Commonwealth Consolidated Acts Commonwealth Consolidated ActsPersons to whom requirements apply
(1) This section applies to a person who is or was an auditor or actuary of:
(c) a subsidiary of a general insurer or authorised NOHC.
Matters requiring immediate notice
(2) If the person has reasonable grounds for believing that:
(a) the insurer, NOHC or subsidiary is insolvent, or there is a significant risk that it will become insolvent; or
(d) an existing or proposed state of affairs may materially prejudice the interests of:
(i) in the case of an auditor or actuary of a general insurer or of a subsidiary of a general insurer--the insurer's policyholders; or
(ii) in the case of an auditor or actuary of an authorised NOHC or of a subsidiary of an authorised NOHC--the policyholders of any general insurer who is a subsidiary of the NOHC; or
(e) the general insurer, NOHC or subsidiary:
(i) has contravened this Act or any other law; and
(ii) the contravention is of such a nature that it may affect significantly the interest of policyholders of the general insurer or of a general insurer that is a subsidiary of the NOHC;
the person must immediately notify APRA in writing of the matter.
Offences in relation to matters requiring immediate notice
(3) A person commits an offence if the person contravenes subsection (2).
Penalty: Imprisonment for 6 months, or 100 penalty units, or both.
(4) A person commits an offence if the person contravenes subsection (2). This is an offence of strict liability.
Note 1: For strict liability , see section 6.1 of the Criminal Code .
Note 2: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Defence in relation to matters requiring immediate notice
(5) Subsections (3) and (4) do not apply to a person in relation to a matter referred to in subsection (2) if:
(a) the person becomes aware of the matter because the person is informed of it by a director or senior manager of the insurer, NOHC or subsidiary; and
(b) the director or senior manager informs the person that the insurer, NOHC or subsidiary has notified APRA in writing of the matter; and
(c) the person has no reason to disbelieve the director or senior manager.
Note: The defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code .
Matters requiring notice as soon as practicable
(6) If the person has reasonable grounds for believing:
(i) the insurer, NOHC or subsidiary has failed or will fail to comply with the prudential standards;
(ii) in the case of an insurer--the insurer has failed or will fail to comply with a condition of its authorisation under section 12;
(iii) in the case of an authorised NOHC--the NOHC has failed or will fail to comply with a condition of its authorisation under section 18;
(iv) the insurer, NOHC or subsidiary has failed or will fail to comply with a requirement or direction under this Act, a requirement under the Financial Sector (Collection of Data) Act 2001 or a requirement of the Financial Accountability Regime Act 2023 ; and
(b) that the failure is or will be significant (see subsection (7));
the person must give APRA a written report about the failure as soon as practicable, and in any case no later than 10 business days.
(7) For the purposes of paragraph (6)(b), a failure to comply is or will be significant if the failure to comply is or will be significant having regard to any one or more of the following:
(a) the number or frequency of similar failures;
(b) the impact the failure has or will have on the insurer's, NOHC's or subsidiary's ability to conduct its business;
(c) the extent to which the failure indicates that the insurer's, NOHC's or subsidiary's arrangements to ensure compliance with this Act or with the prudential standards might be inadequate;
(d) the actual or potential financial loss arising or that will arise from the failure:
(i) in the case of an insurer--to the policy holders of the insurer; or
(ii) to the insurer, NOHC or subsidiary;
(e) any matters prescribed by the regulations for the purposes of this paragraph.
Offences in relation to matters requiring notice as soon as practicable
(8) A person commits an offence if the person contravenes subsection (6).
Penalty: Imprisonment for 6 months, or 100 penalty units, or both.
(9) A person commits an offence if the person contravenes subsection (6). This is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
Defence if failure already notified
(10) Subsections (8) and (9) do not apply to a person in relation to a failure to comply referred to in subsection (6) if:
(a) a director or senior manager of the insurer, NOHC or subsidiary informs the person that the insurer, NOHC or subsidiary has informed APRA in writing of the failure; and
(b) the person has no reason to disbelieve the director or senior manager.
Note: The defendant bears an evidential burden in relation to the matters in subsection (10). See subsection 13.3(3) of the Criminal Code .
Offence in relation to subsections (5) and (10)
(11) A person commits an offence if:
(a) the person is a director or senior manager of a general insurer, an authorised NOHC or a subsidiary of a general insurer or authorised NOHC; and
(b) the person knows that there are reasonable grounds for believing a thing referred to in subsection (2) or (6); and
(c) the person informs an auditor or the actuary of the insurer, NOHC or subsidiary that the insurer, NOHC or subsidiary has informed APRA in writing of the thing; and
(d) the insurer, NOHC or subsidiary has not done so.
Penalty: Imprisonment for 12 months.