Insurance Acquisitions and Takeovers Act 1991; the Insurance (Agents
and Brokers) Act 1984; the Insurance Contracts Act 1984; the Insurance Laws
Amendment Act 1994; the Insurance Supervisory Levies Collection Act 1989; the
Life Insurance Act 1995; the Reserve Bank Act 1959; and the Superannuation
Industry (Supervision) Act 1993. In addition, the Bill repeals the Insurance
(Deposits) Act 1932.
The main purpose of the amendments is to improve
information sharing between the Reserve Bank of Australia (RBA) and the
Insurance and Superannuation Commission (ISC) and between those organisations
and other domestic and overseas financial regulators. The Bill also to makes
miscellaneous technical refinements to insurance laws to enhance the efficiency
and effectiveness of their operation.
In particular, the amendments set
out in this Bill enhance the information sharing provisions of legislation
administered by the ISC and RBA. The amendments will improve the prudential
supervision of banks, superannuation funds and insurers by enabling the ISC and
RBA to move quickly to exchange information to prevent and/or manage a crisis
situation arising in a financial conglomerate in Australia. The proposed
information sharing amendments are consistent with international 'best practice'
in financial regulation. Administrative arrangements will ensure
commercial-in-confidence information is suitably protected.
The Bill
repeals the Insurance (Deposits) Act 1932 and makes minor amendments to
insurance legislation. They relate, inter alia, to minor adjustments to the
balance of the respective interests of consumers and insurers under insurance
contracts, improving supervision of insurance companies, by, among other things,
giving the Insurance and Superannuation Commissioner power to exercise some
prudential control over related companies of insurance companies, removing
drafting errors and technical difficulties, and providing statutory backing to
the industry based Code of Practice.
The Bill also includes numerous
amendments that update the Principal Acts, including making the wording of
provisions gender inclusive; updating provisions that create offences in line
with current Commonwealth criminal law policy; deleting obsolete references to
Papua New Guinea; and updating definitions by reference to the Corporations
Law.
The Bill also amends the Financial Corporations (Transfer of
Liabilities) Act 1993 to extend by two years the deadline by which foreign bank
subsidiaries or money market corporations can apply for, and convert to, branch
banking status and qualify for the concessional taxation and other treatment
provided for under the Principal Act.
FINANCIAL IMPACT
STATEMENT
There is no financial impact as a result of these
amendments.
NOTES ON CLAUSES
Clause 1 Short
title
1. This clause provides for the Act to be cited as the Financial
Laws Amendment Act 1996.
Clause 2 Commencement
2. This clause
provides for the commencement of the Act. In general, the Act shall come into
operation on the day it receives Royal Assent. Items 15 to 20 of Schedule 3
relate to provisions of the Financial Corporations Act 1974 which are yet to
receive the Royal Assent. These items will commence upon the day of the Royal
Assent of those provisions. Items which correct ambiguities and drafting errors
in Schedule 10 and Schedule 7 are taken to have commenced upon the commencement
of the Insurance Laws Amendment Act 1994, that is 1 October 1994, to ensure
continuity of that Act.
Clause 3 Schedule(s)
3. This clause
provides that the Acts specified in Schedules 1 to 14 are amended or repealed as
provided for in the Schedules, and that items in the Schedule otherwise have
effect according to their terms.
SCHEDULE 1
AMENDMENT OF THE
BANKING ACT 1959
Item 1 - Subsection 38A(3)
4. This item replaces
existing language with gender inclusive language.
Item 2 - Paragraph
39(2)(q)
5. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 3 - Paragraph 42(1)(b)
6. This item
replaces existing language with gender inclusive language.
Item 4 -
Paragraphs 69A(3)(a) and (b)
7. This item updates the penalty from a
monetary penalty to penalty units in accordance with section 4AA of the Crimes
Act 1914. The amendment is consistent with Government policy to standardise all
penalties in Commonwealth legislation.
Item 5 - At the end of subsection
69A(3)
8. This item adds a note which makes it clear that subsection
4B(3) and section 4J of the Crimes Act 1914 apply where a person, including a
body corporate, is convicted of an offence under this section. The addition
brings the Principal Act into line with current Commonwealth criminal law
policy.
Item 6 - Section 69B
9. This item repeals the section.
Matters referred to in this section will be dealt with in subsection
69A(3).
Item 7 - Section 69D
10. This item repeals the current
disclosure of information section and substitutes text providing for section 79A
of the Reserve Bank Act 1959 to govern the disclosure of information received
under the Principal Act. This interacts with other amendments to give the
Reserve Bank of Australia discretionary power to disclose, among other things,
protected information about financial institutions directly to other financial
regulatory agencies in Australia and overseas where it is desirable to assist
those agencies in the performance of their functions or exercise of their
powers.
Item 8 - Paragraph 71(1)(a)
11. This item updates the
penalty from a monetary penalty to penalty units in accordance with section 4AA
of the Crimes Act 1914. The amendment is consistent with Government policy to
standardise all penalties in Commonwealth legislation.
Item 9 - Paragraph
71(1)(b)
12. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
SCHEDULE 2
AMENDMENT OF THE BANKS
(SHAREHOLDINGS) ACT 1972
Item 1 - Paragraph 8(3)(a)
13. This item
updates a reference to the Companies Act 1981 to a reference to the Corporations
Law.
Item 2 - Paragraph 8(3)(c)
14. This item updates a reference
to the Companies Act 1981 to a reference to the Corporations Law.
Item 3
- Subparagraph 8(5)(a)(i)
15. This item updates a reference to the
Companies Act 1981 to a reference to the Corporations Law.
Item 4 -
Paragraph 8(6)(d)
16. This item replaces existing language with gender
inclusive language.
Item 5 - Subsections 10(12) and (13)
17. This
item repeals the subsections and inserts replacements that contain updated
penalties. It also adds a note which makes it clear that subsection 4B(3) of
the Crimes Act 1914 applies where a body corporate is convicted of an offence
under this section. These changes bring the Principal Act into line with
current Commonwealth criminal law policy.
Item 6 - Subsection
12(7)
18. This item repeals the subsection and inserts a replacement that
updates the penalty. It also adds a note which makes it clear that subsection
4B(3) of the Crimes Act 1914 applies where a body corporate is convicted of an
offence under this section. These changes bring the Principal Act into line
with current Commonwealth criminal law policy.
Item 7 - After section
14
19. This item substitutes existing text with new text providing for
section 79A of the Reserve Bank Act 1959 to govern the disclosure of
information received under the Principal Act. This interacts with other
amendments to give the Reserve Bank of Australia discretionary power, among
other things to disclose protected information about financial institutions
directly to other financial regulatory agencies in Australia and overseas where
it is desirable to assist those agencies in the performance of their functions
or exercise of their powers.
SCHEDULE 3
AMENDMENT OF THE FINANCIAL
CORPORATIONS ACT 1974
Item 1 - Subsection 4(1) (definition of
Australia)
20. This item recognises that Papua New Guinea is no longer a
Territory of Australia.
Item 2 - Subsection 4(1) (definition of financial
corporation)
21. This item brings the citation to the Constitution into
line with current Commonwealth drafting practice.
Item 3 - Subsection
4(1) (definition of Territory)
22. This item recognises that Papua New
Guinea is no longer a Territory of Australia.
Item 4 - Subsection 4(1)
(definition of trading corporation)
23. This item brings the reference to
the Constitution into line with current Commonwealth drafting
practice.
Item 5 - Section 5
24. This item recognises that Papua
New Guinea is no longer a Territory of Australia.
Item 6 - Subsection
7(1)
25. This item updates a reference to the Companies Act 1981 to a
reference to the Corporations Law.
Item 7 - Subsection
9(3)
26. This item updates the penalty from a monetary penalty to penalty
units in accordance with section 4AA of the Crimes Act 1914. The amendment is
consistent with Government policy to standardise all penalties in Commonwealth
legislation.
Item 8 - Subsection 9(7) (penalty)
27. This item
updates the penalty from a monetary penalty to penalty units in accordance with
section 4AA of the Crimes Act 1914. The amendment is consistent with Government
policy to standardise all penalties in Commonwealth legislation.
Item
9 - Subsection 9(11)
28. This item replaces existing language with gender
inclusive language.
Item 10 - Subsection 10(1)
29. This item
replaces existing language with gender inclusive language.
Item 11 -
Paragraph 10(7)(d)
30. This item replaces existing language with gender
inclusive language.
Item 12 - Subsection 11(10)
31. This item
updates the penalty from a monetary penalty to penalty units in accordance with
section 4AA of the Crimes Act 1914. The amendment is consistent with Government
policy to standardise all penalties in Commonwealth legislation.
Item 13
- Subsection 11(11)
32. This item replaces existing language with gender
inclusive language.
Item 14 - Subsection 11(14)
33. This item
replaces existing language with gender inclusive language.
Item 15 -
Subsection 13(7)
34. This item updates the penalty from a monetary
penalty to penalty units in accordance with section 4AA of the Crimes Act 1914.
The amendment is consistent with Government policy to standardise all penalties
in Commonwealth legislation.
Item 16 - Subsection 14(1)
(penalty)
35. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 17 - Subsection 14(3)
(penalty)
36. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 18 - Subsection 15(5)
37. This
item updates the penalty from a monetary penalty to penalty units in accordance
with section 4AA of the Crimes Act 1914. The amendment is consistent with
Government policy to standardise all penalties in Commonwealth
legislation.
Item 19 - Subsection 18(1)
38. This item replaces
existing language with gender inclusive language.
Item 20 - Section 18
(penalty)
39. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 21 - Subsection 20(1)
(penalty)
40. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 22 - Section 22
41. This item
repeals the current disclosure of information section. Replacement text states
that section 79A of the Reserve Bank Act 1959 prohibits certain disclosures of
information received under the Principal Act. This interacts with other
amendments to give the Reserve Bank of Australia discretionary power among other
things to disclose protected information about financial institutions directly
to other financial regulatory agencies in Australia and overseas where it is
desirable to assist these agencies in the performance of their functions or
exercise of their powers.
Item 23 - Section 26 (penalty)
42. This
item updates the penalty from a monetary penalty to penalty units in accordance
with section 4AA of the Crimes Act 1914. The amendment is consistent with
Government policy to standardise all penalties in Commonwealth
legislation.
Item 24 - Section 27
43. This item repeals the
current secrecy provisions. Replacement text is found under section 22 which
refers to section 79A of the Reserve Bank Act 1959.
Item 25 - Subsection
30(2)
44. This item replaces existing language with gender inclusive
language.
SCHEDULE 4
AMENDMENT OF THE FINANCIAL CORPORATIONS
(TRANSFER OF ASSETS AND LIABILITIES) ACT 1993
Item 1 - Section 3
(paragraph (b) of the definition of eligible foreign bank)
45. This item
extends the date by which foreign banks can apply for branch banking status from
22 December 1996 to 22 December 1998. The Principal Act was introduced to
facilitate the establishment of foreign bank branches in Australia by ensuring
that a foreign bank established here either as a subsidiary or money market
corporation prior to 18 June 1993 was not disadvantaged compared with a new
foreign bank entrant. Specifically, the Principal Act provides relief from
taxation and fees, which otherwise would be levied by Commonwealth, State or
Territory legislation on the transfer of certain assets and liabilities involved
in converting to a branch structure. The Principal Act currently only has
application to foreign bank subsidiaries or money market corporations that apply
for an Australian foreign branch banking authority before 22 December 1996 and
where the associated transfers are completed by 22 December 1999.
Item 2
- Paragraph 7(6)(c)
46. This item extends the deadline by which the
transfer of assets and liabilities needs to be completed from 22 December 1999
to 22 December 2001. The Principal Act was introduced to facilitate the
establishment of foreign bank branches in Australia by ensuring that a foreign
bank established here either as a subsidiary or money market corporation prior
to 18 June 1993 was not disadvantaged compared with a new foreign bank entrant.
Specifically, the Principal Act provides relief from taxation and fees, which
otherwise would be levied by Commonwealth, State or Territory legislation, on
the transfer of certain assets and liabilities involved in converting to a
branch structure. The Principal Act currently only has application to foreign
bank subsidiaries or money market corporations that apply for an Australian
foreign branch banking authority before 22 December 1996 and where the
associated transfers are completed by 22 December 1999.
