Commonwealth Numbered Acts Commonwealth Numbered Acts1 Subsection 3(1)
Insert:
"administrator " , of a body corporate's business, means an administrator appointed under subsection 62ZOA(1) to take control of the body corporate's business.
"Australian business assets and liabilities " , of a foreign general insurer, has the meaning given by subsection 62ZVA(3).
"Australian financial sector statutory manager (or AFS statutory manager" ) means:
(a) a Banking Act statutory manager (within the meaning of the Banking Act 1959 ); or
(b) an Insurance Act statutory manager; or
(c) a Life Insurance Act statutory manager (within the meaning of the Life Insurance Act 1995 ).
"direction under this Act " means a direction under any of the following provisions:
(a) section 17;
(b) section 27;
(c) section 49R;
(d) section 74;
(e) section 76;
(f) section 78;
(g) section 103B;
(h) section 104.
2 Subsection 3(1) (paragraph (a) of the definition of external administrator )
Omit "or provisional liquidator".
3 Subsection 3(1) (paragraph (b) of the definition of external administrator )
Omit "a judicial manager", substitute "a judicial manager or an Insurance Act statutory manager".
4 Subsection 3(1)
Insert:
"financial market " has the meaning given by section 761A of the Corporations Act 2001 .
"holding company " , of a body corporate, means another body corporate of which the first body corporate is a subsidiary.
" Insurance Act statutory manager " has the meaning given by subsection 62ZOA(8).
"liquidator " includes a provisional liquidator.
"listing rules " has the meaning given by section 761A of the Corporations Act 2001 .
"NOHC/NOHC subsidiary " has the meaning given by subsection 103A(5).
5 Subsection 3(1) (definition of prudential matters )
Repeal the definition, substitute:
"prudential matters " means matters relating to:
(a) the conduct of any part of the affairs of, or the structuring or organising of, a general insurer, an authorised NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, in such a way as:
(i) to keep the general insurer, NOHC, group or member or members of the group in a sound financial position; or
(ii) to facilitate resolution of the general insurer, NOHC, group or member or members of the group; or
(iii) to protect the interests of policyholders of any general insurer; or
(iv) not to cause or promote instability in the Australian financial system; or
(b) the conduct of any part of the affairs of a general insurer, an authorised NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, with integrity, prudence and professional skill.
6 Subsection 3(1) (definition of recapitalisation direction )
Omit "subsection 103B(1)", substitute "subsection 103B(1) or (1B)".
7 Subsection 3(1)
Insert:
"related body corporate " , in relation to a body corporate, means:
(a) in Part V--a body corporate that is related to the first-mentioned body, as determined in accordance with section 50; and
(b) otherwise--a body corporate that is related to the first-mentioned body, as determined in accordance with section 4B.
"relevant group of bodies corporate " has the meaning given by section 4A.
"resolution " means the process by which APRA or other relevant persons manage or respond to an entity:
(a) being unable to meet its obligations; or
(b) being considered likely to be unable, or being considered likely to become unable, to meet its obligations; or
(c) suspending payment, or being considered likely to suspend payment;
including through the exercise of powers and functions under this Act or another law.
"transferred liabilities determination " means a determination under subsection 62ZZMA(1).
8 Section 4
Repeal the section, substitute:
For the purposes of this Act (except Part V), the question whether a body corporate is a subsidiary of another body corporate is to be determined in the same way as that question is determined for the purposes of the Corporations Act 2001 .
4A Meaning of relevant group of bodies corporate
For the purposes of this Act:
(a) a general insurer and its subsidiaries together constitute a relevant group of bodies corporate ; and
(b) an authorised NOHC and its subsidiaries together also constitute a relevant group of bodies corporate .
4B Determining whether bodies corporate are related to one another
For the purposes of this Act (except Part V), the question whether a body corporate is related to another body corporate is to be determined in the same way as that question is determined for the purposes of the Corporations Act 2001 .
9 Section 15 (heading)
Repeal the heading, substitute:
15 Revocation of authorisation etc.
10 Subparagraph 15(1)(a)(iii)
Repeal the subparagraph, substitute:
(iia) a requirement of a provision of another law of the Commonwealth, if the provision is specified in the regulations; or
(iii) a direction under this Act to the insurer; or
11 After paragraph 15(1)(f)
Insert:
(fa) both of the following apply:
(i) the insurer is a foreign corporation within the meaning of paragraph 51(xx) of the Constitution;
(ii) an authorisation (however described) for the insurer to carry on insurance business in a foreign country has been revoked or otherwise withdrawn in that foreign country; or
12 Paragraph 15(1)(g)
Omit "authority", substitute "authorisation".
13 Subparagraph 21(1)(a)(iii)
Repeal the subparagraph, substitute:
(iia) a requirement of a provision of another law of the Commonwealth, if the provision is specified in the regulations; or
(iii) a direction under this Act to the authorised NOHC; or
14 At the end of Division 4 of Part III
Add:
23A APRA may give notice to ensure that general insurer has an authorised NOHC
(1) This section applies if:
(a) a body corporate is a holding company of a general insurer; and
(b) the general insurer is not a subsidiary of an authorised NOHC.
(2) APRA may, by notice in writing to the body corporate, require it to ensure, in accordance with the conditions (if any) specified in the notice, that either of the following occurs:
(a) the body corporate becomes an authorised NOHC of the general insurer;
(b) a subsidiary of the body corporate becomes an authorised NOHC of the general insurer.
Note: See Part 4A of the Financial Sector (Transfer and Restructure) Act 1999 for other provisions that deal with a restructure arrangement to make an operating body a subsidiary of a NOHC.
(3) The notice may deal with the time by which, or period during which, it is to be complied with.
(4) The body corporate has power to comply with the notice despite anything in its constitution or any contract or arrangement to which it is a party.
(5) APRA may, by notice in writing to the body corporate, vary the notice mentioned in subsection (2) if, at the time of the variation, it considers that the variation is necessary and appropriate.
(6) The notice mentioned in subsection (2) has effect until APRA revokes it by notice in writing to the body corporate. APRA may revoke the notice mentioned in subsection (2) if, at the time of revocation, it considers that the notice is no longer necessary or appropriate.
(7) Part VI applies to a decision to give a notice under subsection (2).
(8) Section 108 applies in relation to a notice to a body corporate under subsection (2) in the same way in which it applies to a direction to a general insurer under section 104.
(9) However, section 108 does not apply to a contravention by a body corporate of a requirement in a notice under subsection (2) if:
(a) the contravention happens merely because APRA refuses to authorise the body corporate (or its subsidiary) under section 18; and
(b) APRA's reasons for that refusal do not include the reason that one or more conditions specified in the notice are not satisfied.
15 Subparagraph 32(3)(a)(iv)
Omit "NOHCs; or", substitute "NOHCs;".
16 At the end of paragraph 32(3)(a)
Add:
(v) each subsidiary of a general insurer or of an authorised NOHC;
(vi) each subsidiary of a general insurer or of an authorised NOHC, included in a specified class of subsidiaries; or
17 After Division 1 of Part IIIA
Insert:
Division 2 -- Conversion and write-off provisions
In this Division:
"clearing and settlement facility " has the meaning given by Division 6 of Part 7.1 of the Corporations Act 2001 .
"conversion and write-off provisions " means the provisions of the prudential standards that relate to the conversion or writing off of:
(a) Additional Tier 1 and Tier 2 capital; or
(b) any other instrument.
"conversion entity " : an entity (the first entity ) is a conversion entity for an instrument if:
(a) the instrument is issued by another entity, or another entity is a party to the instrument; and
(b) the instrument converts, in accordance with the terms of the instrument, into one or more ordinary shares of the first entity.
"converts " : an instrument converts into one or more ordinary shares of an entity including by redeeming or cancelling the instrument or rights under the instrument, and replacing the instrument or rights with ordinary shares.
"operating rules " has the meaning given by section 761A of the Corporations Act 2001 .
"related subsidiary " of a general insurer means a subsidiary of a holding company of the general insurer.
"specified law " means any of the following:
(a) the Financial Sector (Shareholdings) Act 1998 ;
(b) the Foreign Acquisitions and Takeovers Act 1975 ;
(c) Chapter 6 of the Corporations Act 2001 (takeovers);
(d) any other Australian law, or law of a foreign country or part of a foreign country, prescribed by the regulations for the purposes of this paragraph.
36B Conversion and write-off provisions
Application
(1) This section applies in relation to an instrument that contains terms that are for the purposes of the conversion and write-off provisions and that is issued by, or to which any of the following is a party:
(a) a general insurer;
(b) a holding company of a general insurer;
(c) a subsidiary or related subsidiary of a general insurer;
(d) an entity of a kind prescribed by the regulations for the purposes of this paragraph.
Conversion of instrument despite other laws etc.
(2) The instrument may be converted in accordance with the terms of the instrument despite:
(a) any Australian law or any law of a foreign country or a part of a foreign country, other than a specified law; and
(b) the constitution of any of the following entities (the relevant entity ):
(i) the entity issuing the instrument;
(ii) any entity that is a party to the instrument;
(iii) any conversion entity for the instrument; and
(c) any contract or arrangement to which a relevant entity is a party; and
(d) any listing rules or operating rules of a financial market in whose official list a relevant entity is included; and
(e) any operating rules of a clearing and settlement facility through which the instrument is traded.
Write-off of instrument despite other laws etc.
(3) The instrument may be written off in accordance with the terms of the instrument despite:
(a) any Australian law or any law of a foreign country or a part of a foreign country; and
(b) the constitution of either of the following entities (the relevant entity ):
(i) the entity issuing the instrument;
(ii) any entity that is a party to the instrument; and
(c) any contract or arrangement to which a relevant entity is a party; and
(d) any listing rules or operating rules of a financial market in whose official list a relevant entity is included; and
(e) any operating rules of a clearing and settlement facility through which the instrument is traded.
36C Conversion or write-off etc. not grounds for denial of obligations
(1) This section applies if an entity (the first entity ) is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(2) None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the first entity), to do any of the following:
(a) deny any obligation under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
(3) The matters are as follows:
(a) a relevant instrument being converted in accordance with the terms of the instrument;
(b) a relevant instrument being written off in accordance with the terms of the instrument;
(c) the making of a determination (however described) by APRA that results in a relevant instrument being required to be converted or written off in accordance with the terms of the instrument.
(4) In this section:
"relevant instrument " means:
(a) an instrument to which section 36B applies:
(i) that is issued by the first entity; or
(ii) to which the first entity is a party; or
(iii) for which the first entity is a conversion entity; or
(b) if the first entity is a body corporate that is a member of a relevant group of bodies corporate--an instrument to which section 36B applies:
(i) that is issued by another member of the group; or
(ii) to which another member of the group is a party; or
(iii) for which another member of the group is a conversion entity.
18 Subsection 38A(2)
Omit "related body corporate" (wherever occurring), substitute "whistleblower related body corporate".
19 Subsection 38A(3)
Omit " related body corporate ", substitute " whistleblower related body corporate ".
20 Subparagraph 38E(1)(b)(i)
Omit "a related body corporate in within", substitute "a whistleblower related body corporate within".
