Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Subject to this section, in the winding - up of a life company, the assets of a statutory fund ( the primary fund ) must first be applied in accordance with the Corporations Act 2001 in discharging debts and claims referred to in subsection 556(1) of that Act.
(2) Subsection (1) has effect only to the extent that debts or claims are liabilities that are referable to the business of the primary fund.
(3) If any assets remain after the application of subsection (1), the assets must be applied according to the following rules:
(a) the assets are to be applied first in discharge of policy liabilities of the company referable to the primary fund;
(b) if any assets remain, they are to be applied in discharge of other liabilities that are referable to the business of the fund;
(c) if, after the application of assets according to paragraphs (a) and (b), any assets of the primary fund remain, those assets are to be applied in such manner as the Court directs;
(d) directions given for the purpose of paragraph (c) are to be such directions as the Court considers equitable, having regard to:
(i) the interests of the owners of policies referable to the primary fund;
(ii) the interests of the owners of policies referable to statutory funds of the company other than the primary fund; and
(iii) the interests of creditors of the company whose debts have not been discharged by the application of assets according to paragraph (b); and
(iv) the interests of shareholders of the company.
(4) The reference in subparagraph (3)(d)(iii) to creditors of a company is not limited to creditors to whom amounts are due in relation to the business of a statutory fund. The reference is intended to include all creditors of a company, whatever the nature of the liabilities involved.
(5) If a liability of the company:
(a) is referable to 2 or more statutory funds; or
(b) is referable in part to a statutory fund but is also related to business, other than life insurance business, carried on by the company;
the liquidator may apportion the liability so as to determine the part of the liability that is to be borne by each of the statutory funds or by the statutory fund, as the case may be.
(6) In making an apportionment under subsection (5), the liquidator must comply with any directions of the Court.
(7) The part of the amount so determined in relation to a
statutory fund is to be treated as a liability of the company that is
referable to the business of the fund.