SCHEDULE
5
AMENDMENT OF THE INSURANCE ACT 1973
Item 1 - Subsection 3(1)
(definition of accounts)
47. This item inserts cross-referencing to
amended and newly inserted provisions.
Item 2 - Subsection
3(1)
48. This item gives consistency to the meaning of a building society
between the Principal Act and the Australian Financial Institutions Commission
Act 1992 of Queensland.
Item 3 - Subsection 3(1)
49. This item
gives consistency to the meaning of a credit union between the Principal Act and
the Australian Financial Institutions Commission Act 1992 of
Queensland.
Item 4 - Subsection 3(1) (definition of financial
year)
50. This item repeals the definition of a financial year based on
the Companies Act 1981 and replaces it with the updated definition of a
financial year in the Corporations Law.
Item 5 - Subsection 3(1)
(paragraph (f) of the definition of insurance business)
51. This item
replaces existing language with gender inclusive language.
Item 6 -
Subsection 3(1) (paragraph (f) of the definition of insurance
business)
52. This item replaces existing language with gender inclusive
language.
Item 7 - Subsection 3(1) (paragraph (h) of the definition of
insurance business)
53. This item replaces existing language with gender
inclusive language
Item 8 - Subsection 3(1) (paragraph (i) of the
definition of insurance business)
54. This item replaces existing
language with gender inclusive language.
Item 9 - Subsection 3(1)
(definition of quarterly statutory accounts)
55. This item updates the
definition of quarterly statutory accounts to enable the Commissioner to require
accounts not only from bodies corporate authorised under the Principal Act to
conduct insurance business, but also from supervised bodies
corporate.
Item 10 - Subsection 3(1)
56. This item inserts a
definition of securities exchange. This definition is referred to in later
sections relating to the valuation of securities for both insurers and
supervised bodies corporate.
Item 11 - Subsection 3(1) (definition of
statutory accounts)
57. This item updates the definition of statutory
accounts to enable the Commissioner to require accounts not only from bodies
corporate authorised under the Principal Act to conduct insurance business, but
also from supervised bodies corporate.
Item 12 - Subsection
3(1)
58. This item introduces a definition of a supervised body corporate
consistent with that of section 49A.
Item 13 - Subsection 3(1)
(definition of yearly statutory accounts)
59. This item updates the
definition of yearly statutory accounts to enable the Commissioner to require
accounts not only from bodies corporate authorised under the Principal Act to
conduct insurance business but also from supervised bodies
corporate.
Item 14 - At the end of section 3
60. This item allows
the Treasurer to approve a body as a securities exchange under subsection 3(1).
This definition is referred to in later sections relating to the valuation of
securities for both insurers and supervised bodies corporate.
Item 15 -
Section 4
61. This item repeals the definition of related bodies
corporate based on the Companies Act 1981 and replaces it with updated
references to related bodies corporate in the Corporations Law.
Item 16 -
Section 19A
62. This item repeals section 19A and inserts a new section
19A to clarify the scope of the Commissioner's powers that can be delegated, and
the means for delegating them under the Principal Act.
Item 17 -
Saving
63. This item states that a delegation in force under section 19A
immediately before the commencement of item 16 remains in force as if it has
been given under the new provision.
Item 18 - Subsections 21(1) and
(3)
64. This item updates the penalty from a monetary penalty to penalty
units in accordance with section 4AA of the Crimes Act 1914. The amendment is
consistent with Government policy to standardise all penalties in Commonwealth
legislation.
Item 19 - Subsections 21(2)
65. This item updates the
penalty from a monetary penalty to penalty units in accordance with section 4AA
of the Crimes Act 1914. The amendment is consistent with Government policy to
standardise all penalties in Commonwealth legislation.
Item 20 -
Subsection 21(3)
66. This item replaces existing language with gender
inclusive language.
Item 21 - Subsection 22(5) (penalty)
67. This
item updates the penalty from a monetary penalty to penalty units in accordance
with section 4AA of the Crimes Act 1914. The amendment is consistent with
Government policy to standardise all penalties in Commonwealth
legislation.
Item 22 - Paragraph 30(1)(a)
68. This item increases
the scope of assets of a body corporate that are not counted for solvency
purposes by including any debt owing to the authorised insurer by a specified
director. Prior to the amendment a technical difficulty existed in the
legislation where by an insurer could represent a loan to a specified director
as 'an advance' rather than a loan. The amendment is necessary to ensure the
solvency of an insurer is not jeopardised by counting for solvency purposes
assets that are not readily available or accessible to the insurer.
Item
23 - Paragraph 30(1)(d)
69. This item redrafts paragraph 30(1)(d) for
clarity and provides that an amount due to a body corporate in respect of a
deposit in a bank, building society, credit union or other body corporate
declared by the regulations to be a body corporate to which this paragraph does
not apply which is related to the body corporate, does not constitute an asset
which, under section 30, is precluded from being counted towards the insurer's
solvency.
Item 24 - Paragraph 30(1)(e)
70. This item is a
consequential amendment which removes a now obsolete reference to subsection
30(3). Subsection 30(3) has been repealed.
Item 25 - Subsection
30(2)
71. This item repeals the existing subsection 30(2) and inserts a
new subsection 30(2) that sets out the circumstances the Commissioner may, for
the purpose of assessing the solvency of a body corporate (the first body
corporate), approve assets in another body corporate (the second body corporate)
that is related to the first body corporate. This item also provides that both
the first and second bodies corporate, in making a request to the Commissioner
for approval of an asset under the subsection, must do so together in
writing.
Item 26 - Saving
72. This item states that an approval in
force under subsection 30(2) immediately before the commencement of the new
subsection in item 25, remains in force as if it has been given under the terms
and conditions prior to the amendment.
Item 27 - Subsection
30(2A)
73. This item repeals the existing subsection 30(2A) and inserts a
new subsection 30(2A) which uses language consistent with the new subsection
30(2).
Item 28 - Before subsection 30(2B)
74. This item inserts a
new subsection 30(2AA) which provides a definition of a relevant asset of the
first body corporate in relation to the second body corporate as referred to in
the new subsection 30(2A).
Item 29 - Subsection 30(3)
75. This
item repeals subsection 30(3). The amendment removes the Commissioner's
discretion to approve, as assets for the purposes of assessing the solvency of
an insurer, premiums unpaid for greater than three months but less than nine
months. This change is necessary since the Commissioner's approval of such
assets for insurers may implicitly sanction a contravention of the Insurance
(Agents and Brokers) Act 1984.
Item 30 - After Subsection
30(5)
76. This item inserts a new subsection 30(5AA) which deems certain
monies recoverable under reinsurance contracts entered into with persons outside
Australia, where payments under the contract are required to be made in
Australia, to be assets in Australia for the purposes of the insurer's solvency
under the Principal Act.
77. The Principal Act provides that an insurer
should always maintain assets in Australia sufficient to meet its liabilities
within Australia. The introduction of accounting standard AASB 1023 brought
about a change in the accounting treatment of underwriting liabilities for both
premiums and claims. One practical effect of this has been that, for a large
number of insurers entitled to reinsurance recoveries from overseas insurers,
those recoveries are now reported as an 'outside-Australia' asset and hence do
not count for the purposes of the 'inside-Australia' solvency test.
Accordingly, many companies, while satisfying the overall solvency test, may
have been in breach of the 'inside-Australia' test due to the exclusion of the
reinsurance assets held outside Australia.
Item 31 - Subsection
30(5A)
78. This item reflects the repeal of subsection 30(3) which was
cited in this provision.
Item 32 - Paragraph 30(6)(c)
79. This
item reflects the repeal of subsection 30(3) which was cited in this
provision.
Item 33 - Subsection 31(3)
80. This item amends
subsection 31(3) to make the Commissioner's direction to an insurer in respect
of its liabilities subject to the Treasurer's agreement. Prior to the
amendment, directions made by the Commissioner to insurance companies in respect
to their liabilities were reviewable by the Administrative Appeals
Tribunal.
Item 34 - After subsection 31(3A)
81. This item provides
that subsection 31(3A) does not apply to a decision made within 5 years after
the commencement of this subsection. The effect of this is that a decision by
the Commissioner under subsection 31(3) will not, for a period of five years, be
reviewable by the Administrative Appeals Tribunal (AAT). This process will
remove the risk of insurers using AAT appeal processes to effectively 'stay' the
Commissioner's directions, given the potential for ensuing time delays to
jeopardise policy holder interests. The new process will be in place for five
years to ensure its efficacy is reviewed.
Item 35 - Subsection
31(3B)
82. This item amends subsection 31(3B) to make the Commissioner's
revocation or variation of a direction to an insurer in respect of its
liabilities subject to the Treasurer's agreement. Prior to the amendment,
directions made by the Commissioner to insurance companies in respect to their
liabilities were reviewable by the Administrative Appeals
Tribunal.
Item 36 - Paragraph 31(3C)(a)
83. This items amends
paragraph 31(3C)(a) to make the Commissioner's assessment that a direction to an
insurer in respect of its liabilities is no longer necessary or should be
varied, subject to the Treasurer's agreement. Prior to the amendment,
directions made by the Commissioner to insurance companies in respect to their
liabilities were reviewable by the Administrative Appeals Tribunal.
Item
37 - Subsection 31(3F)
84. This item updates the penalty from a monetary
penalty to penalty units in accordance with section 4AA of the Crimes Act 1914.
The amendment is consistent with Government policy to standardise all penalties
in Commonwealth legislation.
Item 38 - Subsection 33(3)
85. This
items amends paragraph 33(3) to make a decision by the Commissioner under the
subsection subject to the Treasurer's agreement. Prior to the amendment,
directions made by the Commissioner to insurance companies in respect to their
liabilities were reviewable by the Administrative Appeals Tribunal.
Item
39 - Subsection 33(4)
86. This item provides that any valuation of
securities under subsection 33(4) is subject to the Commissioner's directive
that may be exercised under subsection 33(3).
Item 40 - Subsection
33(4)
87. This item removes the now obsolete term stocks and replaces it
with securities.
Item 41 - Subsection 33(6)
88. This item provides
that any valuation of assets under subsection 33(6) is subject to the
Commissioner's directive that may be exercised under subsection
33(3).
Item 42 - After subsection 33(6A)
89. This item inserts a
new subsection 6B which provides that the Commissioner can direct that the value
of an asset held by an authorised insurer in a connected body corporate (as
defined by Part IVA), may be reduced by an amount stated in the notice,
determined by a procedure in accordance with principles specified in regulations
made for the purposes of this section.
Item 43 - Subsection 33(7)
(definition of securities)
90. This item omits outdated references to the
Companies Act 1981 and substitutes the relevant reference to the Corporations
Law.
Item 44 - At the end of section 33
91. This item provides
that subsection 33(8) does not apply to a direction made within five years after
the commencement of this subsection. The effect of this is that a decision by
the Commissioner under section 33 will not, for a period of five years, be
reviewable by the Administrative Appeals Tribunal (AAT). This process will
remove the risk of insurers using AAT appeal processes to effectively 'stay' the
Commissioner's directions, given the potential for ensuing time delays to
jeopardise policy holder interests. The new process will be in place for five
years to ensure its efficacy is reviewed.
Item 45 - Section 37
(penalty)
92. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 46 - Subsection 39(4)
93. This item
updates subsection 39(4) to replace the reference to the Companies Act 1981 with
the Corporations Law.
Item 47 - Section 40 (penalty)
94. This item
updates the penalty from a monetary penalty to penalty units in accordance with
section 4AA of the Crimes Act 1914. The amendment is consistent with Government
policy to standardise all penalties in Commonwealth legislation.
Item 48
- Subsection 41(2)
95. This item amends subsection 41(2) to makes the
Commissioner's directive in relation to apportionment by insurer's of their
income and expenses subject to the Treasurer's agreement. Prior to the
amendment, directions made by the Commissioner to insurance companies in respect
to their apportionment of income/expenses were reviewable by the Administrative
Appeals Tribunal.
Item 49 - At the end of section 41
96. This item
provides that subsection 41(3) does not apply to a direction made within five
years after the commencement of this subsection. The effect of this is that a
decision by the Commissioner under subsection 41(2) will not, for a period of
five years, be reviewable by the Administrative Appeals Tribunal (AAT). This
process will remove the risk of insurers using AAT appeal processes to
effectively 'stay' the Commissioner's directions, given the potential for
ensuing time delays to jeopardise policy holder interests. The new process will
be in place for five years to ensure its efficacy is reviewed.