21 Subparagraph 38E(1)(b)(ii)
Omit "related body corporate", substitute "whistleblower related body corporate within the meaning of subsection 38A(3)".
22 Paragraph 38E(1)(c)
Omit "related body corporate" (wherever occurring), substitute "whistleblower related body corporate within the meaning of subsection 38A(3)".
23 Section 49C
Repeal the section.
24 At the end of section 50
Add:
(3) The question whether bodies corporate are related to each other for the purposes of this Part is to be determined in the same way as the question whether bodies corporate are related to each other would be determined under the Corporations Act 2001 if, in section 46 of that Act:
(a) the reference to a body corporate that is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of another body corporate were a reference to a body corporate that is in a position to cast, or control the casting of, more than one-quarter of that number of votes; and
(b) the reference to a body corporate holding more than one-half of the issued share capital of another body corporate were a reference to a body corporate holding more than one-quarter of the issued share capital of another body corporate.
25 Part VB (heading)
Repeal the heading, substitute:
Part VB -- Judicial management, statutory management, other external administration and winding up
26 Section 62L (note)
Repeal the note, substitute:
Note: This section and other provisions relating to judicial management do not apply to the aspects described in subsection 62ZVA(1) of the business and management of a foreign general insurer.
27 Section 62M
Before "On an application", insert "(1)".
28 Subparagraph 62M(a)(i)
Before "the general insurer", insert "in the absence of external support,".
29 Subparagraph 62M(a)(ii)
After "the general insurer is a foreign general insurer and", insert ", in the absence of external support,".
30 After subparagraph 62M(a)(iv)
Insert:
(iva) an external administrator has been appointed to a holding company of the general insurer (or a similar appointment has been made in a foreign country in respect of such a holding company), and the requirement in subsection (2) is satisfied; or
(ivb) if the general insurer is a foreign general insurer--an application for the appointment of an external administrator of the foreign general insurer, or for a similar procedure in respect of the foreign general insurer, has been made in a foreign country; or
(ivc) if the general insurer is a foreign general insurer--an external administrator has been appointed to the foreign general insurer, or a similar appointment has been made in respect of the foreign general insurer, in a foreign country; or
31 Section 62M (note 1)
Repeal the note, substitute:
Note 1: This section and other provisions relating to judicial management do not apply to the aspects described in subsection 62ZVA(1) of the business and management of a foreign general insurer.
32 At the end of section 62M
Add:
(2) For the purposes of subparagraph (1)(a)(iva), the requirement in this subsection is that the appointment mentioned in that subparagraph poses a significant threat to:
(a) the operation or soundness of the general insurer; or
(b) the interests of policyholders of the general insurer; or
(c) the stability of the financial system in Australia.
(3) The regulations may specify that a particular form of support for a general insurer is not to be considered external support for the purposes of subparagraphs (1)(a)(i) and (ii).
33 Section 62P
Repeal the section, substitute:
62P Moratorium--effect of judicial management on court and tribunal proceedings
(1) A person cannot begin or continue a proceeding in a court or tribunal covered by subsection (9) in respect of a general insurer if the general insurer is under judicial management.
(2) Subsection (1) does not apply if:
(a) the court or tribunal grants leave for the proceedings to be begun or continued on the ground that the person would be caused hardship if leave were not granted; and
(b) the beginning or continuing of the proceedings is in accordance with such terms (if any) as the court or tribunal imposes.
(3) A person intending to apply for leave of the court or tribunal under paragraph (2)(a) must give APRA and the judicial manager at least 10 days notice of the intention to apply (or a shorter period, if the court or tribunal considers that exceptional circumstances make this necessary).
(4) APRA may apply to the court or tribunal to be joined as a party to the proceedings for leave. If APRA is joined as a party, the court or tribunal must have regard to APRA's views in deciding:
(a) whether to grant leave under paragraph (2)(a); and
(b) if the court or tribunal decides to grant the leave--whether to impose terms as mentioned in paragraph (2)(b); and
(c) if the court or tribunal decides to impose such terms--the nature of those terms.
(5) The judicial manager may apply to the court or tribunal to be joined as a party to the proceedings for leave. If the judicial manager is joined as a party, the court or tribunal must have regard to the judicial manager's views in deciding:
(a) whether to grant leave under paragraph (2)(a); and
(b) if the court or tribunal decides to grant the leave--whether to impose terms as mentioned in paragraph (2)(b); and
(c) if the court or tribunal decides to impose such terms--the nature of those terms.
(6) Subsection (1) also does not apply if the judicial manager, after considering APRA's views, consents to the proceedings beginning or continuing.
(7) The judicial manager cannot revoke a consent given for the purposes of subsection (6).
(8) The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (6).
(9) A proceeding in a court or tribunal is covered by this subsection in respect of a general insurer if it is any of the following:
(a) a proceeding against the general insurer (including a cross-claim or third party claim against the general insurer);
(b) a proceeding in relation to property of the general insurer;
(c) a proceeding to enforce any security (including a mortgage or charge) granted by the general insurer, or by a related body corporate of the general insurer, over any property that the general insurer owns, uses, possesses, occupies or in which the general insurer otherwise has an interest.
(10) Subsection (9) does not cover a proceeding in respect of an offence or a contravention of a provision of a law for which a pecuniary penalty (however described) may be imposed.
(11) In this section, a reference to a tribunal includes a reference to the following:
(a) an industrial tribunal;
(b) an arbitral tribunal.
62PA Moratorium--effect of judicial management on enforcement process regarding property
(1) No enforcement process in relation to property of a general insurer can be begun or proceeded with if the general insurer is under judicial management.
(2) Subsection (1) does not apply if:
(a) the Federal Court grants leave for the process to be begun or continued on the ground that the person would be caused hardship if leave were not granted; or
(b) the beginning or continuing of the process is in accordance with such terms (if any) as the Federal Court imposes.
(3) A person intending to apply for leave of the Federal Court under paragraph (2)(a) must give APRA and the judicial manager at least 10 days notice of the intention to apply (or a shorter period, if the Federal Court considers that exceptional circumstances make this necessary).
(4) APRA may apply to the Federal Court to be joined as a party to the proceedings for leave. If APRA is joined as a party, the Federal Court must have regard to APRA's views in deciding:
(a) whether to grant leave under paragraph (2)(a); and
(b) if the Federal Court decides to grant the leave--whether to impose terms as mentioned in paragraph (2)(b); and
(c) if the Federal Court decides to impose such terms--the nature of those terms.
(5) The judicial manager may apply to the Federal Court to be joined as a party to the proceedings for leave. If the judicial manager is joined as a party, the Federal Court must have regard to the judicial manager's views in deciding:
(a) whether to grant leave under paragraph (2)(a); and
(b) if the Federal Court decides to grant the leave--whether to impose terms as mentioned in paragraph (2)(b); and
(c) if the Federal Court decides to impose such terms--the nature of those terms.
(6) Subsection (1) also does not apply if the judicial manager consents to the process beginning or continuing.
(7) The judicial manager cannot revoke a consent given for the purposes of subsection (6).
(8) The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (6).
62PB Moratorium--effect of judicial management on disposal of property
(1) A person must not dispose of property if:
(a) the property is owned by another person; and
(b) the other person is a general insurer; and
(c) the general insurer is under judicial management.
Note: The Federal Court may grant an injunction under section 129D in respect of a contravention of this subsection.
(2) Subsection (1) does not apply if the judicial manager consents to the disposal.
(3) The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (2).
62PC Moratorium--Restrictions on exercise of third party property rights
(1) Section 440B of the Corporations Act 2001 applies during a period in which a general insurer is under judicial management in the same way it applies during the administration of a company.
(2) For the purposes of this section, treat the reference in paragraph 440B(2)(a) of the Corporations Act 2001 to the administrator's written consent as being a reference to the judicial manager's written consent.
(3) The judicial manager is not liable to an action or other proceedings for damages in respect of a refusal to give consent as mentioned in subsection (2).
(4) This section applies despite sections 62P, 62PA and 62PB.
62PD Moratorium--effect of judicial management on supply of essential services
(1) If:
(a) a general insurer is under judicial management; and
(b) the judicial manager requests, or authorises someone else to request, a person or authority (the supplier ) to supply an essential service to the general insurer in Australia; and
(c) the general insurer owes an amount to the supplier in respect of the supply of the essential service before the day on which the judicial manager took control of the general insurer's business;
the supplier must not:
(d) refuse to comply with the request for the reason only that the amount is owing; or
(e) make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid.
Note: The Federal Court may grant an injunction under section 129D in respect of a contravention of this subsection.
(2) In this section:
"essential service " has the same meaning as in section 600F of the Corporations Act 2001.
62PE Moratorium--effect of judicial management on annual general meeting
(1) This section applies to a general insurer that is required under section 250N or section 601BR of the Corporations Act 2001 to hold an annual general meeting within a particular period.
(2) Despite section 250N and section 601BR of that Act, if the general insurer is under judicial management at the end of that period, the general insurer need not hold that annual general meeting.
34 Section 62Q
Repeal the section.
35 After subsection 62R(1)
Insert:
(1A) If, subsequent to that order, a situation arises where there is no judicial manager of the general insurer, or it appears to the Federal Court that it is likely that such a situation will arise, the Federal Court may appoint another judicial manager of the general insurer.
(1B) If the Federal Court appoints 2 or more judicial managers of a general insurer, or appoints one or more additional judicial managers of a general insurer:
(a) except to the extent (if any) specified in a declaration by the Federal Court under paragraph (b), the functions and powers under this Act of a judicial manager of the general insurer may be performed or exercised by:
(i) all of the judicial managers of the general insurer acting jointly; or
(ii) each of the judicial managers of the general insurer acting individually; and
(b) at the time of appointment, the Federal Court may make a declaration for the purposes of paragraph (a), specifying limits or conditions on the judicial managers' ability to perform functions and exercise powers jointly or individually; and
(c) treat a reference in this Act to a judicial manager as being a reference to whichever one or more of those judicial managers the case requires.
36 Subsection 62R(2)
Repeal the subsection, substitute:
(2) The Federal Court may cancel the appointment of a judicial manager and appoint another person as judicial manager:
(a) on application by APRA; or
(b) of its own motion.
37 Subsection 62R(3)
Omit "However,".
38 Section 62T
Repeal the section, substitute:
62T Effect of judicial management on powers of officers etc.
(1) Subject to subsection (3), if the Federal Court has made an order placing a general insurer under judicial management:
(a) at the time the judicial management commences:
(i) a person with the powers and functions of an officer of the general insurer immediately before that time ceases to have those powers and functions; and
(ii) if the general insurer is a foreign general insurer and there is a person with the powers and functions of an agent of the general insurer for the purposes of section 118 immediately before that time--the person ceases to have those powers and functions; and
(iii) the judicial manager appointed by the Court starts to have the powers and functions mentioned in subparagraph (i) (and, if applicable, subparagraph (ii)); and
(b) while the general insurer is under judicial management:
(i) if a person mentioned in subparagraph (a)(i) or (ii) purports to act in relation to the general insurer's business, the purported act is invalid and of no effect; and
(ii) the judicial manager has the powers and functions of the members of the board of directors of the general insurer (collectively and individually), including the board's powers of delegation.
