Commonwealth Consolidated Acts

LIFE INSURANCE ACT 1995 - SECT 12B

  (1)   This section applies to business consisting of the provision of eligible financial benefits. For this purpose, an eligible financial benefit is a benefit in relation to which the following conditions are satisfied:

  (a)   the benefit is to be provided by a company to a person in accordance with a contract;

  (b)   the person's entitlement to the benefit is conditional on amounts being paid in accordance with the contract;

  (c)   the benefit is an amount of money (and is not, for example, the provision of a service or facility);

  (d)   the benefit is not an excluded benefit under any of the following subparagraphs:

  (i)   the benefit is an excluded benefit if the contract is entered into in the course of banking business, as defined in section   5 of the Banking Act 1959 , carried on by the company;

  (ii)   the benefit is an excluded benefit if the right to the benefit constitutes an interest in a registered scheme, as defined in section   9 of the Corporations Act 2001 ;

  (iii)   the benefit is an excluded benefit if the right to the benefit constitutes an interest in a regulated superannuation fund, an approved deposit fund, a pooled superannuation trust or a public sector superannuation scheme, as defined in section   10 of the Superannuation Industry (Supervision) Act 1993 ;

  (iv)   the benefit is an excluded benefit if it is provided under a contract of insurance entered into in the course of carrying on health insurance business;

  (v)   the benefit is an excluded benefit if it is a benefit of a kind specified in regulations for the purposes of this subparagraph.

  (2)   APRA may, on the application of a company, declare, in writing, that business:

  (a)   that:

  (i)   is carried on by the company; and

  (ii)   is business to which this section applies; or

  (b)   that:

  (i)   the company proposes to carry on; and

  (ii)   will, when it is carried on, be business to which this section applies;

is to be treated, for the purposes of this Act, as if it were life insurance business.

  (3)   The application must comply with any applicable requirements in the prudential standards.

  (4)   APRA must only make the declaration if it is satisfied that:

  (a)   the company is a life company; or

  (b)   the company is not currently a life company, but the only business it proposes to carry on if the declaration is made is:

  (i)   the business in respect of which the declaration is sought; or

  (ii)   that business and other business that will be, or is likely to be declared to be, life insurance business.

  (5)   In deciding whether to make the declaration, APRA may also have regard to the following matters:

  (a)   whether the business in respect of which the declaration is sought is similar in nature to other life insurance business;

  (b)   whether it would be appropriate for the business to be regulated under this Act;

  (c)   whether it would be more appropriate for the business to be regulated under some other law (for example, Chapter   5C of the Corporations Act 2001 );

  (d)   the tax treatment of benefits provided in the course of the business;

  (e)   if the company is not registered under section   21--whether the company would be able to be registered under section   21;

  (f)   any other matter that APRA considers is relevant.

  (6)   The declaration must also state the class of life insurance business in which the business is to be treated as being included.

  (7)   If APRA makes a declaration:

  (a)   this Act has effect accordingly; and

  (b)   APRA must give a copy of the declaration to the company.