Item
50 - At the end of paragraph 44(2)(m)
97. This item amends paragraph
44(2)(m) so that the accounts and statements are in a form approved by a
disallowable instrument made by the Commissioner. The Principal Act requires
insurers to report on their underwriting activities on a number of statutory
forms. Prior to the amendment, 12 forms were prescribed by the Principal Act, 5
prescribed by regulation and the content of all forms was prescribed by
regulation. As a consequence, every revision of the technical information to be
reported on these forms, no matter how minute, was the subject of amending
regulation. Replacing the need for Ministerial consent (via regulation) with
written determinations made by the Commissioner will bring these provisions into
line with many other Acts, including the superannuation legislation, which
leave form and content of statutory reporting forms to the direction of the head
of the responsible agency.
Item 51 - At the end of subsection
44(7)
98. This item amends subsection 44(7) so that the statutory
accounts (lodged under subsection (1), (4) or (6)) shall be in accordance with
the form determined by the Commissioner.
Item 52 - After subsection
44(7)
99. This item inserts subsections 44(7A) and 44(7B), that allow the
Commissioner to make written determinations to prescribe forms for the purposes
of this section. Such a determination is a disallowable instrument for the
purposes of section 46A of the Acts Interpretation Act 1901.
Item 53 -
After subsection 44(8)
100. This item inserts a new subsection 44(8A)
which, together with item 54, clarifies the penalty in respect of cases where
the time limit for the lodgement of a company's statutory accounts has been
extended pursuant to the Commissioner's power under section 49, and a company
has failed to lodge is statutory accounts within the extended
timeframe.
Item 54 - Section 44 (penalty)
101. This item restates
and clarifies the penalty for a breach of the Principal Act. This provision
makes it an offence for a company to fail to lodge its yearly statutory accounts
within the statutory time limit of four months. Prior to the amendment, the
provision was silent on a penalty in cases where the time limit had been
extended pursuant to the Commissioner's power under section 49.
Item
55 - Section 48 (penalty)
102. This item updates the penalty from a
monetary penalty to penalty units in accordance with section 4AA of the Crimes
Act 1914. The amendment is consistent with Government policy to standardise all
penalties in Commonwealth legislation.
Item 56 - Subsection
48A(9)
103. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 57 - After Part IV
104. This item
inserts a new part, Part IVA. Prior to the amendment, assets held by authorised
insurers in related bodies corporate were not included in calculations of
solvency. For historical and commercial reasons, many solvent insurers held a
large proportion of their assets within related bodies corporate. Section 30 of
the Principal Act allowed the Commissioner discretion to approve these assets
for solvency purposes. However, as the Commissioner had no control over the
operations of related bodies corporate, the Commissioner was reluctant to
exercise this discretionary power. Insurers were unwilling to transfer the
assets back into their own balance sheets as they would be liable for
substantial taxation costs on the transfers. Part IVA and associated provisions
are designed to give the Commissioner power to exercise prudential control over
the operations of related bodies corporate and will therefore provide a sound
basis on which the Commissioner can exercise discretion to allow assets held
within related bodies corporate to be included for the purposes of an insurer's
solvency calculations.
105. Section 49A provides general definitions for
Part IVA. Section 49B defines connected bodies corporate and provides that Part
IVA does not apply to connected bodies corporate which are otherwise
prudentially supervised including authorised insurers, registered life insurers,
banks, State banks, building societies and credit unions. Section 49C provides
that Part IVA applies to supervised bodies corporate. Section 49D gives the
Commissioner powers to exempt a connected body corporate completely or in part,
from the provisions of Part IVA.
106. Section 49E defines what may be
included as the assets of a supervised body corporate and the means for valuing
assets held by a supervised body corporate in a connected body corporate.
Section 49F requires that a supervised body corporate must make provision in its
statutory accounts for liabilities. The Commissioner, subject to the
Treasurer's agreement, may require the supervised body corporate to increase or
vary its liabilities provision. Section 49G provides for the means for
valuation of assets in a supervised body corporate.
107. Section 49H
lists the accounts that a supervised body corporate is required to keep and
other conditions attached to the maintenance of its accounting records.
Sections 49J and 49K set out the requirements for lodgement of accounts by a
supervised body corporate and the penalty for non-compliance. Section 49L sets
out the conditions for the appointment of an auditor to a supervised body
corporate and section 49M sets out the requirements for the auditing of the
accounts of a supervised body corporate. Section 49N requires that an auditors
certificate must be lodged with the Commissioner. Section 49P allows the
Commissioner to extend, or further extend the amount of time that a supervised
body corporate has for lodging its statutory accounts, certificate or
document.
Item 58 - Subsection 50(1) (definition of prescribed
interest)
108. This item replaces an outdated reference to the Companies
Act 1981 to a reference to the Corporations Law.
Item 59 - Subsection
50(1) (subparagraph (c)(i) of the definition of prescribed person)
109. This item replaces existing language with gender inclusive
language.
Item 60 - At the end of section 50
110. This item makes
it clear that the powers of investigation under Part V apply to all bodies to
which Part IVA applies.
Item 61 - Paragraph 51(1)(b)
111. This
item amends paragraph 51(1)(b) to make the Commissioner's direction, in relation
to dealing with assets, subject to the Treasurer's agreement. Prior to the
amendment, directions made by the Commissioner to insurance companies were
reviewable by the Administrative Appeals Tribunal.
Item 62 - Subsections
51(2), (3), (4) and (5)
112. This item repeals existing subsections and
inserts new subsections which extend the Commissioner's power to require
information from, and freeze assets of, an insurer, to a connected body
corporate. The item also provides that such powers cannot be exercised in
relation to a connected body corporate unless the powers have been, or will be,
at about the same time, exercised in relation to the insurer.
113. This
item also provides that subsection 51(3) does not apply to a direction made
within five years after the commencement of this subsection. The effect of this
is that a decision by the Commissioner under section 51 will not, for a period
of five years, be reviewable by the Administrative Appeals Tribunal (AAT). This
process will remove the risk of insurers using AAT appeal processes to
effectively 'stay' the Commissioner's directions, given the potential for
ensuing time delays to jeopardise policy holder interests. The new process will
be in place for five years to ensure its efficacy is reviewed.
Item
63 - After subsection 52(1)
114. This item extends the Commissioner's
powers under section 52 to connected bodies corporate and provides that the
Commissioner cannot investigate a connected body corporate unless the powers
have been, or will be at or about the same time, exercised in relation to the
insurer.
Item 64 - Paragraphs 52(2)(a) and (b)
115. This item
extends the Commissioner's or inspector's powers to conduct an investigation of
the business of an insurer, to a connected body corporate.
Item 65 -
Subsection 54(1)
116. This item extends the Commissioner's or inspector's
powers to enter premises of an insurer, to premises of a connected body
corporate.
Item 66 - Paragraph 54(1)(a)
117. This item extends the
Commissioner's or inspector's powers to examine the books of supervised bodies
corporate.
Item 67 - Subsection 54(3) (including the
penalty)
118. This item repeals subsection 54(3) and the
penalty.
Item 68 - Subsection 56(1) (penalty)
119. This item
repeals the existing penalty, and imposes a new penalty. It also adds a note
which makes it clear that the Crimes Act 1914 applies to the section.
Subsection 4B(2) of that Act allows a court to impose a monetary penalty instead
of, or in addition to, a term of imprisonment. Subsection 4B(3) of that Act
allows a court to impose on a body corporate a fine up to five times the maximum
fine that could be imposed on an individual.
Item 69 - Paragraph
60(2)(b)
120. This item provides that where an investigation is being
conducted into the affairs of an associated body corporate a report of the
Commissioner or inspector under section 60 must take into account the effect of
the association on the ability of the insurer to meet its
liabilities.
Item 70 - Subparagraph 60(2)(c)(i)
121. This item is
a consequential amendment which makes it clear that a reference to a body
corporate in that paragraph includes only a reference to an authorised
insurer.
Item 71 - At the end of subparagraph
60(2)(c)(ii)
122. This item brings the provision into line with current
drafting practice.
Item 72 - Subparagraph 60(2)(c)(iv)
123. This
item allows the Commissioner or inspector to make recommendations in a report
under subsection 60(2) on both an authorised insurer and associated bodies
corporate.
Item 73 - Subsection 61(1) (penalty)
124. This item
repeals the existing penalty, and imposes a new penalty. It also adds a note
which makes it clear that the Crimes Act 1914 applies to the section.
Subsection 4B(2) of that Act allows a court to impose a monetary penalty instead
of, or in addition to, a term of imprisonment. Subsection 4B(3) of that Act
allows a court to impose on a body corporate a fine up to five times the maximum
fine that could be imposed on an individual.
Item 74 - Subsection
61(2)
125. This item amends subsection 61(2) to replace existing language
with gender inclusive language.
Item 75 - Subsection
62(1)
126. This item is a consequential amendment that clarifies that a
reference to a body corporate in subsection 62(1) includes only a reference to
an authorised insurer.
Item 76 - After subsection 62(1)
127. This
item inserts a new subsection 62(1A) which extends the power of the Commissioner
to make directions to connected bodies corporate as defined in Part IVA. It
also inserts a new subsection 62(1B) that provides that the Commissioner can
only give a direction under subsection (1) or (1A) with the Treasurer's
agreement. Prior to the amendment, directions made by the Commissioner to
insurance companies were reviewable by the Administrative Appeals
Tribunal.
Item 77 - Subsection 62(2)
128. This item makes the
Commissioner's decision to publish a notice of directions in the Gazette subject
to the Treasurer's agreement. Prior to the amendment, such a decision was
reviewable by the Administrative Appeals Tribunal.
Item 78 - Subsection
62(3)
129. This item provides that subsection 62(3) does not apply to a
decision made within five years after the commencement of this subsection. The
effect of this is that a decision by the Commissioner under subsection 62(2)
will not, for a period of five years, be reviewable by the Administrative
Appeals Tribunal (AAT). This process will remove the risk of insurers using AAT
appeal processes to effectively 'stay' the Commissioner's directions, given the
potential for ensuing time delays to jeopardise policy holder interests. The
new process will be in place for five years to ensure its efficacy is
reviewed.
Item 79 - Subsection 62(5)
130. This item is a
consequential amendment which extends the scope of subsection 62(5) to apply to
decisions made in relation to connected bodies corporate.
Item 80 - At
the end of subsection 62(6)
131. This item is a consequential amendment
which extends the scope of subsection 62(6) as to validity of transactions, to
transactions entered into by connected bodies corporate.
Item 81 -
Subsection 62(7)
132. This item provides that a decision of the
Commissioner to unilaterally revoke or vary a direction under section 62 may
only be made with the Treasurer's agreement. Prior to the amendment, decisions
by the Commissioner in relation to revocation or variation of directions were
subject to review by the Administrative Appeals Tribunal.
Item 82 -
Paragraph 62(7A)(a)
133. This item provides that a decision of the
Commissioner to revoke or vary a direction under section 62 at the request of a
body corporate may only be made with the Treasurer's agreement. Similarly, the
Commissioner may only refuse to revoke or vary a direction under section 62 at
the request of a body corporate with the Treasurer's agreement. Prior to the
amendment, decisions by the Commissioner in relation to revocation or variation
of directions at the request of a body corporate were subject to review by the
Administrative Appeals Tribunal.
Item 83 - Subsection
62(9)
134. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 84 - Subsection 62(10)
135. This
item clarifies the offence and updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 85 - Section 64
136. This item
replaces existing language with gender inclusive language.
Item 86 -
Section 98
137. This item replaces existing language with gender
inclusive language.
Item 87 - Paragraph 100(a)
138. This item
replaces existing language with gender inclusive language.
Item 88 -
Subsection 105(15) (penalty)
139. This item updates the penalty from a
monetary penalty to penalty units in accordance with section 4AA of the Crimes
Act 1914. The amendment is consistent with Government policy to standardise all
penalties in Commonwealth legislation.
Item 89 - Subsection
106(2)
140. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 90 - Section 106
141. This item
omits the penalty consistent with Schedule 9 which repeals the Insurance
(Deposits) Act 1932.