(2) Subsection (1) does not remove an officer or agent of the general insurer from office.
(3) A general insurer may not issue policies without the leave of the Federal Court if the company is under judicial management.
Note: This section and other provisions relating to judicial management do not apply to the aspects described in subsection 62ZVA(1) of the business and management of a foreign general insurer.
(4) In this section, officer has the same meaning as it has in the Corporations Act 2001 .
39 Subsection 62U(1)
Omit "when the management of the general insurer vests in the judicial manager appointed by the Federal Court", substitute "when the judicial management of the general insurer commences".
40 Subsection 62U(2)
Omit "while the management of the general insurer is vested in the judicial manager appointed by the Federal Court", substitute "while the general insurer is under judicial management".
41 Subsection 62U(3)
Omit "while the management of the general insurer is vested in a judicial manager", substitute "while the general insurer is under judicial management".
42 Subsection 62U(4)
Omit "that the management of the general insurer vests in the judicial manager when the judicial management commences", substitute "that the general insurer is under judicial management".
43 Section 62V
Repeal the section, substitute:
62V Judicial management not ground for denial of obligations
(1) This section applies if a body corporate is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(2) None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:
(a) deny any obligations under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
(3) The matters are as follows:
(a) the making by the Federal Court of an order that the body corporate be placed under judicial management;
(b) the commencement of the judicial management of the body corporate;
(c) if the body corporate is a member of a relevant group of bodies corporate:
(i) the making by the Federal Court of an order that another member of the group be placed under judicial management; or
(ii) the commencement of the judicial management of another member of the group.
44 Section 62W
Before "The appointment of", insert "(1)".
45 Section 62W
Omit "The appointment of a judicial manager under this Part does not affect", substitute "None of the matters mentioned in subsection (2) affect".
46 At the end of section 62W
Add:
(2) The matters are as follows:
(a) the making by the Federal Court of an order that the general insurer be placed under judicial management;
(b) the commencement of the judicial management of the general insurer.
47 Paragraph 62Z(4)(a)
After "the Corporations Act 2001 ", insert "(without limiting the scope of section 127B of this Act)".
48 Paragraph 62Z(4)(d)
Omit "(as defined in section 761A of the Corporations Act 2001 ) of a financial market (as defined in that section)", substitute "of a financial market".
49 Section 62ZB
Repeal the section, substitute:
62ZB Act under section 62Z not ground for denial of obligations
(1) This section applies if a body corporate is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(2) None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:
(a) deny any obligations under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
(3) The matters are as follows:
(a) a judicial manager doing an act under subsection 62Z(1) relating to the body corporate;
(b) if the body corporate is a member of a relevant group of bodies corporate--a judicial manager doing an act under subsection 62Z(1) relating to another member of the group.
50 Subsection 62ZF(5)
Repeal the subsection, substitute:
(5) At the time when an order cancelling the judicial management of the general insurer comes into force:
(a) the judicial manager ceases to have the powers and functions of an officer of the general insurer; and
(b) the board of directors or other governing body of the general insurer starts to have those powers; and
(c) if the general insurer is a foreign general insurer and there is a person appointed as an agent of the general insurer for the purposes of section 118--the person starts to have the powers and functions of such an agent.
51 Paragraph 62ZI(2)(aa)
Omit " Financial Sector (Business Transfer and Group Restructure) Act 1999 " , substitute " Financial Sector (Transfer and Restructure) Act 1999 ".
52 After paragraph 62ZI(2)(aa)
Insert:
(ab) to transfer shares in the company to another company under section 25AA of the Financial Sector (Transfer and Restructure) Act 1999 ;
53 Subparagraph 62ZJ(3)(b)(i)
After "the Corporations Act 2001 ", insert "(without limiting the scope of section 127B of this Act)".
54 Subparagraph 62ZJ(3)(b)(iv)
Omit "(as defined in section 761A of the Corporations Act 2001 ) of a financial market (as defined in that section)", substitute "of a financial market".
55 Subsection 62ZK(2)
Omit "the management of the general insurer continues to be vested in the judicial manager", substitute "the general insurer continues to be under judicial management".
56 Section 62ZM
Repeal the section, substitute:
(1) A judicial manager, or a person acting on behalf of a judicial manager, is not subject to any liability (whether civil or criminal) in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on the judicial manager by or under this Act.
(2) Subsection (1) does not apply to an act or omission in bad faith.
(3) A judicial manager is not liable under section 588G of the Corporations Act 2001 . This subsection does not limit the scope of subsection (1).
Signpost to secrecy obligations
(4) Part 6 of the Australian Prudential Regulation Authority Act 1998 prohibits certain disclosures of information received by judicial managers under this Act.
57 Section 62ZO
Repeal the section.
58 After Division 1 of Part VB
Insert:
Division 1A -- Statutory management of general insurers
Subdivision A -- General provisions relating to statutory management
62ZOA Consequences of inability or failure of general insurer etc. to meet certain requirements
Appointment of administrator or control by APRA
(1) APRA may take control of a general insurer's business or appoint an administrator to take control of the general insurer's business if both of the following requirements are met:
(a) APRA is satisfied of the matters of which the Federal Court is required to be satisfied for the purposes of section 62L or 62M;
(b) subsection (2) applies.
(2) This subsection applies if APRA is satisfied that at least one of the following situations exists:
(a) both:
(i) an AFS statutory manager has taken control of a body corporate under this Act, the Banking Act 1959 or the Life Insurance Act 1995 (or APRA intends for that to occur); and
(ii) the general insurer and the body corporate are related bodies corporate;
(b) both:
(i) the general insurer's financial position is deteriorating rapidly, or is likely to deteriorate rapidly; and
(ii) failure to respond quickly to the deterioration would be likely to prejudice the interests of policyholders of the insurer;
(c) it is likely that the insurer will be unable to carry on insurance business in Australia consistently with the stability of the financial system in Australia;
(d) an external administrator has been appointed to a holding company of the general insurer (or a similar appointment has been made in a foreign country in respect of such a holding company), and the appointment poses a significant threat to:
(i) the operation or soundness of the general insurer; or
(ii) the interests of policyholders of the general insurer; or
(iii) the stability of the financial system in Australia;
(e) if the general insurer is a foreign general insurer:
(i) an application for the appointment of an external administrator of the foreign general insurer, or for a similar procedure in respect of the foreign general insurer, has been made in a foreign country; or
(ii) an external administrator has been appointed to the foreign general insurer, or a similar appointment has been made in respect of the foreign general insurer, in a foreign country.
(3) APRA may take any of the actions mentioned in subsection (4) in relation to a body corporate (the target body corporate ) if:
(a) the target body corporate is a body corporate that is any of the following:
(i) an authorised NOHC of a general insurer (the relevant general insurer );
(ii) a subsidiary of an authorised NOHC of a general insurer (also the relevant general insurer );
(iii) a subsidiary of a general insurer (also the relevant general insurer ); and
(b) the condition in subsection (5), (6) or (7) is satisfied; and
(c) the target body corporate is incorporated in Australia; and
(d) the target body corporate is not a body corporate of a kind specified in regulations (if any) made for the purposes of this paragraph.
(4) The actions are as follows:
(a) taking control of the business of the target body corporate;
(b) appointing an administrator to take control of the business of the target body corporate.
(5) The condition in this subsection is satisfied if:
(a) either:
(i) an Insurance Act statutory manager has taken control of the relevant general insurer; or
(ii) the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant general insurer, and APRA intends that an Insurance Act statutory manager will take control of the relevant general insurer; and
(b) APRA considers that the target body corporate provides services that are, or conducts business that is, essential to the capacity of the relevant general insurer to maintain its operations.
(6) The condition in this subsection is satisfied if:
(a) either:
(i) an Insurance Act statutory manager has taken control of the relevant general insurer; or
(ii) the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant general insurer, and APRA intends that an Insurance Act statutory manager will take control of the relevant general insurer; and
(b) APRA considers that it is necessary for an Insurance Act statutory manager to take control of the target body corporate, in order to facilitate the resolution of any of the following:
(i) the relevant general insurer;
(ii) an authorised NOHC of the relevant general insurer;
(iii) a relevant group of bodies corporate of which the relevant general insurer is a member;
(iv) a particular member or particular members of such a group.
(7) The condition in this subsection is satisfied if:
(a) there is an external administrator of the target body corporate, or APRA considers that, in the absence of external support:
(i) the target body corporate may become unable to meet its obligations; or
(ii) the target body corporate may suspend payment; and
(b) APRA considers that it is necessary to take an action mentioned in subsection (4) in respect of the target body corporate in order to enable the relevant general insurer to maintain its operations , or in order to facilitate the resolution of any of the following:
(i) the relevant general insurer;
(ii) an authorised NOHC of the relevant general insurer;
(iii) a relevant group of bodies corporate of which the relevant general insurer is a member;
(iv) a particular member or particular members of such a group.
(8) If:
(a) APRA is in control of a body corporate's business under this Subdivision--APRA is the Insurance Act statutory manager of the body corporate; or
(b) an administrator appointed by APRA is in control of a body corporate's business under this Subdivision--the administrator is the Insurance Act statutory manager of the body corporate.
Note: This section and other provisions relating to statutory management do not apply to the aspects described in subsection 62ZVA(1) of the business and management of a foreign general insurer.
(9) If APRA appoints 2 or more Insurance Act statutory managers of a body corporate, or appoints one or more additional Insurance Act statutory managers of a body corporate:
(a) the functions and powers under this Act of an Insurance Act statutory manager of the body corporate may be performed or exercised by:
(i) all of the Insurance Act statutory managers of the body corporate acting jointly; or
(ii) each of the Insurance Act statutory managers of the body corporate acting individually (except to the extent (if any) specified in a notice given by APRA under paragraph (b)); and
(b) at the time of appointment, APRA may give all of the Insurance Act statutory managers of the body corporate a notice in writing for the purposes of subparagraph (a)(ii), specifying limits or conditions on their ability to perform functions and exercise powers individually; and
(c) treat a reference in this Act to an Insurance Act statutory manager as being a reference to whichever one or more of those Insurance Act statutory managers the case requires.
62ZOB Start of control of body corporate's business by Insurance Act statutory manager
(1) After the decision that an Insurance Act statutory manager will take control of a body corporate's business is made, APRA must give the body corporate written notice that the Insurance Act statutory manager will take, or is taking, control of the business.
Note: Subsections 62ZOQ(4) and 62ZOZA(3) also require APRA to give notice of the taking of control.
(2) An Insurance Act statutory manager takes control of a body corporate's business:
(a) at the time specified in a notice under this section as the time when the Insurance Act statutory manager takes control of the business (which must not be earlier than the notice is given); or
(b) if a notice under this section does not specify a time as the time when the Insurance Act statutory manager takes control of the business--at the time the notice is given.
(3) A notice under subsection (1) is not a legislative instrument.
