Commonwealth Consolidated Acts

LIFE INSURANCE ACT 1995 - SECT 230AB

  (1)   APRA may give a life company a direction (a recapitalisation direction ) that requires the company to increase the company's level of capital to the level specified in the direction, if:

  (a)   the company informs APRA that:

  (i)   the company considers that the company is likely to become unable to meet the company's obligations; or

  (ii)   the company is about to suspend payment; or

  (b)   APRA considers that, in the absence of external support:

  (i)   the company may become unable to meet the company's obligations; or

  (ii)   the company may suspend payment; or

  (iii)   it is likely that the company will be unable to carry on insurance business in Australia consistently with the interests of the company's policy owners; or

  (iv)   it is likely that the company will be unable to carry on insurance business in Australia consistently with the stability of the financial system in Australia; or

  (c)   the company:

  (i)   becomes unable to meet the company's obligations; or

  (ii)   suspends payment.

  (1A)   Subsection   (1B) applies if subsections   230AA(3) and (4) apply to a NOHC/NOHC subsidiary because of a primary recapitalisation direction given to a life company (as mentioned in subsection   230AA(2)).

  (1B)   For the purposes of facilitating compliance with the primary recapitalisation direction, APRA may give the NOHC/NOHC subsidiary a direction (also a recapitalisation direction ) that requires the NOHC/NOHC subsidiary to do anything that is specified in the direction.

  (2)   In deciding whether to give a recapitalisation direction, APRA must consult with the Australian Competition and Consumer Commission (the ACCC ), unless the ACCC notifies APRA, in writing, that the ACCC does not wish to be consulted about:

  (a)   the direction; or

  (b)   a class of directions that includes the direction.

  (2A)   The regulations may specify that a particular form of support is not external support for the purposes of paragraph   (1)(b).

  (3)   A recapitalisation direction is not a legislative instrument.

  (4)   A recapitalisation direction may deal with the time by which, or period during which, it is to be complied with.

  (5)   APRA may, by notice in writing to the life company, vary the recapitalisation direction if, at the time of the variation, it considers that the variation is necessary and appropriate.

  (6)   The direction has effect until APRA revokes it by notice in writing to the life company. APRA may revoke the direction if, at the time of revocation, it considers that the direction is no longer necessary or appropriate.