Item 91 - Subsection 109(3)
142. This item
updates the penalty from a monetary penalty to penalty units in accordance with
section 4AA of the Crimes Act 1914. The amendment is consistent with Government
policy to standardise all penalties in Commonwealth legislation.
Item 92
- Before Section 114
143. This item makes it an offence for an insurer
not to be party to an approved code of practice. This requirement only applies
to insurers that write classes of general insurance business as prescribed under
the regulations.
Item 93 - Subsection 115(1)
144. This item allows
the Commissioner (or an authorised delegate) to require the production of any
books, required to be kept under the Principal Act, from both an authorised
insurer and a connected body corporate for the purpose of determining whether
the authorised insurer or a connected body corporate has complied with the
provisions of the Principal Act.
Item 94 - Subsection
115(2)
145. This item allows the Commissioner (or an authorised delegate)
to require the production of any books from both an insurer and connected bodies
corporate for the purpose of determining whether the insurer should be
authorised for the purposes of the Principal Act.
Item 95 - Subsection
115(5) (including the penalty)
146. This item repeals the subsection and
penalty consistent with the introduction of a new penalty.
Item 96 - At
the end of section 115
147. This item imposes a new penalty. It also
adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine up to five times
the maximum fine that could be imposed on an individual.
Item 97 -
Subsection 115A(1)
148. This item allows the Commissioner (or an
authorised delegate) to enter the premises of both an authorised insurer and
connected bodies corporate for the purpose of determining whether the authorised
insurer or a connected body corporate has complied with the provisions of the
Principal Act.
Item 98 - Paragraph 115A(2)(a)
149. This item
allows the Commissioner (or an authorised delegate) to apply for a search
warrant to enter the premises of both an authorised insurer and connected bodies
corporate for the purpose of determining whether the authorised insurer or a
connected body corporate has complied with the provisions of the Principal
Act.
Item 99 - Subsection 115A(5) (including the
penalty)
150. This item repeals the subsection and penalty. This brings
the Principal Act into line with current Commonwealth criminal law
policy.
Item 100 - Subsection 116(1)
151. This item requires the
Commissioner to publish a notice in the Gazette stating that because of the
commencement of winding up of a body, that body is no longer permitted to carry
on insurance business. This removes an anomaly in the Principal Act where,
prior to the amendment, the Commissioner was required to publish a notice in the
Gazette stating that a body was now authorised to carry on insurance business,
but no such Gazettal was required upon winding up of a body.
Item 101 -
Subsection 116(3)
152. This item requires a supervised body corporate
which is winding up to discharge its liabilities within Australia in priority to
any liabilities outside of Australia.
Item 102 - Subsection
117(1)
153. This item requires a connected body corporate to have at all
times an address in Australia for the purposes of the Principal Act.
Item
103 - Subsections 117A(2), (3) and (4)
154. This item extends the
prohibition of disqualified persons from acting as a director or local executive
officer of authorised insurers to include connected bodies
corporate.
Item 104 - Subsection 117A(8) (paragraph (a) of the definition
of local executive officer)
155. This item extends the requirement for
foreign bodies corporate authorised to carry on insurance business in Australia
to have a resident of Australia as its executive officer to include connected
bodies corporate as defined by Part IVA of the Principal Act.
Item 105 -
Subsection 118(1)
156. This item extends the requirement for foreign
bodies corporate authorised to carry on insurance business in Australia to have
a resident of Australia as its agent to include connected bodies corporate as
defined by Part IVA of the Principal Act.
Item 106 - Subsection
119(1)
157. This item extends the requirement for foreign bodies
corporate authorised to carry on insurance business in Australia to have as its
banker, a bank within the meaning of the Banking Act 1959 or a bank constituted
by a law of a State to include connected bodies corporate as defined by Part IVA
of the Principal Act.
Item 107 - Section 120
158. This item
replaces existing language with gender inclusive language.
Item 108 -
Section 126
159. This item repeals the secrecy provision and inserts a
replacement. The changes bring the Principal Act broadly into line with secrecy
provisions in the Life Insurance Act 1995. This will give the Commissioner
discretionary power to disclose protected information, including, where
appropriate, directly to the Reserve Bank of Australia, the Australian
Securities Commission and the Australian Financial Institutions Commission,
without prior Ministerial consent. In addition, all secrecy provisions will be
amended to permit disclosure of information to any overseas financial sector
supervisory agency listed in regulations, and to ensure that exchanged
information carries with it the protection and confidentiality afforded to it by
the collecting agency. The Treasurer will also be given authority to permit
disclosure of information to overseas financial sector supervisory agencies not
listed in regulations, where such disclosure is appropriate. The replacement
section provides that the definitions of financial sector supervisory agency,
law enforcement agency and overseas financial sector supervisory agency are
taken to be repealed at the end of five years of the date of the Royal Assent.
This clause is consistent with Government policy requiring the review of all new
legislation.
Item 109 - At the end of section 127
160. This item
permits the Commissioner to charge a fee for the supply of statistical
information and allows the Commissioner to publish and disseminate aggregated
statistical information.
Item 110 - Subsection 128(1)
161. This
item updates the offences for the breach of specific provisions of the Principal
Act.
Item 111 - Paragraph 128(1)(a)
162. This item updates the
offences for the breach of specific provisions of the Principal Act.
Item
112 - Paragraph 128(1)(a)
163. This item updates the penalty from a
monetary penalty to penalty units in accordance with section 4AA of the Crimes
Act 1914. The amendment is consistent with Government policy to standardise all
penalties in Commonwealth legislation.
Item 113 - Paragraph
128(1)(b)
164. This item updates the offences for the breach of specific
provisions of the Principal Act.
Item 114 - Paragraph
128(1)(b)
165. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 115 - Subsection 128(2)
(penalty)
166. This item repeals the penalty and substitutes a new
penalty. It also adds a note which makes it clear that the Crimes Act 1914
applies to the section. Subsection 4B(2) of that Act allows a court to impose a
monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
up to five times the maximum fine that could be imposed on an
individual.
Item 116 - Section 129B
167. This item repeals the
section. This brings the Principal Act into line with current Commonwealth
criminal law policy.
Item 117 - Section 130
168. This item is a
consequential amendment to take into account the possibility that forms may, in
addition to being prescribed by regulation, be determined by the Commissioner
under section 44.
Item 118 - Paragraph 132(b)
169. This item
removes the power of the Governor General to make regulations prescribing forms
for the purposes of Part IV of the Principal Act. This is consistent with other
amendments providing for the Commissioner to determine forms for the purposes of
Part IV of the Principal Act.
Item 119 - Paragraph
132(f)
170. This item updates the penalty from a monetary penalty to
penalty units in accordance with section 4AA of the Crimes Act 1914. The
amendment is consistent with Government policy to standardise all penalties in
Commonwealth legislation.
Item 120 - The whole of the
Act
171. This item replaces existing language with gender inclusive
language.
Item 121 - The whole of the Act
172. This item replaces
existing language with gender inclusive language.
Item 122 - The
whole of the Act
173. This item replaces existing language with gender
inclusive language.
Item 123 - Application
174. This item sets out
when amendments made by items 120, 121 and 122 take effect to ensure
continuity.
SCHEDULE 6
AMENDMENT OF THE INSURANCE ACQUISITIONS AND
TAKEOVERS ACT 1991
Item 1 - Section 24
175. This item omits the
monetary penalty which brings the Principal Act into line with current
Commonwealth criminal law policy. Prior to the amendment, this section provided
explicitly for a term of imprisonment and a monetary penalty.
Item 2 - At
the end of section 24
176. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 3 - Section 26
177. This item omits
the monetary penalty which brings the Principal Act into line with current
Commonwealth criminal law policy. Prior to the amendment, this section provided
explicitly for a term of imprisonment and a monetary penalty.
Item 4 - At
the end of section 26
178. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 5 - Subsection 27(3)
179. This item
omits the monetary penalty which brings the Principal Act into line with current
Commonwealth criminal law policy. Prior to the amendment, this section provided
explicitly for a term of imprisonment and a monetary penalty.
Item 6 -
After subsection 27(3)
180. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 7 - Section 31
181. This item
omits the monetary penalty which brings the Principal Act into line with current
Commonwealth criminal law policy. Prior to the amendment, this section provided
explicitly for a term of imprisonment and a monetary penalty.
Item 8 - At
the end of section 31
182. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 9 - Section 38
183. This item omits
the monetary penalty which brings the Principal Act into line with current
Commonwealth criminal law policy. Prior to the amendment, this section provided
explicitly for a term of imprisonment and a monetary penalty.
Item 10 -
At the end of section 38
184. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 11 - Section 40
185. This item
omits the monetary penalty which brings the Principal Act into line with current
Commonwealth criminal law policy. Prior to the amendment, this section provided
explicitly for a term of imprisonment and a monetary penalty.
Item 12 -
At the end of section 40
186. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 13 - Subsection 41(3)
187. This
item omits the monetary penalty which brings the Principal Act into line with
current Commonwealth criminal law policy. Prior to the amendment, this section
provided explicitly for a term of imprisonment and a monetary
penalty.
Item 14 - At the end of subsection 41(3)
188. This item
adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 15 -
Section 45
189. This item omits the monetary penalty which brings the
Principal Act into line with current Commonwealth criminal law policy. Prior to
the amendment, this section provided explicitly for a term of imprisonment and a
monetary penalty.
Item 16 - At the end of section 45
190. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 17 -
Section 52
191. This item omits the monetary penalty which brings the
Principal Act into line with current Commonwealth criminal law policy. Prior to
the amendment, this section provided explicitly for a term of imprisonment and a
monetary penalty.
Item 18 - At the end of section 52
192. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 19 -
Section 54
193. This item omits the monetary penalty which brings the
Principal Act into line with current Commonwealth criminal law policy. Prior to
the amendment, this section provided explicitly for a term of imprisonment and a
monetary penalty.
Item 20 - At the end of section 54
194. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 21 -
Subsection 55(3)
195. This item omits the monetary penalty which brings
the Principal Act into line with current Commonwealth criminal law policy.
Prior to the amendment, this section provided explicitly for a term of
imprisonment and a monetary penalty.
Item 22 - At the end of subsection
55(3)
196. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 23 - Section 59
197. This item omits the monetary
penalty which brings the Principal Act into line with current Commonwealth
criminal law policy. Prior to the amendment, this section provided explicitly
for a term of imprisonment and a monetary penalty.
Item 24 - At the end
of section 59
198. This item adds a note which makes it clear that the
Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act allows a
court to impose a monetary penalty instead of, or in addition to, a term of
imprisonment. Subsection 4B(3) of that Act allows a court to impose on a body
corporate a fine of up to five times the maximum fine that could be imposed on
an individual.
Item 25 - At the end of subsection 73(5)
199. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 26 -
At the end of subsection 73(6)
200. This item adds a note which makes it
clear that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that
Act allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 27 - At the end of subsection
73(7)
201. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 28 - At the end of subsection 74(1)
202. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 29 -
Section 75
203. This item repeals the secrecy provision and inserts a
replacement. The changes bring the Principal Act broadly into line with secrecy
provisions in the Life Insurance Act 1995. This will give the Commissioner
discretionary power to disclose protected information, including, where
appropriate, directly to the Reserve Bank of Australia, the Australian
Securities Commission and the Australian Financial Institutions Commission,
without prior Ministerial consent. In addition, all secrecy provisions will be
amended to permit disclosure of information to any overseas financial sector
supervisory agency listed in regulations, and to ensure that exchanged
information carries with it the protection and confidentiality afforded to it by
the collecting agency. The Treasurer will also be given authority to permit
disclosure of information to overseas financial sector supervisory agencies not
listed in regulations, where such disclosure is appropriate. The replacement
section provides that the definitions of financial sector supervisory agency,
law enforcement agency and overseas financial sector supervisory agency are
taken to be repealed at the end of five years of the date of the Royal Assent.
This clause is consistent with Government policy requiring the review of all new
legislation.
SCHEDULE 7
AMENDMENT OF THE INSURANCE (AGENTS AND
BROKERS) ACT 1984
Item 1 - Section 9 (paragraph (a) of the definition of
class of insurance business)
204. This item removes an ambiguity by
making the definition of class of insurance business include deemed life
insurance business. The Principal Act imposes joint and several liability upon
insurers who authorised an agent to act in respect of a particular class of
business insurance. 'Life insurance' is defined as a class of insurance
business for the purposes of the Principal Act. Prior to the amendment, there
was some doubt as to whether business deemed to be life insurance for the
purposes of life insurance legislation was included within the definition of a
class of business insurance. The amendment makes it clear that deemed life
insurance is included within the definition.