62ZOC Insurance Act statutory managers--termination of control
Conditions necessary for termination of control
(1) If APRA assumes control of a body corporate's business or appoints an administrator of a body corporate's business, APRA must ensure that either it or an administrator of the body corporate's business has control of the body corporate's business until:
(a) APRA considers that it is no longer necessary for it or an administrator to remain in control of the body corporate's business; or
(b) APRA has applied for the body corporate to be wound up .
A termination of control that is permitted under this section is called an ultimate termination of control .
Note: This provision does not prevent a change, or changes, between control of a body corporate's business by APRA and an administrator or between administrators.
Events to precede termination
(2) Before making an ultimate termination of control by an Insurance Act statutory manager of a body corporate's business, APRA must:
(a) do both of the following:
(i) ensure that directors of the body corporate have been appointed or elected under the body corporate's constitution at a meeting called by the statutory manager in accordance with the body corporate's constitution;
(ii) if the body corporate is a foreign general insurer--appoint an agent in Australia for the purpose of section 118 by instrument in writing; or
(b) do both of the following:
(i) appoint directors of the body corporate by instrument in writing;
(ii) if the body corporate is a foreign general insurer--appoint an agent in Australia for the purpose of section 118 by instrument in writing; or
(c) ensure that a liquidator has been appointed:
(i) unless subparagraph (ii) applies--for the body corporate; or
(ii) if the body corporate is a foreign general insurer--for the body corporate in relation to its Australian business assets and liabilities.
Power to terminate control
(3) If the requirements in subsections (1) and (2) are satisfied, APRA may by instrument in writing make an ultimate termination of control of a body corporate's business by an Insurance Act statutory manager.
(4) If the Insurance Act statutory manager at the time of the termination is an administrator, the instrument of termination also operates as a termination of the appointment of the administrator. A copy of the instrument must be given to the administrator. However, mere failure to give the copy to the administrator does not affect the termination of the appointment.
Period of director's appointment
(5) If a director is elected or appointed under subsection (2), the director takes office on the termination of the Insurance Act statutory manager's control of the body corporate's business. If the director was appointed by APRA, the director holds office until the body corporate's next annual general meeting, subject to any terms and conditions imposed by APRA on the director's appointment. If the director was appointed or elected under the body corporate's constitution, the constitution governs the appointment.
Note: For further information about what happens when an Insurance Act statutory manager is in control of a body corporate's business, see Subdivision B.
Subdivision B -- Provisions dealing with control of a body corporate's business by an Insurance Act statutory manager
62ZOD Insurance Act statutory manager's powers and functions
Insurance Act statutory manager's powers and functions include powers and functions of board
(1) An Insurance Act statutory manager has the powers and functions of the members of the board of directors of the body corporate (collectively and individually), including the board's powers of delegation.
Note: When an Insurance Act statutory manager takes control of the business of a body corporate, the directors of the body corporate cease to hold office (see section 62ZOP).
Insurance Act statutory manager's power to obtain information
(2) An Insurance Act statutory manager may, for the purposes of this Division, require a person who has, at any time, been an officer of the body corporate to give the Insurance Act statutory manager any information relating to the business of the body corporate that the Insurance Act statutory manager requires. A requirement to give information may include a requirement to produce books, accounts or documents.
(3) A person who is or has been an officer of a body corporate commits an offence if:
(a) there is an Insurance Act statutory manager in relation to the body corporate; and
(b) under subsection (2), the Insurance Act statutory manager requires the person to give information or to produce books, accounts or documents; and
(c) the person fails to comply with the requirement.
Penalty: Imprisonment for 12 months.
Note 1: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.
Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.
(4) An individual is not excused from complying with a requirement under subsection (2) to give information on the ground that doing so would tend to incriminate the individual or make the individual liable to a penalty.
(5) If:
(a) before giving information in compliance with a requirement under subsection (2), an individual claims that giving the information might tend to incriminate the individual or make the individual liable to a penalty; and
(b) giving the information might in fact tend to incriminate the individual or make the individual so liable;
the information given in compliance with the requirement is not admissible in evidence against the individual in a criminal proceeding or a proceeding for the imposition of a penalty, other than a proceeding in respect of the falsity of the information.
(6) Subsections (4) and (5) apply to the production of books, accounts or documents in a corresponding way to the way in which they apply to the giving of information.
Insurance Act statutory manager's power to sell whole or part of body corporate's business
(7) An Insurance Act statutory manager may sell or otherwise dispose of the whole or any part of the body corporate's business. The sale or disposal may occur on any terms and conditions that the Insurance Act statutory manager considers appropriate.
Insurance Act statutory manager's powers to alter body corporate's constitution etc.
(8) An Insurance Act statutory manager may, if the body corporate concerned is registered under the Corporations Act 2001 , alter the body corporate's constitution, rules or other arrangements for governance if the alteration:
(a) is necessary or convenient for enabling or facilitating the performance of the Insurance Act statutory manager's functions and duties, or the exercise of the Insurance Act statutory manager's other powers, under this Division in relation to the body corporate; and
(b) promotes:
(i) the protection of the policyholders of the body corporate; and
(ii) financial system stability in Australia.
(9) An Insurance Act statutory manager may do an act under subsection (7) or (8) despite:
(a) the Corporations Act 2001 ; and
(b) the body corporate's constitution; and
(c) any contract or arrangement to which the body corporate is party; and
(d) any listing rules of a financial market in whose official list the body corporate is included.
Interpretation
(10) In this section:
"officer " has the meaning given by section 9 of the Corporations Act 2001 .
62ZOE Safeguards on exercise of Insurance Act statutory manager's powers and functions
(1) Despite anything else in this Subdivision, an Insurance Act statutory manager of a body corporate (the body corporate under management ) may not perform a function or exercise a power under section 62ZOD if:
(a) either or both of subsections (2) and (3) apply; and
(b) the performance of the function or the exercise of the power is not for the purposes of:
(i) an act of the Insurance Act statutory manager under subsection 62ZOF(1); or
(ii) Part 3 or 4 of the Financial Sector (Transfer and Restructure) Act 1999 .
(2) This subsection applies if:
(a) the body corporate under management is not a general insurer; and
(b) the performance or the exercise would result in:
(i) the provision of services by the body corporate under management to a related body corporate of the body corporate under management; or
(ii) the provision of services by a related body corporate of the body corporate under management to the body corporate under management; or
(iii) subject to subsection (4), the transfer of assets between the body corporate under management and another body corporate (otherwise than in the ordinary course of business); and
(c) the performance or the exercise is not required or permitted by a binding arrangement that was in existence immediately before the Insurance Act statutory manager started to be in control of the business of the body corporate under management; and
(d) the provision or transfer is not for fair value.
(3) This subsection applies if:
(a) the body corporate under management is an authorised NOHC of a general insurer; and
(b) the performance or the exercise requires using funds of the body corporate or a subsidiary of the body corporate to increase the level of capital of the general insurer to a specified level; and
(c) the shareholders of the body corporate have not agreed, by ordinary resolution, to that use of the funds.
(4) Treat the requirement in subparagraph (2)(b)(iii) as not being met if:
(a) the body corporate under management is an authorised NOHC of a general insurer; and
(b) the transfer of assets mentioned in that subparagraph is a transfer of funds to increase the level of capital of the general insurer to a specified level; and
(c) the shareholders of the body corporate have agreed, by ordinary resolution, to that use of the funds.
62ZOF Insurance Act statutory manager's additional powers to facilitate recapitalisation
Powers
(1) An Insurance Act statutory manager of a body corporate that is a company that has a share capital and is registered under the Corporations Act 2001 may do one or more of the following acts on terms determined by the Insurance Act statutory manager:
(a) issue shares, or rights to acquire shares, in the company;
(b) cancel shares, or rights to acquire shares, in the company;
(c) reduce the company's share capital by cancelling any paid-up share capital that is not represented by available assets;
(d) sell shares, or rights to acquire shares, in the company;
(e) vary or cancel rights or restrictions attached to shares in a class of shares in the company.
Note: Before doing such an act, the Insurance Act statutory manager will usually need to get and consider a report on the fair value of each share or right concerned: see section 62ZOG.
Giving company members notice of exercise of powers
(2) As soon as practicable after doing an act described in paragraph (1)(a), (b), (c) or (e) or subsection (3), the Insurance Act statutory manager must give written notice to the persons who were members (under section 231 of the Corporations Act 2001 ) of the company just before the act, identifying the act and explaining its effect on their interests as members.
(3) One of the acts to which subsection (2) relates is the offering of shares, or rights to acquire shares, in the company for sale under paragraph (1)(d).
Exercise of powers despite other laws etc.
(4) An Insurance Act statutory manager may do an act under subsection (1) despite:
(a) the Corporations Act 2001 ; and
(b) the company's constitution; and
(c) any contract or arrangement to which the company is party; and
(d) any listing rules of a financial market in whose official list the company is included.
Section does not apply to foreign general insurers etc.
(5) This section does not apply in relation to a body corporate that is:
(a) a foreign general insurer; or
(b) a subsidiary of a foreign general insurer; or
(c) an authorised NOHC of a foreign general insurer.
62ZOG Considering report before acting under section 62ZOF
Getting and considering report on fair value of shares or rights
(1) Before determining terms for an act under subsection 62ZOF(1), the Insurance Act statutory manager must:
(a) obtain a report meeting the requirements in subsection (2) of this section on the fair value of the shares or rights concerned from an expert who is not an associate of the statutory manager, or of the company, under Division 2 of Part 1.2 of the Corporations Act 2001 ; and
(b) consider the report;
unless APRA determines under subsection (8) that this subsection does not apply in relation to that act relating to those shares or rights.
Content of report
(2) The report must set out:
(a) the amount that is, in the expert's opinion, the fair value for each share or right concerned; and
(b) the reasons for forming the opinion; and
(c) any relationship between the expert and any of the following persons:
(i) the Insurance Act statutory manager;
(ii) a person who is an associate of the Insurance Act statutory manager under Division 2 of Part 1.2 of the Corporations Act 2001 ;
(iii) the body corporate;
(iv) a person who is an associate of the body corporate under Division 2 of Part 1.2 of the Corporations Act 2001 ;
including any circumstances in which the expert gives them advice, or acts on their behalf, in the proper performance of the functions attaching to the expert's professional capacity or business relationship with them; and
(d) any financial or other interest of the expert that could reasonably be regarded as being capable of affecting the expert's ability to give an unbiased opinion in relation to the matter being reported on.
Determining fair value of shares
(3) In determining for the purposes of paragraph (2)(a) the amount that is, in the expert's opinion, the fair value for each share concerned, the expert must:
(a) first, assess the value of the company as a whole, in accordance with the assumptions (if any) notified to the expert by the Minister for the valuation of the company; and
(b) then allocate that value among the classes of shares in the company that either have been issued or that the Insurance Act statutory manager proposes to issue (taking into account the relative financial risk, and voting and distribution rights, of the classes); and
(c) then allocate the value of each class pro rata among the shares in that class that either have been issued or that the Insurance Act statutory manager proposes to issue (without allowing a premium or applying a discount for particular shares in that class).
Assumptions for valuation of company
(4) The Minister may give the expert written notice of assumptions for the valuation of the company. The Minister may, by further written notice given to the expert, revoke, but not vary, notice of the assumptions. A notice under this subsection is not a legislative instrument.
Determining fair value of rights
(5) In determining for the purposes of paragraph (2)(a) the amount that is, in the expert's opinion, the fair value for each right concerned, the expert must act in accordance with the assumptions (if any) notified to the expert by the Minister for the valuation of the right.
Assumptions for valuation of rights
(6) The Minister may give the expert written notice of assumptions for the valuation of the rights concerned. The Minister may, by further written notice given to the expert, revoke, but not vary, notice of the assumptions. A notice under this subsection is not a legislative instrument.
Contravention does not invalidate act
(7) A contravention of subsection (1), (2), (3), (5) or (9) does not affect the validity of anything done under section 62ZOF.
Exemption from subsection (1)
(8) APRA may determine in writing that subsection (1) does not apply in relation to an act relating to shares or rights if APRA is satisfied that delaying the act to enable compliance with that subsection in relation to the act would detrimentally affect:
(a) policyholders with:
(i) if the company is a general insurer--the general insurer; or
(ii) if the company is not a general insurer--the relevant general insurer mentioned in subsection 62ZOA(3); and
(b) financial system stability in Australia.
(9) APRA must:
(a) publish a copy of a determination under subsection (8) in the Gazette ; and
(b) give a copy of a determination under subsection (8) to the Insurance Act statutory manager concerned (unless that manager is APRA).
(10) A determination made under subsection (8) is not a legislative instrument.
62ZOH Act under section 62ZOF not ground for denying obligation
(1) This section applies if a body corporate is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(2) None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:
(a) deny any obligation under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
(3) The matters are as follows:
(a) an Insurance Act statutory manager of the body corporate doing an act under subsection 62ZOF(1) relating to the body corporate;
(b) if the body corporate is a member of a relevant group of bodies corporate--an Insurance Act statutory manager of another member of the group doing an act under subsection 62ZOF(1) in relation that other member.
62ZOI APRA may require a person to give information etc. for the purposes of this Division
APRA may require person to give information etc.
(1) APRA may require a person, by written notice given to the person, to give APRA information, or documents containing information, relating to the business of a body corporate that has an Insurance Act statutory manager if:
(a) in a case where the Insurance Act statutory manager is APRA:
(i) APRA believes, on reasonable grounds, that the person has such information or documents; and
(ii) APRA requires the information or documents for the purposes of this Division; and
(b) in a case where the Insurance Act statutory manager is not APRA:
(i) the Insurance Act statutory manager requests, in writing, that APRA require the person to give the information or documents under this subsection; and
(ii) APRA believes, on reasonable grounds, that the person has such information or documents; and
(iii) APRA is satisfied that the Insurance Act statutory manager requires the information or documents for the purposes of this Division.
(2) The notice:
(a) must specify a period within which the information or documents must be given to APRA; and
(b) may specify the form and manner in which the information or documents must be given to APRA.
(3) The period specified under paragraph (2)(a) must be reasonable in all the circumstances.
Offence
(4) A person commits an offence if:
(a) APRA requires the person to give APRA information or documents under subsection (1); and
(b) the person refuses or fails to give the information or documents as required.
Penalty: Imprisonment for 12 months or 50 penalty units, or both.
Self-incrimination
(5) A person is not excused from complying with a requirement under subsection (1) to give information or documents on the ground that doing so would tend to incriminate the individual or make the individual liable to a penalty.
(6) However, in the case of an individual:
(a) the information or document given; and
(b) giving the information or document; and
(c) any information, document or thing obtained as a direct or indirect consequence of giving the information or document;
are not admissible in evidence against the individual in a criminal proceeding or a proceeding for the imposition of a penalty, other than a proceeding in respect of the falsity of the information or document.
Section 62ZOD not limited
(7) This section does not limit section 62ZOD.
62ZOJ Administrator in control--additional powers to recommend action by APRA
Types of recommendation
(1) An administrator of a body corporate's business may make any of the following recommendations to APRA, by instrument in writing given to APRA:
(a) that APRA make a particular direction under subsection 62ZOM(3) or Division 2 of Part IX in respect of the body corporate;
(b) that APRA apply for the body corporate to be wound up;
(c) if the body corporate is a general insurer--that APRA revoke the general insurer's authorisation under section 12;
(d) if the body corporate is an authorised NOHC--that APRA revoke the authorised NOHC's authorisation under section 18.
Effect of recommendation
(2) If an administrator of a body corporate's business makes a recommendation under this section, APRA must consider the recommendation but is not required to act on it.
62ZOK Insurance Act statutory manager's liabilities and duties
Immunity
(1) An Insurance Act statutory manager, or a person acting on behalf of an Insurance Act statutory manager, is not subject to any liability (whether civil or criminal) in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on the Insurance Act statutory manager by or under this Act.
(2) Subsection (1) does not apply to an act or omission in bad faith.
(3) To avoid doubt, an Insurance Act statutory manager is not liable under section 588G of the Corporations Act 2001 in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on the Insurance Act statutory manager by or under this Act. This subsection does not limit the scope of subsection (1).
Signpost to secrecy obligations
(4) Part 6 of the Australian Prudential Regulation Authority Act 1998 prohibits certain disclosures of information received by Insurance Act statutory managers under this Act.
62ZOL Transaction by Insurance Act statutory manager not voidable under section 588FE of the Corporations Act 2001
A transaction of a body corporate is not voidable under section 588FE of the Corporations Act 2001 merely because:
(a) the transaction was entered into at a time when an Insurance Act statutory manager was in control of the body corporate's business; and
(b) the transaction is:
(i) an uncommercial transaction (within the meaning of that Act) of the body corporate; or
(ii) an unfair preference (within the meaning of that Act) given by the body corporate to a creditor of the company; or
(iii) an insolvent transaction (within the meaning of that Act) of the body corporate.
62ZOM Administrator in control--additional duties
Duty to report to APRA on request
(1) A person who is an administrator of a body corporate's business must give to APRA a written report showing how the control of the body corporate's business is being carried out if APRA requests that such a report be provided to it. The report must be given to APRA within a reasonable time after the request.
Duty to report to APRA on termination of appointment
(2) A person who was an administrator of a body corporate's business must give to APRA a written report showing how the control of the body corporate's business was carried out over the period of the administrator's appointment if the administrator's appointment has been terminated. The report must be given to APRA within a reasonable time of the termination.
Duty to follow directions by APRA
(3) APRA may give an administrator of a body corporate's business a direction relating to the control of the body corporate's business, and may alter such a direction. If a direction (including an altered direction) is given to an administrator by APRA, the administrator must:
(a) act in accordance with the direction; or
(b) immediately provide to APRA information relating to the control of the body corporate's business and request APRA to alter the direction.
(4) If an administrator of a body corporate's business requests APRA to alter a direction and APRA considers the request then confirms the direction, the administrator must act in accordance with the direction.
(1) If an administrator of a body corporate's business has reasonable cause to believe that an action that the administrator proposes to take is an action that is likely to have a detrimental effect on financial system stability in Australia, the administrator must:
(a) notify APRA as soon as practicable; and
(b) obtain APRA's written consent before taking the action.
(2) The administrator is not required to comply with subsection (1) if the administrator is satisfied that it is not reasonably practicable to do so, having regard to urgency or other similar constraint.
(3) The performance of a function or the exercise of a power by an administrator is not invalid merely because of a failure by the administrator to comply with this section.
62ZOO Termination of Insurance Act statutory manager's appointment
(1) APRA may terminate the appointment of an administrator of a body corporate's business and either appoint another person as administrator of the body corporate's business or itself take control of the body corporate's business if:
(a) the administrator contravenes a requirement of this Division; or
(b) APRA considers such action necessary to:
(i) facilitate the resolution of the body corporate, a relevant group of bodies corporate of which the body corporate is a member, or another member of such a group; or
(ii) if the body corporate is a general insurer--protect the interests of policyholders of the general insurer; or
(iii) promote financial system stability in Australia.
(2) If:
(a) APRA is the statutory manager of a body corporate; and
(b) the requirement in paragraph (1)(b) is satisfied;
it may cease to be the statutory manager of the body corporate and appoint a person as administrator of the body corporate's business.
(3) This section has effect subject to section 62ZOC.
62ZOP Effect on directors of Insurance Act statutory manager taking control of a body corporate's business
(1) The directors of a body corporate cease to hold office when an Insurance Act statutory manager takes control of the body corporate's business.
Note: For the definition of director , see subsection (10).
(2) A director of a body corporate must not be appointed or elected while an Insurance Act statutory manager is in control of the body corporate's business unless the appointment is made under subsection 62ZOC(2).
(3) The appointment of an agent of a body corporate under section 118 ceases to have effect when an Insurance Act statutory manager takes control of the body corporate's business.
(4) A person must not be appointed as an agent of a body corporate under section 118 while an Insurance Act statutory manager is in control of the body corporate's business unless the appointment is made under subsection 62ZOC(2).
(5) If a person who ceased to hold office as a director of a body corporate under subsection (1), or a purported director of a body corporate appointed or elected in contravention of subsection (2), purports to act in relation to the body corporate's business while an Insurance Act statutory manager has control of the body corporate's business, those acts are invalid and of no effect.
(6) If a person whose appointment as an agent of a body corporate under section 118 ceased to have effect under subsection (3) purports to act in relation to the body corporate's business while an Insurance Act statutory manager has control of the body corporate's business, those acts are invalid and of no effect.
(7) Subsections (1), (2) and (5) do not apply in relation to a body corporate that is a foreign general insurer.
(8) Subsection (9) applies if:
(a) subsections (1), (2) and (5) do not apply in relation to a body corporate because of subsection (7); and
(b) an Insurance Act statutory manager takes control of the body corporate's business; and
(c) a director of the body corporate acts, or purports to act in relation to the body corporate's business while the Insurance Act statutory manager has control of the body corporate's business.
(9) Those acts are invalid and of no effect to the extent that they relate to:
(a) the Australian business assets and liabilities of the body corporate; or
(b) the management of the body corporate, to the extent that the management relates to the Australian business assets and liabilities of the body corporate.
(10) For the purposes of this section, director has the same meaning as it has in the Corporations Act 2001 .
62ZOQ Effect on external administrator of Insurance Act statutory manager taking control of a body corporate's business
(1) The appointment of an external administrator of a body corporate is terminated when an Insurance Act statutory manager takes control of the body corporate's business.
Note: For the definition of external administrator , see subsection 3(1).
(2) An external administrator of a body corporate must not be appointed while an Insurance Act statutory manager is in control of the body corporate's business unless APRA approves the appointment.
(3) If a person who ceased to be the external administrator of a body corporate under subsection (1), or a purported external administrator of the body corporate appointed in contravention of subsection (2), purports to act in relation to the body corporate's business while an Insurance Act statutory manager has control of the body corporate's business, those acts are invalid and of no effect.
(4) APRA must inform the external administrator of a body corporate that an Insurance Act statutory manager will take control of the body corporate's business as soon as possible after the decision that an Insurance Act statutory manager will take control of the body corporate's business is made. However, failure to inform the external administrator does not affect the operation of this section.