Item 2 - Section 9
(definition of insolvent under administration)
205. This item brings the
definition of insolvent under administration into line with the latest version
of that expression as contained in the Superannuation Industry (Supervision) Act
1993.
Item 3 - Subsection 10(1)
206. This item replaces existing
language with gender inclusive language.
Item 4 - Subsection
10(2)
207. This item replaces existing language with gender inclusive
language.
Item 5 - Subsection 10(2A)
208. This item replaces
existing language with gender inclusive language.
Item 6 - Subsection
10(3)
209. This item replaces existing language with gender inclusive
language.
Item 7 - Subsection 10(4)
210. This item replaces
existing language with gender inclusive language.
Item 8 - Subsection
10(4)
211. This item replaces existing language with gender inclusive
language.
Item 9 - Subsection (10)4
212. This item replaces
existing language with gender inclusive language.
Item 10 - Subsection
10(5)
213. This item replaces existing language with gender inclusive
language.
Item 11 - At the end of section 10
214. This item adds a
note which makes it clear that the Crimes Act 1914 applies to the section.
Subsection 4B(2) of that Act allows a court to impose a monetary penalty instead
of, or in addition to, a term of imprisonment. Subsection 4B(3) of that Act
allows a court to impose on a body corporate a fine of up to five times the
maximum fine that could be imposed on an individual.
Item 12 - After
subsection 11(1J)
215. This item clarifies the responsibility of insurers
for the conduct of multi-agents by making them liable for a multi-agent's
conduct. The Insurance Laws Amendment Act 1994 amended the Principal Act with
the intention of clarifying the responsibility of insurers for the conduct of
multi-agents. It has become apparent that that amendment may have caused
unforeseen problems for insurers and insureds which could have complicated and
delayed the resolution of claims. This amendment resolves this problem by
making liable for a multi-agent's conduct, any insurer that issues a policy as a
result of, or related to, conduct of a multi-agent, by deeming the conduct to
have been authorised by the issuing insurer.
Item 13 - At the end of
section 13
216. This item adds a note which makes it clear that the
Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act allows a
court to impose a monetary penalty instead of, or in addition to, a term of
imprisonment. Subsection 4B(3) of that Act allows a court to impose on a body
corporate a fine of up to five times the maximum fine that could be imposed on
an individual.
Item 14 - Section 15
217. This item replaces
existing language with gender inclusive language.
Item 15 - Subsection
16(1) (other than the penalty)
218. This item replaces existing language
with gender inclusive language.
Item 16 - Subsection 17(1) (other than
the penalty)
219. This item replaces existing language with gender
inclusive language.
Item 17 - Subsection 18(2)
220. This item
replaces existing language with gender inclusive language.
Item 18 -
Subsection 18(2)
221. This item replaces existing language with gender
inclusive language.
Item 19 - Paragraph 19(1)(a)
222. This item
replaces existing language with gender inclusive language.
Item 20 - At
the end of subsection 19(1)
223. This item and item 22 make it a
condition of registration as a broker that a broker be a party to an approved
complaints arrangement. This requirement only applies to brokers that write
classes of general insurance business that, under the regulations, are deemed
domestic or personal business. In addition, this item adds a note which makes
it clear that the Crimes Act 1914 applies to the section. Subsection 4B(2) of
that Act allows a court to impose a monetary penalty instead of, or in addition
to, a term of imprisonment. Subsection 4B(3) of that Act allows a court to
impose on a body corporate a fine of up to five times the maximum fine that
could be imposed on an individual.
Item 21 - At the end of section
20
224. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 22 - After paragraph 21(1)(b)
225. This item and
item 20 make it a condition of registration as a broker that a broker be a party
to an approved complaints arrangement. This requirement only applies to brokers
that write classes of general insurance business that, under the regulations,
are deemed domestic or personal business.
Item 23 - After paragraph
21(1A)(d)
226. This item makes it a condition of renewal of registration
as a broker that a broker be a party to an approved complaints arrangement.
This requirement only applies to brokers that write classes of general insurance
business that, under the regulations, are deemed domestic or personal
business.
Item 24 - Subsection 21(6)
227. This item removes a
drafting error. Section 17 of the Insurance Laws Amendment Act 1994 amended
this provision regarding the registration of brokers. It has become apparent
that there was a drafting error in paragraph 17(d) of the Insurance Laws
Amendment Act 1994, where 'request' has been used instead of 'requirement'
making the section ambiguous.
Item 25 - Paragraph 23(d)
228. This
item removes a drafting error. Section 17 of the Insurance Laws Amendment Act
1994 amended section 21 of the Principal Act by, in part, replacing subsection
21(1) and 21(2) of the Principal Act. This item removes a cross reference to
paragraph 21(1)(aa), which was replaced by the above amendments, and
consequently no longer exists.
Item 26 - Paragraph
24(2)(a)
229. This item replaces existing language with gender inclusive
language.
Item 27 - Subsection 24(4)
230. This item replaces
existing language with gender inclusive language.
Item 28 - After
subsection 25(1A)
231. This item makes a broker's failure to be party to
an approved complaints mechanism a ground for suspension or cancellation of
registration. Participation in an approved complaints scheme is a condition
precedent to registration and renewal of a broker under the Principal Act. This
amendment allows the Commissioner to take action against a broker for non
participation.
Item 29 - Subsection 25(3)
232. This item replaces
existing language with gender inclusive language.
Item 30 - Subsection
25(3)
233. This item replaces existing language with gender inclusive
language.
Item 31 - Subsection 25(4)
234. This item replaces
existing language with gender inclusive language.
Item 32 - At the end of
subsection 25(4)
235. This item adds a note which makes it clear that the
Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act allows a
court to impose a monetary penalty instead of, or in addition to, a term of
imprisonment. Subsection 4B(3) of that Act allows a court to impose on a body
corporate a fine of up to five times the maximum fine that could be imposed on
an individual.
Item 33 - Subsection 25(5)
236. This item replaces
existing language with gender inclusive language.
Item 34 - Subsection
25(6)
237. This item replaces existing language with gender inclusive
language.
Item 35 - Subsection 25(6)
238. This item replaces
existing language with gender inclusive language.
Item 36 - Subsection
25(7)
239. This item replaces existing language with gender inclusive
language.
Item 37 - Subsections 26(1) and (3)
240. This item
replaces existing language with gender inclusive language.
Item 38 -
Paragraph 26(3)(a)
241. This item replaces existing language with gender
inclusive language.
Item 39 - Subsections 26(4) and (5)
242. This
item replaces existing language with gender inclusive language.
Item 40 -
Subsections 26(7) and (8)
243. This item replaces existing language with
gender inclusive language.
Item 41 - At the end of section
26
244. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 42 - Paragraph 27(2)(b)
245. This item replaces
existing language with gender inclusive language.
Item 43 - Subsection
27(3)
246. This item replaces existing language with gender inclusive
language.
Item 44 - Subsection 27(4)
247. This item replaces
existing language with gender inclusive language.
Item 45 - Subsection
27(5)
248. This item replaces existing language with gender inclusive
language.
Item 46 - At the end of subsection 27(12)
249. This item
adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 47 -
Paragraph 29(5)(a)
250. This item replaces existing language with gender
inclusive language.
Item 48 - At the end of section 29
251. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 49 -
Subsections 30(1) and (2)
252. This item replaces existing language with
gender inclusive language.
Item 50 - At the end of section
30
253. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 51 - Section 31
254. This item replaces existing
language with gender inclusive language.
Item 52 - At the end of
subsection 31B(1)
255. This item adds a note which makes it clear that
the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act allows
a court to impose a monetary penalty instead of, or in addition to, a term of
imprisonment. Subsection 4B(3) of that Act allows a court to impose on a body
corporate a fine of up to five times the maximum fine that could be imposed on
an individual.
Item 53 - At the end of section 31C
256. This item
adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 54 -
At the end of subsection 31H(4)
257. This item adds a note which makes it
clear that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that
Act allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 55 - Paragraphs 32(1)(a) and
(b)
258. This item replaces existing language with gender inclusive
language.
Item 56 - Subsections 32(1), (2) and (5)
259. This item
replaces existing language with gender inclusive language.
Item 57 -
Subsection 33(2)
260. This item replaces existing language with gender
inclusive language.
Item 58 - Paragraph 33(3)(a)
261. This item
replaces existing language with gender inclusive language.
Item 59 -
Paragraph 33(3)(b)
262. This item replaces existing language with gender
inclusive language.
Item 60 - At the end of section 33
263. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 61 -
At the end of subsection 34(1)
264. This item adds a note which makes it
clear that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that
Act allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 62 - At the end of subsection
34A(9)
265. This item adds a note which makes it clear that the Crimes
Act 1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 63 - At the end of section 34P
266. This item
adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item 64 -
At the end of section 34S
267. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 65 - At the end of section
34T
268. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 66 - Section 34U
269. This item repeals the
secrecy provision and inserts a replacement. The changes bring the Principal
Act broadly into line with secrecy provisions in the Life Insurance Act 1995.
This will give the Commissioner discretionary power to disclose protected
information, including, where appropriate, directly to the Reserve Bank of
Australia, the Australian Securities Commission and the Australian Financial
Institutions Commission, without prior Ministerial consent. In addition, all
secrecy provisions will be amended to permit disclosure of information to any
overseas financial sector supervisory agency listed in regulations, and to
ensure that exchanged information carries with it the protection and
confidentiality afforded to it by the collecting agency. The Treasurer will
also be given authority to permit disclosure of information to overseas
financial sector supervisory agencies not listed in regulations, where such
disclosure is appropriate. The replacement section provides that the
definitions of financial sector supervisory agency, law enforcement agency and
overseas financial sector supervisory agency are taken to be repealed at the end
of five years of the date of the Royal Assent. This clause is consistent with
Government policy requiring the review of all new legislation.
Item 67 -
At the end of section 35
270. This item adds a note which makes it clear
that the Crimes Act 1914 applies to the section. Subsection 4B(2) of that Act
allows a court to impose a monetary penalty instead of, or in addition to, a
term of imprisonment. Subsection 4B(3) of that Act allows a court to impose on
a body corporate a fine of up to five times the maximum fine that could be
imposed on an individual.
Item 68 - At the end of section
37
271. This item adds a note which makes it clear that the Crimes Act
1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 69 - Paragraph 38(1)(d)
272. This item replaces
existing language with gender inclusive language.
Item 70 - Subsections
39(1) and (2)
273. This item replaces existing language with gender
inclusive language.
Item 71 - At the end of section 39
274. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment. Subsection 4B(3)
of that Act allows a court to impose on a body corporate a fine of up to five
times the maximum fine that could be imposed on an individual.
Item
72 - Section 45
275. This item replaces existing language with gender
inclusive language.
Item 73 - Paragraph 45(d)
276. This item
replaces existing language with gender inclusive language.
Item 74 -
Section 47
277. This item repeals section 47 and inserts a new section 47
which states that the Commissioner's powers may be delegated, and the means for
delegating these powers. This is a simplification of section 47 which brings
the Principal Act into line with current drafting techniques and the
Commonwealth's administrative law policy.
Item 75 -
Saving
278. This item states that a delegation in force under section 47
of the Principal Act immediately before the commencement of in item 74 remains
in force as if it has been given under the new provision.
SCHEDULE
8
AMENDMENT OF THE INSURANCE CONTRACTS ACT 1984
Item 1 -
Subsection 9(3)
279. This item lists the sections of the Principal Act
that do not apply in relation to contracts and proposed contracts of insurance
against the risk of the loss of an aircraft, or damage to the hull of an
aircraft, as a result of war. The clarified exemption will bring small scale
commercial operations within the scope of the Principal Act while continuing the
exemption for Australian aircraft operators requiring aviation hull and
liability insurance policies covering all risks and war risks which are
reinsured offshore. Reinsurance would not be available if such polices were
required to comply with the Principal Act.