62ZOR Moratorium--effect of Insurance Act statutory management on court and tribunal proceedings
(1) A person cannot begin or continue a proceeding in a court or tribunal covered by subsection (8) in respect of a body corporate if an Insurance Act statutory manager is in control of the body corporate's business.
(2) Subsection (1) does not apply if:
(a) the court or tribunal grants leave for the proceedings to be begun or continued on the ground that the person would be caused hardship if leave were not granted; and
(b) the beginning or continuing of the proceedings is in accordance with such terms (if any) as the court or tribunal imposes.
(3) A person intending to apply for leave of the court or tribunal under paragraph (2)(a) must give APRA at least 10 days notice of the intention to apply (or a shorter period, if the court or tribunal considers that exceptional circumstances make this necessary).
(4) APRA may apply to the court or tribunal to be joined as a party to the proceedings for leave. If APRA is joined as a party, the court or tribunal must have regard to APRA's views in deciding:
(a) whether to grant leave under paragraph (2)(a); and
(b) if the court or tribunal decides to grant the leave--whether to impose terms as mentioned in paragraph (2)(b); and
(c) if the court or tribunal decides to impose such terms--the nature of those terms.
(5) Subsection (1) also does not apply if:
(a) APRA consents in writing to the proceedings beginning or continuing; or
(b) the Insurance Act statutory manager, after considering APRA's views, consents to the proceedings beginning or continuing.
(6) APRA (or the Insurance Act statutory manager) cannot revoke a consent given for the purposes of subsection (5).
(7) Neither APRA nor the Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (5).
(8) A proceeding in a court or tribunal is covered by this subsection in respect of a body corporate if it is any of the following:
(a) a proceeding against the body corporate (including a cross-claim or third party claim against the body corporate);
(b) a proceeding in relation to property of the body corporate;
(c) a proceeding to enforce any security (including a mortgage or charge) granted by the body corporate, or by a related body corporate of the body corporate, over any property that the body corporate owns, uses, possesses, occupies or in which the body corporate otherwise has an interest.
(9) Subsection (8) does not cover a proceeding in respect of an offence or a contravention of a provision of a law for which a pecuniary penalty (however described) may be imposed.
(10) In this section, a reference to a tribunal includes a reference to the following:
(a) an industrial tribunal;
(b) an arbitral tribunal.
62ZOS Moratorium--effect of Insurance Act statutory management on enforcement process regarding property
(1) No enforcement process in relation to property of a body corporate can be begun or proceeded with if an Insurance Act statutory manager is in control of the body corporate's business.
(2) Subsection (1) does not apply if:
(a) the Federal Court grants leave for the process to be begun or continued on the ground that the person would be caused hardship if leave were not granted; or
(b) the beginning or continuing of the process is in accordance with such terms (if any) as the Court imposes.
(3) A person intending to apply for leave of the Federal Court under paragraph (2)(a) must give APRA at least 10 days notice of the intention to apply (or a shorter period, if the Court considers that exceptional circumstances make this necessary).
(4) APRA may apply to the Federal Court to be joined as a party to the proceedings for leave. If APRA is joined as a party, the Federal Court must have regard to APRA's views in deciding:
(a) whether to grant leave under paragraph (2)(a); and
(b) if the Court decides to grant the leave--whether to impose terms as mentioned in paragraph (2)(b); and
(c) if the Court decides to impose such terms--the nature of those terms.
(5) Subsection (1) also does not apply if:
(a) APRA consents to the process beginning or continuing; or
(b) the Insurance Act statutory manager consents to the process beginning or continuing.
(6) APRA (or the Insurance Act statutory manager) cannot revoke a consent given for the purposes of subsection (5).
(7) Neither APRA nor the Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (5).
62ZOT Moratorium--effect of Insurance Act statutory management on disposal of property
(1) A person must not dispose of property if:
(a) the property is owned by another person; and
(b) the other person is a body corporate; and
(c) an Insurance Act statutory manager is in control of the body corporate's business.
Note: The Federal Court may grant an injunction under section 129D in respect of a contravention of this subsection.
(2) Subsection (1) does not apply if:
(a) APRA consents to the disposal; or
(b) the Insurance Act statutory manager consents to the disposal.
(3) Neither APRA nor the Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (2).
62ZOU Moratorium--Restrictions on exercise of third party property rights
(1) Section 440B of the Corporations Act 2001 applies during a period in which an Insurance Act statutory manager is in control of a body corporate's business in the same way it applies during the administration of a company.
(2) For the purposes of this section, treat the reference in paragraph 440B(2)(a) of the Corporations Act 2001 to the administrator's written consent as being a reference to:
(a) the Insurance Act statutory manager's written consent; or
(b) APRA's written consent.
(3) Neither APRA nor an Insurance Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent as mentioned in subsection (2).
(4) This section applies despite sections 62ZOR, 62ZOS and 62ZOT.
62ZOV Moratorium--effect of Insurance Act statutory management on supply of essential services
(1) If:
(a) an Insurance Act statutory manager is in control of a body corporate's business; and
(b) the Insurance Act statutory manager requests, or authorises someone else to request, a person or authority (the supplier ) to supply an essential service to the body corporate in Australia; and
(c) the body corporate owes an amount to the supplier in respect of the supply of the essential service before the day on which the Insurance Act statutory manager took control of the body corporate's business;
the supplier must not:
(d) refuse to comply with the request for the reason only that the amount is owing; or
(e) make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid.
Note: The Federal Court may grant an injunction under section 129D in respect of a contravention of this subsection.
(2) In this section:
"essential service " has the same meaning as in section 600F of the Corporations Act 2001.
62ZOW Moratorium--effect of Insurance Act statutory management on annual general meeting
(1) This section applies to a body corporate that is required under section 250N or section 601BR of the Corporations Act 2001 to hold an annual general meeting within a particular period.
(2) Despite section 250N and section 601BR of that Act, if an Insurance Act statutory manager is in control of the body corporate's business at the end of that period, the body corporate need not hold that annual general meeting.
62ZOX Insurance Act statutory manager being in control not grounds for denial of obligations
(1) This section applies if a body corporate is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(2) None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:
(a) deny any obligation under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
(3) The matters are as follows:
(a) an Insurance Act statutory manager being in control, or being appointed to take control, of the business of the body corporate;
(b) if the body corporate is a member of a relevant group of bodies corporate--an Insurance Act statutory manager being in control, or being appointed to take control, of the business of another member of the group.
62ZOY Application of other provisions
(1) None of the matters mentioned in subsection (2) affect:
(a) the continued operation of other provisions of this Act or the operation of the Financial Sector (Collection of Data) Act 2001 in relation to a body corporate; or
(b) the obligation of a body corporate to comply with those other provisions and that Act.
(2) The matters are as follows:
(a) the appointment of an Insurance Act statutory manager of the body corporate's business under this Division;
(b) the fact that an Insurance Act statutory manager is in control of the body corporate's business.
(3) The Public Governance, Performance and Accountability Act 2013 does not apply to a body corporate that has an Insurance Act statutory manager.
62ZOZ Costs of statutory management
(1) APRA's costs (including costs in the nature of remuneration and expenses) of being in control of a body corporate's business, or of having an administrator in control of a body corporate's business, are payable from the body corporate's funds and are a debt due to APRA.
(2) Despite anything contained in any law relating to the winding-up of companies, debts due to APRA by a body corporate under subsection (1) have priority in a winding-up of the body corporate over all other unsecured debts.
62ZOZA APRA must report to Treasurer and publish information about statutory management
Reports to the Treasurer
(1) If the Treasurer requests APRA to give him or her a written report concerning the activities of Insurance Act statutory managers in respect of specified body corporates or in respect of a specified period, APRA must give the Treasurer such a written report within a reasonable time after the Treasurer requests it.
(2) If an Insurance Act statutory manager takes control of a body corporate's business during a financial year, or if there is an ultimate termination of control during a financial year, APRA must give the Treasurer a written report within a reasonable time after the end of the financial year concerning activities of all Insurance Act statutory managers and each ultimate termination of control that occurred during that financial year.
Requirement to publish notices in Gazette
(3) If APRA:
(a) takes control of a body corporate's business; or
(b) appoints an administrator of a body corporate's business; or
(c) makes an ultimate termination of control in respect of a body corporate's business;
APRA must publish notice of that fact in the Gazette . However, mere failure to publish such a notice does not affect the validity of the act.
62ZOZB Exceptions to Part IV of the Competition and Consumer Act 2010
For the purposes of subsection 51(1) of the Competition and Consumer Act 2010 , the following things are specified and specifically authorised:
(a) the acquisition of assets in:
(i) a sale or disposal of the whole or part of the business of a body corporate under this Division by an Insurance Act statutory manager in control of the body corporate's business; or
(ii) a transfer of insurance business of a general insurer under a scheme prepared by an Insurance Act statutory manager in control of the general insurer's business and confirmed (with or without modifications) by the Federal Court under Division 3A of Part III;
(whether the assets are shares in another body corporate or other assets);
(b) the acquisition of shares in a body corporate as a direct result of:
(i) the issue or sale of the shares under this Division by an Insurance Act statutory manager in control of the body corporate's business; or
(ii) the exercise of a right to acquire shares that was issued or sold under this Division by an Insurance Act statutory manager in control of the body corporate's business.
59 Section 62ZQ
Repeal the section, substitute:
62ZQ Involving APRA in proposed appointment of external administrators of general insurers and NOHCs
(1) At least one week before a person other than APRA:
(a) makes an application to a court under Chapter 5 of the Corporations Act 2001 for the appointment of an external administrator of a general insurer or of an authorised NOHC of a general insurer; or
(b) makes another kind of application (whether or not to a court) for the appointment of an external administrator of a general insurer or of an authorised NOHC of a general insurer; or
(c) appoints an external administrator of a general insurer or of an authorised NOHC of a general insurer (otherwise than as the result of an application made by another person);
the person must give APRA written notice that the person proposes to make the application or appointment.
(2) If there is an approved form for the notice, the person must give the notice in the approved form.
(3) Subsection (1) does not apply if APRA gives the person written notice, before the person makes the application or appointment, that APRA consents to the person making the application or appointment.
(4) APRA is entitled to be heard on the application.
(5) After receiving the notice, APRA may request the person to provide details of the proposed application.
Offence
(6) A person (other than APRA) commits an offence if:
(a) the person:
(i) makes an application to a court under Chapter 5 of the Corporations Act 2001 for the appointment of an external administrator of a general insurer or of an authorised NOHC of a general insurer; or
(ii) makes another kind of application (whether or not to a court) for the appointment of an external administrator of a general insurer or of an authorised NOHC of a general insurer; or
(iii) appoints an external administrator of a general insurer or of an authorised NOHC of a general insurer (otherwise than as the result of an application made by another person); and
(b) APRA did not give the person written notice, before the person made the application or appointment, of APRA's consent to the person making the application or appointment, in accordance with subsection (3); and
(c) at least one week before making the application or appointment:
(i) if there is an approved form for the purposes of this paragraph--the person did not give APRA notice in the approved form indicating that the person proposed to make the application or appointment; or
(ii) otherwise--the person did not give APRA written notice indicating that the person proposed to make the application or appointment.
Penalty: 60 penalty units.
(7) An offence against subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code .
60 Subsection 62ZR(1)
Omit "the winding-up of a general insurer", substitute "the winding-up of an entity covered by subsection (4), or the proposed winding-up of an entity covered by subsection (4)".
61 At the end of section 62ZR
Add:
(4) This subsection covers the following entities:
(a) a general insurer;
(b) an authorised NOHC;
(c) a subsidiary of a general insurer or authorised NOHC.
62 Subsection 62ZS(1)
Repeal the subsection, substitute:
(1) APRA may apply to the Federal Court for directions regarding any matter arising under:
(a) the winding-up of an entity covered by subsection 62ZR(4) (whether the winding-up occurs as a result of an application made under the Corporations Act 2001 or by APRA under Division 3 of this Part); or
(b) the proposed winding-up of an entity covered by subsection 62ZR(4) (whether the winding-up will occur as a result of an application made, or proposed to be made, under the Corporations Act 2001 or by APRA under Division 3 of this Part).
63 Subsection 62ZT(1)
Repeal the subsection, substitute:
(1) APRA may request a liquidator of an entity covered by subsection 62ZR(4) in writing to give APRA, within a reasonable time specified in the request, specified information in writing about:
(a) the winding-up of the entity (whether the winding-up occurs as a result of an application made under the Corporations Act 2001 or by APRA under Division 3 of this Part) and the other affairs of the general insurer; or
(b) the proposed winding-up of the entity (whether the winding-up will occur as a result of an application made, or proposed to be made, under the Corporations Act 2001 or by APRA under Division 3 of this Part) and the other affairs of the general insurer.
64 At the end of section 62ZU
Add:
(3) To avoid doubt, subsection (1) applies whether or not an Insurance Act statutory manager is in control of:
(a) unless paragraph (b) applies--the general insurer's business; or
(b) if the general insurer is a foreign general insurer--the Australian business assets and liabilities of the foreign general insurer.
65 At the end of section 62ZV
Note: APRA may choose to apply under section 62ZU for an order that a general insurer be wound up. Alternatively, APRA may choose to apply under the Corporations Act 2001 for an order that the general insurer be wound up (for example, under section 459P or 462 of that Act).
66 At the end of Part VB
Add:
Division 4 -- Special provisions relating to foreign general insurers
62ZVA Limited application of Divisions 1, 1A and 2 to foreign general insurers
(1) Divisions 1, 1A and 2 do not apply in relation to:
(a) business of a foreign general insurer (other than Australian business assets and liabilities); or
(b) the management of a foreign general insurer, to the extent that the management relates to such business of the foreign general insurer.
(2) Subsection 62T(3) does not apply to the issue of policies by a foreign general insurer in the course of insurance business carried on outside Australia by the foreign general insurer.
(3) In this section:
"asset " has the same meaning as in the Financial Sector (Transfer and Restructure) Act 1999 .
"Australian business assets and liabilities " , of a foreign general insurer, means the following:
(a) the assets and liabilities of the foreign general insurer in Australia;
(b) any other assets and liabilities of the foreign general insurer that:
(i) are related to its operations in Australia; and
(ii) if regulations are made for the purposes of this subparagraph--are of a kind specified in those regulations.
"liability " has the same meaning as in the Financial Sector (Transfer and Restructure) Act 1999 .
67 After subparagraph 62ZW(a)(i)
Insert:
(ia) that is under statutory management under Division 1A of Part VB; or
68 At the end of section 62ZW
Add:
; and (d) allows APRA to facilitate a transfer of business from the declared general insurer to a receiving body under the Financial Sector (Transfer and Restructure) Act 1999 by entitling the receiving body to amounts in respect of the protected policies.
69 Paragraph 62ZZC(1)(a)
Repeal the paragraph, substitute:
(a) any of the following requirements are satisfied:
(i) the general insurer is under judicial management under Division 1 of Part VB;
(ii) the general insurer is under statutory management under Division 1A of Part VB;
(iii) an external administrator for the general insurer has been appointed under Chapter 5 of the Corporations Act 2001 ; and
70 Subsection 62ZZC(1) (note 2)
After "the judicial management" insert "or statutory management".
71 After section 62ZZF
Insert:
62ZZFA Interim claims and payments for section 62ZZF entitlements
(1) This section applies if:
(a) a person makes a claim under insurance cover provided under a protected policy, in the approved form (if any), within the period mentioned in paragraph 62ZZF(1)(b); and
(b) the person is not covered by a determination under section 62ZZ; and
(c) APRA becomes aware that the person has made an interim claim for payment of part or parts of the person's entitlement under section 62ZZF (whether or not the person has made a previous interim claim for such a payment); and
(d) APRA determines, under subsection (2), the amount of the interim claim mentioned in paragraph (c) that ought to be recognised as valid; and
(e) if the regulations prescribe conditions for the purposes of this paragraph--those conditions are met.
(2) For the purposes of paragraph (1)(d), APRA may determine, in writing, the amount of the interim claim mentioned in subsection (1)(c), to the extent that it ought to be recognised as valid.
(3) If the regulations prescribe conditions according to which APRA can make a determination under subsection (2), APRA can only make such a determination in accordance with those conditions.
(4) The person is entitled to be paid by APRA an amount equal to:
(a) unless paragraph (b) applies--the amount mentioned in paragraph (1)(d); or
(b) if the regulations prescribe limits, or methods for determining limits, for entitlements under this subsection--the lesser of:
(i) the amount mentioned in paragraph (1)(d); or
(ii) the applicable limit specified in or worked out in accordance with the regulations.
(5) If the person is entitled under subsection 62ZZF(2) or (3) to be paid an amount by APRA in respect of the claim mentioned in paragraph (1)(a), the person's entitlement under subsection (4) to be paid an amount discharges, to the extent of that amount, the person's entitlement under subsection 62ZZF(2) or (3).
72 Subsection 62ZZG(2) (note)
Omit "under section 51 of the Insurance Contracts Act 1984 ", substitute "under various provisions".
73 Subsection 62ZZG(3) (note 1)
Omit "under section 51 of the Insurance Contracts Act 1984 ", substitute "under various provisions".
74 Subsection 62ZZG(3) (note 2)
Omit "also".
75 After section 62ZZG
Insert:
62ZZGA Interim claims and payments for section 62ZZG entitlements
(1) This section applies if:
(a) a person makes a claim under insurance cover provided under a protected policy, in the approved form (if any), within the period mentioned in paragraph 62ZZG(1)(aa); and
(b) the person is not covered by a determination under section 62ZZ; and
(c) APRA becomes aware that the person has made an interim claim for payment of part or parts of the person's entitlement under section 62ZZG (whether or not the person has made a previous interim claim for such a payment); and
(d) APRA determines, under subsection (2), the amount of the interim claim mentioned in paragraph (c) that ought to be recognised as valid; and
(e) if the regulations prescribe conditions for the purposes of this paragraph--those conditions are met.
(2) For the purposes of paragraph (1)(d), APRA may determine, in writing, the amount of the interim claim mentioned in subsection (1)(c), to the extent that it ought to be recognised as valid.
(3) If the regulations prescribe conditions according to which APRA can make a determination under subsection (2), APRA can only make such a determination in accordance with those conditions.
(4) The person is entitled to be paid by APRA an amount equal to:
(a) unless paragraph (b) applies--the amount mentioned in paragraph (1)(d); or
(b) if the regulations prescribe limits, or methods for determining limits, for entitlements under this subsection--the lesser of:
(i) the amount mentioned in paragraph (1)(d); or
(ii) the applicable limit specified in or worked out in accordance with the regulations.
(5) If the person is entitled under subsection 62ZZG(2) or (3) to be paid an amount by APRA in respect of the claim mentioned in paragraph (1)(a), the person's entitlement under subsection (4) to be paid an amount discharges, to the extent of that amount, the person's entitlement under subsection 62ZZG(2) or (3).
76 Subsection 62ZZH(1)
Omit "62ZZF, 62ZZG,", substitute "62ZZF, 62ZZFA, 62ZZG, 62ZZGA,".
77 Subsection 62ZZH(1) (note)
Omit "62ZZF and 62ZZG", substitute "62ZZF, 62ZZFA, 62ZZG and 62ZZGA".
78 Subsection 62ZZJ(3)
Omit " section 51 of the Insurance Contracts Act 1984 , or section 601AG of the Corporations Act 2001 ,", substitute "any provision mentioned in subsection (4B)".
79 Paragraph 62ZZJ(4)(a)
Omit " section 51 of the Insurance Contracts Act 1984 , or section 601AG of the Corporations Act 2001 ,", substitute "any provision mentioned in subsection (4B)".
80 After subsection 62ZZJ(4A)
Insert:
(4B) The provisions are as follows:
(a) section 51 of the Insurance Contracts Act 1984 ;
(b) section 601AG of the Corporations Act 2001 ;
(c) any provision of any law specified in the regulations for the purposes of this paragraph.
81 After subsection 62ZZK(1)
Insert:
(1A) For the purposes of this section, treat the application of an amount, or part of an amount, in satisfaction of a liability of the person as being an application of the amount, or the part of the amount, for the person's benefit.
82 Subsection 62ZZKA(3)
Repeal the subsection.
83 After subsection 62ZZM(1)
Insert:
(1A) To avoid doubt, for the purposes of subsection 562(1) of the Corporations Act 2001 , the amount taken to have been paid by the general insurer to the person under subsection (1) is taken to have been received by the person from the general insurer.
84 At the end of Division 3 of Part VC
Add:
62ZZMA APRA may make transferred liabilities determination where transfer of business
(1) APRA may make a determination (a transferred liabilities determination ) if:
(a) a general insurer is a declared general insurer as a result of the Minister having made a declaration under section 62ZZC; and
(b) APRA has made, or proposes to make, a determination under section 25 of the Financial Sector (Transfer and Restructure) Act 1999 (compulsory transfer determination) that there is to be a total transfer or partial transfer of business from the declared general insurer to a receiving body (within the meaning of that Act); and
(c) the transfer of business will transfer the liabilities of the declared general insurer in respect of one or more protected policies issued by the declared general insurer; and
(d) APRA is satisfied that it will be able to identify each of those protected policies; and
(e) APRA has worked out:
(i) APRA's reasonable estimate of the total amount (the FCS amount ) to which policyholders of those protected policies will be entitled (disregarding the determination) under sections 62ZZF and 62ZZG as a result of the Minister's declaration mentioned in paragraph (a); and
(ii) APRA's reasonable estimate of the total amount (the administration amount ) of the costs that would be incurred by APRA in relation to the exercise of its powers and the performance of its functions under this Part relating to the declared general insurer if it did not make the determination; and
(f) APRA has worked out a total payment amount in accordance with section 62ZZMB; and
(g) APRA considers that it is reasonable in the circumstances to make the determination.
(2) However, APRA cannot make the determination if APRA has already issued a certificate of transfer under section 33 of the Financial Sector (Transfer and Restructure) Act 1999 stating that the transfer is to take effect.