Item 2 - Paragraph
11(10)(a)
280. This item, together with item 3, ensures that consumer
credit insurance disclosure documentation is only given on the entering into of
the initial contract, and not at renewal, extension, or reinstatement of a
contract. The amendment brings the provision of notices regarding consumer
credit insurance into line with similar requirements for other classes of
insurance under the Principal Act.
Item 3 - Paragraph
11(10)(c)
281. This item, together with item 2, ensures that consumer
credit insurance disclosure documentation is only given on the entering into of
the initial contract, and not at renewal, extension, or reinstatement of a
contract. The amendment brings the provision of notices regarding consumer
credit insurance into line with similar requirements for other classes of
insurance under the Principal Act.
Item 4 - Section 11F
282. This
item repeals the secrecy provision and inserts a replacement. The changes bring
the Principal Act broadly into line with secrecy provisions in the Life
Insurance Act 1995. This will give the Commissioner discretionary power to
disclose protected information, including, where appropriate, directly to the
Reserve Bank of Australia, the Australian Securities Commission and the
Australian Financial Institutions Commission, without prior Ministerial consent.
In addition, all secrecy provisions will be amended to permit disclosure of
information to any overseas financial sector supervisory agency listed in
regulations, and to ensure that exchanged information carries with it the
protection and confidentiality afforded to it by the collecting agency. The
Treasurer will also be given authority to permit disclosure of information to
overseas financial sector supervisory agencies not listed in regulations, where
such disclosure is appropriate. The replacement section provides that the
definitions of financial sector supervisory agency, law enforcement agency and
overseas financial sector supervisory agency are taken to be repealed at the end
of five years of the date of the Royal Assent. This clause is consistent with
Government policy requiring the review of all new legislation.
Item 5 -
Paragraph 21(2)(c)
283. This item replaces existing language with gender
inclusive language.
Item 6 - Subsection 26(1)
284. This item
replaces existing language with gender inclusive language.
Item 7 -
Section 27
285. This item replaces existing language with gender
inclusive language.
Item 8 - Subsection 28(3)
286. This item
replaces existing language with gender inclusive language.
Item 9 -
Subsection 29(4)
287. This item replaces existing language with gender
inclusive language.
Item 10 - Subsection 35(2)
288. This item
replaces existing language with gender inclusive language.
Item 11 -
Paragraph 41(1)(a)
289. This item replaces existing language with gender
inclusive language.
Item 12 - Subsection 41(2)
290. This item
replaces existing language with gender inclusive language.
Item 13 -
Paragraph 41(2)(b)
291. This item replaces existing language with gender
inclusive language.
Item 14 - At the end of subsection
44(1)
292. This item amends the section so that an insurer may not rely
on an average provision included in a contract of general insurance unless,
before the contract was entered into, the insurer clearly informed the insured
in writing of the nature and effect of the provision, including whether the
provision is based on indemnity or on replacement value of the property that is
the subject matter of the contract. That is, the method of valuation on which
the insurance cover is based must be brought to the notice of the insured by the
insurer.
Item 15 - Subsection 44(4)
293. This item amends the
definition of value under subsection 44(4), so that it refers to the indemnity
value, or reinstatement or replacement value, as appropriate, depending on
whether the type of policy involved is an indemnity policy or a reinstatement or
replacement policy. Prior to this amendment, the meaning of the value of the
property, as it applied to contracts of insurance was ambiguous.
Item 16
- Subsection 46(2)
294. This item replaces existing language with gender
inclusive language.
Item 17 - Subsection 47(2)
295. This item
replaces existing language with gender inclusive language.
Item 18 -
Subsections 48(1) and (2)
296. This item replaces existing language with
gender inclusive language.
Item 19 - Subsections 48(1) and
(2)
297. This item replaces existing language with gender inclusive
language.
Item 20 - Subsection 48(3)
298. This item replaces
existing language with gender inclusive language.
Item 21 - Paragraph
49(3)(a)
299. This item replaces existing language with gender inclusive
language.
Item 22 - Paragraph 49(3)(b)
300. This item replaces
existing language with gender inclusive language.
Item 23 - Paragraph
51(2)(b)
301. This item replaces existing language with gender inclusive
language.
Item 24 - Subsection 54(1)
302. This item replaces
existing language with gender inclusive language.
Item 25 -
Subsection 57(3)
303. This item will provide scope for the rate of
interest on payments unnecessarily delayed to be linked to market rates, where
regular changes to the rate set under the regulation would be inappropriate.
The rate of interest paid on unreasonably withheld claims is currently set by
regulation at 13 per cent.
Item 26 - Subsection 58(2)
304. This
item replaces existing language with gender inclusive language.
Item 27 -
Subparagraph 58(3)(d)(ii)
305. This item clarifies the intention of the
subparagraph. Where an insurer has failed to provide notice of expiry of a
contract, but a replacement contract is arranged with the same insurer, no
statutory cover is available. Prior to the amendment the subparagraph had the
effect of bringing a statutory contract into being even though an insured
obtained a replacement cover with his or her original insurer raising the
possibility that two concurrent contracts could exist.
Item 28 -
Paragraph 58(4)(b)
306. This item together with item 29 will enable an
insurer, in the event of a total loss on an automatically renewed policy, to
receive the premium for the full term of the policy (that is, the insurer would
be entitled to receive full premium payable as if the contract had been renewed
in the normal way, and not a proportional amount that is currently
possible).
Item 29 - After subsection 58(4)
307. This item
together with item 28 will enable an insurer, in the event of a total loss on an
automatically renewed policy, to receive the premium for the full term of the
policy (that is, the insurer would be entitled to receive full premium payable
as if the contract had been renewed in the normal way, and not a proportional
amount that is currently possible).
Item 30 - Subparagraph
59(2)(b)(i)
308. This item clarifies when a notice of cancellation under
section 59 is to take effect.
Item 31 - After subsection
59(2)
309. This item, which inserts a definition of applicable business
day, clarifies when a notice of cancellation under section 59 is to take effect.
Where a policy has been automatically renewed by the failure of the insurer to
provide a notice of expiry of the contract, the insurer would have to give 14
days notice (previously a minimum of 3 days required) to cancel that policy.
This amendment will bring the notification period into line with the requirement
that insurers must give fourteen days notice as to whether or not they are
prepared to renew an insurance contract.
Item 32 - Subsection
64(1)
310. This item replaces existing language with gender inclusive
language.
Item 33 - Subsection 64(2)
311. This item replaces
existing language with gender inclusive language.
Item 34 - Subsection
64(4)
312. This item replaces existing language with gender inclusive
language.
Item 35 - Paragraph 65(2)(a)
313. This item replaces
existing language with gender inclusive language.
Item 36 - Subsections
65(3)
314. This item replaces existing language with gender inclusive
language.
Item 37 - Subsection 65(4)
315. This item replaces
existing language with gender inclusive language.
Item 38 - Subsection
65(5)
316. This item replaces existing language with gender inclusive
language.
Item 39 - Paragraph 66(a)
317. This item replaces
existing language with gender inclusive language.
Item 40 - Subsection
68(1)
318. This item replaces existing language with gender inclusive
language.
Item 41 - Section 72
319. This item replaces existing
language with gender inclusive language.
Item 42 - Subsection
74(2)
320. This item replaces existing language with gender inclusive
language.
Item 43 - Subsection 75(1)
321. This item replaces
existing language with gender inclusive language.
Item 44 - Subsection
75(1)
322. This item replaces existing language with gender inclusive
language.
Item 45 - Subsection 76(1)
323. This item replaces
existing language with gender inclusive language.
Item 46 - Subparagraph
77(1)(b)(ii)
324. This item replaces existing language with gender
inclusive language.
Item 47 - Subsection 77(2)
325. This item
replaces existing language with gender inclusive language.
SCHEDULE
9
REPEAL OF THE INSURANCE (DEPOSITS) ACT 1932
Item 1 - The whole
of the Act
326. This item repeals the Insurance (Deposits) Act 1932. The
Principal Act has been replaced by the Insurance Act 1973. The Principal Act
was retained initially for transitional reasons and then subsequently to ensure
policy holder entitlements held in the General Insurance Trust Account were
maintained. Attempts to return all money within the General Insurance Trust
Account to policy holders has reached an impasse. Outstanding unclaimed monies
held under the Principal Act have now been transferred into Consolidated Revenue
and the General Insurance Trust Account closed. The right of policyholders to
claim their entitlements is still preserved. The repeal of the Principal Act
will reduce the administrative burden on the Insurance and Superannuation
Commission.
SCHEDULE 10
AMENDMENT OF THE INSURANCE LAWS
AMENDMENT ACT 1994
Item 1 - Schedule (item 24)
327. This item
repeals the amendment and substitutes a new penalty that is consistent with
current Commonwealth criminal law policy.
SCHEDULE
11
AMENDMENT OF THE INSURANCE SUPERVISORY LEVIES COLLECTION ACT
1989
Item 1 - After section 5
328. This item inserts a new
subsection 5A which extends the application of the Principal Act to bodies
corporate which have ceased to be authorised under the Insurance Act 1973 to
carry on an insurance business or have ceased to be registered under the Life
Insurance Act 1995 to carry on a life insurance business. The effect of this
amendment is to allow the Commissioner to collect a pro-rata supervisory levy.
Due to a drafting oversight at the time the Principal Act was originally
promulgated, the Insurance and Superannuation Commission is not entitled to
collect a pro-rata supervisory levy when an authorised insurer goes into
liquidation, or its authority lapses at its own request.
Item 2 -
Paragraph 7(1)(a)
329. This item specifies when a levy is due for payment
by a body corporate which has ceased to be authorised under the Insurance Act
1973 to carry on an insurance business.
Item 3 - After subsection
7(3A)
330. This item inserts a new subsection 7(3B) which specifies when
a levy is due for payment by a life company that has ceased to be registered
under the Life Insurance Act 1995 to carry on life insurance
business.
Item 4 - After section 8
331. This item allows the
Commissioner a discretionary power to waive the collection of pro-rata levies
when an authorised insurer or life company goes into liquidation, or its
authority or registration lapses at its own request where the exercise of this
power would jeopardise the full settlement of claims to
policyholders.
SCHEDULE 12
AMENDMENT OF THE LIFE INSURANCE ACT
1995
Item 1 - After section 9
332. This item inserts a new
definition of continuous disability policy. This amendment is designed to
provide for policies with inherent guarantees, for periods greater than three
years, on premiums or benefits, to be recognised for their long term nature as
life insurance.
Item 2 - Subsection 38(5)
333. This item repeals
subsection 38(5) and inserts a new subsection containing a regulation making
power to define unsecured borrowing. The purpose of this amendment is to narrow
the interpretation of the term unsecured borrowing. Section 38 provides that a
life company can only apply the assets of a statutory fund for the purposes of
that fund. Subsection 38(4) restricts the amount of unsecured borrowings a
statutory fund may undertake and subsection 38(5) qualifies the scope of
unsecured borrowings as not including borrowings by means of a bank overdraft or
other prescribed arrangement.
Item 3 - Subsection 41(1)
334. This
item amends subsection 41(1) to make it subject to the new section
41A.
Item 4 - After section 41
335. This item inserts a new
section 41A which qualifies the circumstances in which a transaction which
contravenes the provisions of section 38 of the Life Insurance Act 1995 relating
to the expenditure and application of statutory fund assets would be
automatically void. The amendment protects the rights of third parties who have
acquired those rights by entering into arrangements in good faith and without
knowledge of any contravention.
336. Prior to the amendment, section 41
provided that a transaction entered into in contravention of section 38 of the
Principal Act was of no effect unless the court declared otherwise. The
amendment reverses the situation such that a transaction, if entered into in
contravention of the application or investment provisions, remains valid until
court action determines otherwise.
Item 5 - Subsection
49(1)
337. This item amends subsection 49(1) to make the Commissioner's
notice to a life company, directing the life company to remedy any contravention
of Part 4 of the Principal Act, subject to the Treasurer's agreement. Prior to
the amendment, directions given by the Commissioner to life insurance companies
in respect of their solvency and capital adequacy levels, assets and business
were reviewable by the Administrative Appeals Tribunal.
Item 6 -
Subsection 49(4)
338. This item amends subsection 49(4) to make the
Commissioner's decision to extend a period specified in a notice given under
section 49 subject to the Treasurer's agreement. Prior to the amendment,
directions given by the Commissioner to life insurance companies in respect to
their solvency and capital adequacy levels, assets and business were reviewable
by the Administrative Appeals Tribunal.
Item 7 - After subsection
62(4)
339. This item inserts a new subsection 62(4A) which requires that
the Commissioner must not refuse to give an approval under subsection 62(4)
unless the Treasurer agrees that the approval should not be given. Prior to the
amendment, directions given by the Commissioner to life insurance companies in
respect of their solvency and capital adequacy levels, assets and business were
reviewable by the Administrative Appeals Tribunal.
Item 8 - After
subsection 63(2)
340. This item inserts a new subsection 63(2A) which
requires that the Commissioner must not refuse to give an approval under
subsection 63(2) unless the Treasurer agrees that the approval should not be
given. Prior to the amendment, directions given by the Commissioner to life
insurance companies in respect to their solvency and capital adequacy levels,
assets and business were reviewable by the Administrative Appeals
Tribunal.
Item 9 - Subsection 68(1)
341. This item amends
subsection 68(1) to make the Commissioner's directions under section 68 subject
to the Treasurer's agreement. Prior to the amendment, directions given by the
Commissioner to life insurance companies in respect to their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 10 - Subsection
68(5)
342. This item amends subsection 68(5) to make the Commissioner's
decision to give a notice to revoke or vary a direction given under section 68
subject to the Treasurer's agreement. Prior to the amendment, directions given
by the Commissioner to life insurance companies in respect of their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 11 - Paragraph
68(6)(a)
343. This item amends paragraph 68(6)(a) to make the
Commissioner's decision to revoke or vary a direction subject to the Treasurer's
agreement. Prior to the amendment, directions given by the Commissioner to life
insurance companies in respect to their solvency and capital adequacy levels,
assets and business were reviewable by the Administrative Appeals
Tribunal.
Item 12 - Subsection 73(1)
344. This item amends
subsection 73(1) to make the Commissioner's directions under section 73 subject
to the Treasurer's agreement. Prior to the amendment, directions made by the
Commissioner to life insurance companies in respect of their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 13 - Subsection
73(5)
345. This item amends subsection 73(5) to make the Commissioner's
decision to revoke or vary a direction made under section 73 subject to the
Treasurer's agreement. Prior to the amendment, directions made by the
Commissioner to life insurance companies in respect of their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 14 - Paragraph
73(6)(a)
346. This item amends paragraph 73(6)(a) to make the
Commissioner's revocation or variation of the direction subject to the
Treasurer's agreement. Prior to the amendment, directions made by the
Commissioner to life insurance companies in respect to their solvency and
capital adequacy levels, their assets and their business were reviewable by the
Administrative Appeals Tribunal.
Item 15 - At the end of section
82
347. This item allows the Commissioner to require that financial
statements required under section 82 be prepared in accordance with accounting
and actuarial standards issued by the Australian Accounting Standards Board and
the Life Insurance Actuarial Standards Board.
348. Prior to the amendment
the Commissioner was precluded from making rules under section 82 which would
require financial statements to be prepared in accordance with accounting and
actuarial standards as they exist from time to time.
349. Without this
amendment, the Commissioner's rules would require frequent variation to ensure
that financial statements were prepared in accordance with the most recent
accounting and actuarial statements to provide a true and accurate indication of
a life company's financial position and avoid inconsistencies between accounting
and actuarial statements and statements prepared under section 82. This would
result in administrative complexity, uncertainty in the life insurance industry
and possibly gaps and time lapses in the application of the most up-to-date
professional standards.
Item 16 - Subsection 134(1)
350. This item
amends subsection 134(1) to make the Commissioner's directions under section 134
subject to the Treasurer's agreement. Prior to the amendment, directions given
by the Commissioner to life insurance companies in respect of their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 17 - Subsection 147(2)
(penalty)
351. This item repeals the penalty consistent with item
18.
Item 18 - At the end of section 147
352. This item adds a
penalty. It also adds a note which makes it clear that the Crimes Act 1914
applies to the section. Subsection 4B(2) of that Act allows a court to impose a
monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
up to five times the maximum fine that could be imposed on an
individual.
Item 19 - Subsection 150(1)
353. This item amends
subsection 150(1) to make the Commissioner's directions under section 150
subject to the Treasurer's agreement. Prior to the amendment, directions given
by the Commissioner to life insurance companies in respect to their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 20 - Subsection
150(5)
354. This item amends subsection 150(5) to make the Commissioner's
decision to unilaterally revoke or vary a direction made under section 150
subject to the Treasurer's agreement. Prior to the amendment, directions given
by the Commissioner to life insurance companies in respect to their solvency and
capital adequacy levels, assets and business were reviewable by the
Administrative Appeals Tribunal.
Item 21 - Paragraph
150(6)(a)
355. This items amends paragraph 150(6)(a) to make the
Commissioner's decision to, at the request of a life company, revoke or vary a
direction, or to refuse to revoke or vary a decision, subject to the Treasurer's
agreement. Prior to the amendment, directions given by the Commissioner to life
insurance companies in respect to their solvency and capital adequacy levels,
assets and business were reviewable by the Administrative Appeals
Tribunal.
Item 22 - Subsection 200(1)
356. This item, in
conjunction with other amendments, clarifies the intent of the subsection so
that there is no conflict between sections 200 and 201 of the Principal
Act.
Item 23 - Subsection 200(2)
357. This item, in conjunction
with other amendments, clarifies the intent of the subsection so that there is
no conflict between sections 200 and 201 of the Principal Act.
Item 24 -
Subsection 200(3)
358. This item, in conjunction with other amendments,
clarifies the intent of the subsection so that there is no conflict between
sections 200 and 201 of the Principal Act.
Item 25 - At the end of
section 200
359. This item inserts a new subsection (8) that clarifies
the intent of the section so that there is no conflict between sections 200 and
201 of the Principal Act. Section 200 prescribes the exclusive manner by which
a life policy may be assigned under the Principal Act. In order to assign a
policy under subsection 200(2) the memorandum of transfer must be endorsed on
the policy or annexure and signed by the transferor and transferee. The effect
of any registered assignment is that there is a conclusive presumption that the
transferee is the absolute owner, free from all trusts, rights, equities and
interests, and a life company is not required to inquire into the circumstances
of any registered assignment.
360. Prior to the amendment, paragraph
201(1)(a), when read in light of section 200, implied that where two parties
failed to make an agreement separate from the memorandum of transfer endorsed on
the policy, then this process was ineffective as a mortgage of the policy. This
had the effect of invalidating any assignment not made in accordance with the
statutory procedure.
361. The Australian courts have affirmed that, in
addition to the statutory procedures for assignment of an interest which are
outlined in section 200 of the Principal Act, a transferor may also assign their
interest in a life policy in equity. Prior to the amendments, the wording of
subsections 200(1) and 200(2) suggested that there was no right to assign an
interest in equity, and that rights may only be assigned according to statutory
procedure. By contrast, subsections 200(3) and 202(2) suggested that equitable
assignments were still possible. The effect of amendments to sections 200, 201
and 202 are to remove these inconsistencies from the Principal Act.
Item
26 - Paragraph 201(1)(a)
362. This item repeals and replaces the
paragraph, and, in conjunction with other amendments, further clarifies the
intent of the section so that there is no conflict between sections 200 and 201
of the Principal Act.
Item 27 - Subsection 202(1)
363. This item,
in conjunction with other amendments, clarifies the intent of the section so
that there is no conflict between sections 200 and 201 of the Principal
Act.
Item 28 - Subsection 202(2)
364. This item, in conjunction
with other amendments, clarifies the intent of the section so that there is no
conflict between sections 200 and 201 of the Principal Act.
Item 29 -
After subsection 202(2)
365. This item inserts a new subsection that
clarifies the circumstance where a life company is not taken, for the purposes
of subsection (2), to have received express notice in writing of a trust, right,
equity or interest. Section 200 prescribes the exclusive manner by which a life
policy may be assigned under the Principal Act. In order to assign a policy
under subsection 200(2) the memorandum of transfer must be endorsed on the
policy or annexure and signed by the transferor and transferee. The effect of
any registered assignment is that there is a conclusive presumption that the
transferee is the absolute owner, free from all trusts, rights, equities and
interests, and a life company is not required to inquire into the circumstances
of any registered assignment.
366. Prior to the amendment, paragraph
201(1)(a), when read in light of section 200, implied, that where two parties
failed to make an agreement separate from the memorandum of transfer endorsed on
the policy, then this process was ineffective as a mortgage of the policy. This
had the effect of invalidating any assignment not made in accordance with the
statutory procedure.
367. The Australian courts have affirmed that, in
addition to the statutory procedures for assignment of an interest which are
outlined in section 200 of the Principal Act, a transferor may also assign their
interest in a life policy in equity. Prior to the amendments, the wording of
subsections 200(1) and 200(2) suggested that there was no right to assign an
interest in equity, and that rights may only be assigned according to statutory
procedure. By contrast, subsections 200(3) and 202(2) suggested that equitable
assignments were still possible. The effect of amendments to sections 200, 201
and 202 are to remove these inconsistencies from the Principal Act.
Item
30 - Subsection 207(1)
368. This item amends subsection 207(1) to
prescribe that surrender values may be requested immediately by policy owners.
Prior to the amendment, life insurance companies were only required to surrender
a policy where the policy had been in force for at least three years. This
requirement, while appropriate for regular premium policies, was not appropriate
for single premium policies. The Life Insurance Act 1945 permitted life
companies to treat single premium policies as having an immediate surrender
value. Due to a technical error in the original drafting, this requirement was
not carried into the Principal Act. This amendment will correct that technical
error.
Item 31 - Subsection 207(6)
369. This item provides that
the surrender value may not be less than the surrender value at 30 June 1995,
adjusted for any transactions since that date (for example, the withdrawal of a
proportion of the benefit).
Item 32 - Subsection 236(1) (definition of
reviewable decision)
370. This item provides that subsection 236(1) is
subject to the newly inserted subsection 236(1A).
Item 33 - After
subsection 236(1)
371. This item inserts a new subsection 236(1A) which
provides that decisions made under sections 49, 62, 63, 68, 73, 134 and 150 are
not reviewable decisions as defined for a period of five years from the
commencement of the subsection. Prior to the amendment, decisions made by the
Commissioner under sections 49, 62, 63, 68, 73, 134 and 150 were subject to
review by the Administrative Appeals Tribunal (AAT). This new process will
remove the risk of life insurers using the AAT process to effectively 'stay' the
Commissioner's decisions, given the potential for ensuing time delays to
jeopardise policy owners interests. The new process will be in place for five
years to ensure its efficacy is reviewed.
Item 34 - At the end of section
244
372. This item permits the Commissioner to charge a fee for the
supply of statistical information.
Item 35 - At the end of subsection
245(3)
373. This item adds a note which makes it clear that the Crimes
Act 1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of imprisonment.
Subsection 4B(3) of that Act allows a court to impose on a body corporate a fine
of up to five times the maximum fine that could be imposed on an
individual.
Item 36 - Section 249
374. This item inserts a new
penalty consistent with current Commonwealth criminal law policy.
Item 37
- Section 249
375. This item repeals the existing penalty and brings the
Principal Act into line with current Commonwealth criminal law
policy.
Item 38 - Subsection 251(1) (paragraph (c) of the definition of
compliance officer)
376. This item repeals paragraph (c) of the
definition of compliance officer and inserts a replacement to ensure consistency
with new provisions being introduced in other legislation administered by the
Insurance and Superannuation Commission and the Reserve Bank of Australia. A
compliance officer will be defined to include employees of the Commonwealth,
former employees, or persons who have been appointed or contracted by the
Commonwealth and receive confidential information from the Insurance and
Superannuation Commission. They will be bound by the same requirements as those
imposed on Insurance and Superannuation Commission employees in relation to the
disclosure of information.
Item 39 - Subsection 251(1)
377. This
item inserts a definition of overseas financial sector supervisory agency to
ensure consistency with new provisions being introduced in other legislation
administered by the Insurance and Superannuation Commission and the Reserve Bank
of Australia.
Item 40 - Subsection 251(1) (at the end of the definition
of protected document)
378. This item narrows the definition of a
protected document to ensure consistency with new provisions being introduced in
other legislation administered by the Insurance and Superannuation Commission
and the Reserve Bank of Australia.
Item 41 - Subsection 251(1) (at the
end of the definition of protected information)
379. This item narrows
the definition of protected information to ensure consistency with new
provisions being introduced in other legislation administered by the Insurance
and Superannuation Commission and the Reserve Bank of Australia.
Item 42
- Subsection 251(2)
380. This item extends the general rule that
information obtained under or for the purposes of the Principal Act must not be
produced or disclosed to any person, or to a court, to include any other Act of
which the Insurance and Superannuation Commission has the general
administration. The objective of this amendment is to bring all secrecy
provisions of all legislation administered by the Insurance and Superannuation
Commission into line with the secrecy provisions in the Principal Act and to
ensure that pre-existing secrecy provisions are consistent with the new
provisions being introduced into legislation administered by the Insurance and
Superannuation Commission and the Reserve Bank of Australia.
Item 43 - At
the end of subsection 251(2)
381. This item adds a penalty for
unauthorised disclosure of protected information or protected documents. It
also adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment.
Item 44 -
Paragraph 251(4)(b)
382. This item permits a compliance officer to
disclose protected information, or produce a protected document to a court for
the purpose of the administration of any other Act of which the Commissioner has
the general administration. This amendment is designed to ensure consistency
between secrecy provisions contained in the Principal Act and secrecy provisions
being introduced in other legislation administered by the Insurance and
Superannuation Commission and the Reserve Bank of Australia.
Item 45 -
After paragraph 251(4)(c)
383. This item permits, in certain
circumstances, a compliance officer to disclose protected information, or
produce a protected document to an overseas financial sector supervisory agency.
The development of financial conglomeration both within Australia and overseas
and failures of some overseas banks have led financial sector supervisors (and
the bodies that coordinate supervisors internationally) to take steps to improve
the sharing of information. A number of insurance companies operating in
Australia are subsidiaries of overseas operations. This amendment will allow
the Insurance and Superannuation Commission to more effectively monitor the
increasingly global activities of the institutions it supervises. The amendment
ensures consistency with secrecy provisions being introduced into legislation
administered by the Insurance and Superannuation Commission and the Reserve Bank
of Australia.
Item 46 - At the end of subsection 251(4)
384. This
item permits, in certain circumstances, a compliance officer to disclose
protected information, or to produce a protected document to members of the
public where the Treasurer has indicated in writing that to do so is in the
public interest. This amendment ensures the consistency of secrecy provisions
in the Principal Act with secrecy provisions being introduced into legislation
administered by the Insurance and Superannuation Commission and the Reserve Bank
of Australia.
Item 47 - Subsection 251(7)
385. This item has the
effect of requiring persons who have ceased to be compliance officers to
continue to be bound by the secrecy provisions of the Principal
Act.
Item 48 - After subsection 251(7)
386. This item inserts
a new subsection which states that paragraphs 4(d) and (e) do not authorise the
disclosure of information, or the production of a document, relating to the
personal affairs of an individual if the disclosure or production would be
unreasonable in the circumstances.
Item 49 - After subsection
251(8)
387. This item inserts a new subsection which allows, in certain
circumstances, a person to disclose information, or produce a document if the
information or the information contained in a document is in such a form that
information relating to any particular person cannot be obtained from
it.
Item 50 - At the end of subsection 251(9)
388. This item adds
a penalty for unauthorised recording or disclosure of protected information or
documents which have been properly disclosed under section 251. It also adds a
note which makes it clear that the Crimes Act 1914 applies to the section.
Subsection 4B(2) of that Act allows a court to impose a monetary penalty instead
of, or in addition to, a term of imprisonment.
Item 51 - At the end of
section 251
389. This item inserts a provision which automatically
repeals the definition of overseas financial sector supervisory agency at the
end of five years from the date of the Royal Assent. This clause is consistent
with Government policy requiring the review of all new legislation.
Item
52 - Schedule (definition of continuous disability policy)
390. This item
inserts the definition of continuous disability policy as set out in section 9A
into the Schedule.
Item 53 - Schedule
391. This item inserts a
definition of produce.
SCHEDULE 13
AMENDMENT OF THE RESERVE
BANK ACT 1959
Item 1 - Subsection 44(1)
392. This item updates the
penalty from a monetary penalty to penalty units in accordance with section 4AA
of the Crimes Act 1914. The amendment is consistent with Government policy to
standardise all penalties in Commonwealth legislation.
Item 2 - After
section 79
393. The development of financial conglomerates both within
Australia and overseas, and failures of some overseas banks have led financial
sector supervisors (and the bodies that coordinate supervisors internationally)
to take steps to improve the sharing of information. The amendments in this
section are part of that effort, and aim to allow the Reserve Bank to share
information about financial institutions when it needs to and, otherwise, to
keep information received from financial institutions and from other supervisory
bodies confidential.
394. Section 79A applies to information received
under the Reserve Bank Act 1959, Banking Act 1959, Financial Corporations Act
1974 and the Banks (Shareholdings) Act 1972. It also applies to other
information received (for example, from market intelligence sources) that may be
used for the purposes of the abovementioned Acts. The section requires the
Reserve Bank (including people employed or engaged - for example, legal counsel
- by it) and other official agencies that receive information under these Acts
to maintain the confidentiality of information about financial institutions
(including related bodies, customers and proposed or former financial
institutions). The Reserve Bank or any receiving agencies could not be
compelled to disclose such information, but would have discretion to share
information when this is desirable for the purposes of the abovementioned Acts
or to assist the following to perform their functions or exercise their
powers:
other financial sector supervisory or regulatory authorities.
These would include the Insurance and Superannuation Commission, Australian
Securities Commission, Australian Financial Institutions Commission, State
Supervisory Authorities, Australian Stock Exchange, Sydney Futures Exchange and
other similar bodies in Australia or overseas. They would not include bodies
that might regulate financial institutions as part of a broader function, for
example, the Australian Taxation Office.
bodies outside the supervisory
community (for example, Australian Bureau of Statistics; Australian
Transaction, Reports and Analysis Centre), but only if the release of
information is approved by the Governor of the Reserve Bank (or his/her
delegate).
395. Information disclosure in terms of subsection (4) - that
is, to assist another financial sector supervisory agency or if the Governor
approves disclosure - is taken to be repealed at the end of five years from the
date of the Royal Assent. This is consistent with the Government's policy
review of all new legislation.
396. All of those with whom receiving
agencies share information would be required to keep the information
confidential. Similar to Insurance and Superannuation Commission secrecy
provisions, documents or information subject to the Reserve Bank of Australia's
secrecy provisions relating to financial institutions will be exempt from the
provisions of the Freedom of Information Act 1982.
397. Information about
a financial institution can be disclosed under the section if the financial
institution gives its permission or if the information is already legally
available to the public from other sources. Information relating to financial
institutions can also be released if information relating to a particular person
cannot be obtained from it.
398. Section 79B applies to all information
and documents that are in the possession of the Reserve Bank, but do not relate
to financial institutions. This provision has been moved from the Reserve Bank
Regulations to ensure that all secrecy provisions relating to the Reserve Bank
are in one place.
Item 3 - Subsection 81A(1)
399. This item
substitutes a reference to the Corporations Law for the reference to the
Companies Act 1981.
Item 4 - Subsection 81A(3)
400. This item
updates a reference to the Companies Act 1981 to the Corporations Law and
inserts a definition of listed corporation.
Item 5 - After section
85
401. This item permits courts to take judicial notice of data
published in the name of, by, or under the authority of the Reserve Bank. This
will save Reserve Bank officers from the time consuming exercise of preparing
affidavits (concerning, for example, historical interest and exchange rate data)
for use in litigation that does not concern the Reserve
Bank.
SCHEDULE 14
AMENDMENT OF THE SUPERANNUATION INDUSTRY
(SUPERVISION) ACT 1993
Item 1 - Subsection 10(1) (at the end of the
definition of protected document)
402. This item narrows the definition
of a protected document to ensure consistency with new provisions being
introduced in other legislation administered by the Insurance and Superannuation
Commission and the Reserve Bank of Australia.
Item 2 - Subsection 10(1)
(at the end of the definition of protected information)
403. This item
narrows the definition of protected information to ensure consistency with new
provisions being introduced in other legislation administered by the Insurance
and Superannuation Commission and the Reserve Bank of Australia.
Item 3 -
Subsection 346(1)
404. This item inserts a definition of court to ensure
consistency with new provisions being introduced in other legislation
administered by the Insurance and Superannuation Commission and the Reserve Bank
of Australia. Prior to the amendment the meaning of court was defined under
subsection 346(11) of the Principal Act.
Item 4 - Subsection
346(1)
405. This item inserts a definition of financial sector
supervisory agency to ensure consistency with new provisions being introduced in
other legislation administered by the Insurance and Superannuation Commission
and the Reserve Bank of Australia.
Item 5 - Subsection
346(1)
406. This item inserts a definition of law enforcement agency to
ensure consistency with new provisions being introduced in other legislation
administered by the Insurance and Superannuation Commission and the Reserve Bank
of Australia.
Item 6 - Subsection 346(1)
407. This item inserts a
definition of overseas financial sector supervisory agency to ensure consistency
with new provisions being introduced in other legislation administered by the
Insurance and Superannuation Commission and the Reserve Bank of
Australia.
Item 7 - Subsection 346(2)
408. This item extends the
general rule that information obtained under or for the purposes of the
Principal Act must not be produced or disclosed to any person, or to a court, to
include any other Act of which the Insurance and Superannuation Commission has
the general administration.
Item 8 - At the end of subsection
346(2)
409. This item adds a note which makes it clear that the Crimes
Act 1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of
imprisonment.
Item 9 - At the end of subsection 346(2A)
410. This
item adds a note which makes it clear that the Crimes Act 1914 applies to the
section. Subsection 4B(2) of that Act allows a court to impose a monetary
penalty instead of, or in addition to, a term of imprisonment.
Item 10 -
Paragraph 346(6)(c)
411. This item extends an exception to the general
rule prohibiting disclosure of protected information or protected documents.
One exception to this general rule is that rule that protected information or
protected documents may be disclosed to a court for the purposes of the
Principal Act. This item extends this exception to allow disclosure to a court
for the purposes of any other Act of which the Insurance and Superannuation
Commission has the general administration.
Item 11 - After paragraph
346(6)(d)
412. This item inserts subsections (daa) and (dab) which
provides for persons to whom a superannuation standards officer may disclose or
produce information and the circumstances in which information can be disclosed
or produced.
Item 12 - After subsection 346(6A)
413. This item
sets out additional persons to whom a superannuation standards officer may
disclose or produce information and the circumstances in which information can
be disclosed or produced.
Item 13 - At the end of subsection
346(7)
414. This item amends subsection 346(7) to provide that the
circumstances where a person can be required to disclose protected information
or documents to a court (that is, for the purposes of the Principal Act) extend
to any other Act of which the Insurance and Superannuation Commission has the
general administration.
Item 14 - After subsection
346(7)
415. This item inserts a new subsection that provides that a
person is not prohibited, in certain circumstances, from disclosing information,
or producing a document if the information or the information contained in a
document is in such a form that information relating to any particular person
cannot be obtained from it.
Item 15 - Subsection 346(9)
416. This
item amends subsection 346(9) to provide that the circumstances where a person
can be required to disclose protected information or documents to a Secretary or
officer of the Department (that is, for the purposes of the Principal Act)
extend to any other Act of which the Insurance and Superannuation Commission has
the general administration.
417. This item amends extends an exception to
the general rule that information obtained under or for the purposes of the
Principal Act must not be produced or disclosed to any person, or to a court, to
include any other Act of which the Insurance and Superannuation Commission has
the general administration.
Item 16 - After subsection
346(9)
418. This item adds a note which makes it clear that the Crimes
Act 1914 applies to the section. Subsection 4B(2) of that Act allows a court to
impose a monetary penalty instead of, or in addition to, a term of
imprisonment.
Item 17 - Subsection 346(11)
419. This item repeals
the subsection and inserts a replacement. The meaning of court has been moved
to subsection 346(1) for housekeeping purposes. The newly inserted subsection
346(11) provides that the definitions of financial sector supervisory agency,
law enforcement agency and overseas financial sector supervisory agency are
taken to be repealed at the end of five years of the date of the Royal Assent.
This clause is consistent with Government policy requiring the review of all new
legislation.
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