(3) The determination must be in writing.
(4) The determination must specify the following:
(a) the declared general insurer;
(b) the receiving body;
(c) a description, in general or detailed terms, of all the protected policies of the declared general insurer;
(d) the FCS amount;
(e) the administration amount;
(f) the total payment amount;
(g) the FCS payment amount;
(h) the administration payment amount;
(i) any other information that APRA considers appropriate.
(5) A determination under subsection (1) may be varied, but not revoked, in accordance with subsection 33(3) of the Acts Interpretation Act 1901 .
(6) A determination made under subsection (1) is not a legislative instrument.
62ZZMB Payment amounts under transferred liabilities determination
(1) For the purposes of paragraph 62ZZMA(1)(f), APRA may work out:
(a) an amount (the FCS payment amount ) that:
(i) is equal to or less than the FCS amount; and
(ii) APRA considers to be appropriate; and
(b) an amount (the administration payment amount ) that:
(i) is equal to or less than the administration amount; and
(ii) APRA considers to be appropriate; and
(c) the amount (the total payment amount ) that is the sum of the FCS payment amount and the administration payment amount.
(2) In working out the FCS payment amount and the administration payment amount, APRA must have regard to the following:
(a) the total value of the assets that will be transferred to the receiving body in accordance with the transfer of business;
(b) the total value of the liabilities that will be transferred from the declared general insurer to the receiving body in accordance with the transfer of business;
(c) any other matter that APRA considers appropriate.
(3) The FCS payment amount or the administration payment amount may be a nil amount.
62ZZMC Consequences of transferred liabilities determination once certificate of transfer issued
Application of section
(1) This section applies if:
(a) APRA has made a transferred liabilities determination; and
(b) APRA has issued a certificate of transfer under section 33 of the Financial Sector (Transfer and Restructure) Act 1999 stating that the transfer is to take effect.
Receiving body entitled to total payment amount
(2) The receiving body is entitled to be paid by APRA an amount equal to the total payment amount specified in the determination.
Reduction of rights and entitlements of policyholder
(3) A policyholder's entitlement under this Division to be paid an amount in respect of a protected policy with the declared general insurer is reduced to nil, if the transfer of business will transfer the liability of the declared general insurer in respect of that protected policy.
Declared general insurer liable to APRA for total payment amount
(4) The declared general insurer is liable to pay to APRA an amount equal to the sum of the total payment amount specified in the determination.
(5) That liability is due and payable to APRA when the certificate of transfer comes into force.
(6) Despite subsection 62ZZL(1), APRA does not have the rights mentioned in that subsection.
To avoid doubt, sections 62ZZK, 62ZZKA, 62ZZL and 62ZZM do not apply in relation to an entitlement under subsection 62ZZMC(2).
85 Paragraph 62ZZO(b)
Omit "(including a provisional liquidator)".
86 After paragraph 62ZZO(c)
Insert:
; (d) an administrator appointed under subsection 62ZOA(1) to take control of a general insurer's business.
87 Paragraph 62ZZP(1)(b)
Omit "(including a provisional liquidator)".
88 After paragraph 62ZZP(1)(c)
Insert:
or (d) an administrator appointed under subsection 62ZOA(1) to take control of a general insurer's business; or
(e) any other person;
89 Subsection 62ZZP(1)
Omit "or judicial manager", substitute ", judicial manager, administrator or other person".
90 Paragraph 62ZZP(4)(da)
Omit "or report".
91 Paragraph 62ZZP(4)(e)
Omit "(c) and (d)", substitute "(c), (da), (db) and (d)".
92 Subsection 62ZZQ(5)
Omit "(including a provisional liquidator)".
93 Subsection 62ZZQ(7)
Omit "(including a provisional liquidator)".
94 At the end of section 62ZZQ
Add:
Requirement made of other person--civil penalty
(11) A person mentioned in paragraph 62ZZP(1)(e) must comply with a requirement made of the person under subsection 62ZZP(1).
Civil penalty: 200 penalty units.
95 Section 103A
Before "This Division", insert "(1)".
96 At the end of section 103A
Add:
(2) Subsections (3) and (4) apply if:
(a) APRA has given a recapitalisation direction to the general insurer under subsection 103B(1) (the primary recapitalisation direction ); and
(b) the general insurer is a subsidiary of a NOHC/NOHC subsidiary; and
(c) the NOHC/NOHC subsidiary is a company that:
(i) is registered under the Corporations Act 2001 ; and
(ii) has a share capital; and
(d) the NOHC/NOHC subsidiary does not have an Insurance Act statutory manager.
(3) This Division applies to the NOHC/NOHC subsidiary in the same way that it does to a general insurer.
(4) However, disregard the following provisions in applying this Division to the NOHC/NOHC subsidiary:
(a) subsection 103B(1);
(b) subsection 103C(1).
(5) In this section:
"NOHC/NOHC subsidiary " means a body corporate that is any of the following:
(a) an authorised NOHC;
(b) a subsidiary of an authorised NOHC.
97 Paragraph 103B(1)(b)
After "APRA considers that", insert ", in the absence of external support".
98 After subsection 103B(1)
Insert:
(1A) Subsection (1B) applies if subsections 103A(3) and (4) apply to a NOHC/NOHC subsidiary because of a primary recapitalisation direction given to a general insurer (as mentioned in subsection 103A(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.
99 After subsection 103B(2)
Insert:
(2A) The regulations may specify that a particular form of support is not external support for the purposes of paragraph (1)(b).
100 At the end of section 103B
Add:
(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 general insurer, 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 general insurer. APRA may revoke the direction if, at the time of revocation, it considers that the direction is no longer necessary or appropriate.
101 After subsection 103C(1)
Insert:
(1A) If the recapitalisation direction is a direction to a NOHC/NOHC subsidiary under subsection 103B(1B), the direction may direct the NOHC/NOHC subsidiary to do any of the following:
(a) issue:
(i) shares, or rights to acquire shares, in the NOHC/NOHC subsidiary; or
(ii) other capital instruments in the NOHC/NOHC subsidiary of a kind specified in the direction;
(b) acquire:
(i) shares, or rights to acquire shares, in the general insurer mentioned in subsection 103B(1A); or
(ii) other capital instruments in the general insurer mentioned in subsection 103B(1A) of a kind specified in the direction;
(c) acquire:
(i) shares, or rights to acquire shares, in a specified body corporate covered by subsection (1B); or
(ii) other capital instruments in a specified body corporate covered by subsection (1B), of a kind specified in the direction.
(1B) This subsection covers a body corporate if:
(a) the body corporate is a subsidiary of the NOHC/NOHC subsidiary; and
(b) the general insurer is a subsidiary of the body corporate.
(1C) Without limiting the generality of subsections (1), (1A) and (2), but subject to subsection (3), a direction referred to in those subsections may:
(a) deal with some only of the matters referred to in those subsections; or
(b) deal with a particular class or particular classes of those matters; or
(c) make different provision with respect to different matters or different classes of matters.
102 Subsection 103C(2)
Omit "paragraph (1)(a)", substitute "paragraph (1)(a) or subparagraph (1A)(a)(i), (1A)(b)(i) or (1A)(c)(i)".
103 Subsection 103C(3)
Omit "paragraph (1)(b)", substitute "paragraph (1)(b) or subparagraph (1A)(a)(ii), (1A)(b)(ii) or (1A)(c)(ii)".
104 Subsection 103D(3) (heading)
Repeal the heading, substitute:
Issue or acquisition of shares etc. despite other laws etc.
105 Subsection 103D(3)
After "issue", insert "or acquire".
106 Paragraph 103D(3)(a)
After "the Corporations Act 2001 ", insert "(without limiting the scope of section 127B of this Act)".
107 Paragraph 103D(3)(d)
Omit "(as defined in section 761A of the Corporations Act 2001 ) of a financial market (as defined in that section)", substitute "of a financial market".
108 After subsection 103E(1)
Insert:
(1A) If the recapitalisation direction is a direction to a NOHC/NOHC subsidiary under subsection 103B(1B), treat the reference in paragraph (1)(a) to "the policyholders of the insurer" as being a reference to "the policyholders of the general insurer mentioned in subsection 103B(1A)".
109 At the end of section 103E
Add:
(4) If the recapitalisation direction is a direction to a NOHC/NOHC subsidiary under subsection 103B(1B), treat the references in paragraph (3)(c) to "the insurer" as being a reference to "the NOHC/NOHC subsidiary mentioned in subsection 103B(1B)".
110 Section 103K
Repeal the section, substitute:
103K Recapitalisation direction not grounds for denial of obligations
(1) This section applies if a body corporate is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(2) None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:
(a) deny any obligations under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
(3) The matters are as follows:
(a) the body corporate being subject to a recapitalisation direction;
(b) if the body corporate is a member of a relevant group of bodies corporate--another member of the group being subject to a recapitalisation direction.
111 Subsection 103L(9)
Repeal the subsection.
112 Subsection 104(1)
Omit "Without limiting subsection (1A), APRA may", substitute "APRA may".
113 Paragraph 104(1)(b)
Omit "and such a contravention is likely to give rise to a prudential risk", substitute "and the direction is reasonably necessary for one or more prudential matters relating to the body corporate".
114 Subsection 104(1A)
Repeal the subsection, substitute:
(1A) APRA may give a body corporate that is a general insurer or is an authorised NOHC a direction of a kind specified in subsection (3) if APRA has reason to believe that:
(a) a subsidiary of the body corporate has contravened a provision of this Act, regulations made under this Act, prudential standards, or the Financial Sector (Collection of Data) Act 2001 ; or
(b) a subsidiary of the body corporate is likely to contravene this Act, regulations made under this Act, prudential standards, or the Financial Sector (Collection of Data) Act 2001 ; or
(c) the direction is in respect of a subsidiary of the body corporate and is necessary in the interests of:
(i) if the body corporate is a general insurer--policyholders of the general insurer; or
(ii) if the body corporate is an authorised NOHC--policyholders of any general insurer that is a subsidiary of the NOHC; or
(d) a subsidiary of the body corporate is, or is about to become, unable to meet the subsidiary's liabilities; or
(e) there is, or there might be, a material risk to the security of the assets of a subsidiary of the body corporate; or
(f) there has been, or there might be, a material deterioration in the financial condition of a subsidiary of the body corporate; or
(g) a subsidiary of the body corporate is conducting the subsidiary's affairs in an improper or financially unsound way; or
(h) a subsidiary of the body corporate is conducting the subsidiary's affairs in a way that may cause or promote instability in the Australian financial system; or
(j) a subsidiary of the body corporate is conducting the subsidiary's affairs in a way that may cause it to be unable to continue to supply services to:
(i) if the body corporate is a general insurer--the general insurer; or
(ii) if the body corporate is an authorised NOHC--any general insurer that is a subsidiary of the NOHC; or
(k) the direction is in respect of a subsidiary of the body corporate and the failure to issue a direction would materially prejudice the interests of:
(i) if the body corporate is a general insurer--policyholders of the general insurer; or
(ii) if the body corporate is an authorised NOHC--policyholders of any general insurer that is a subsidiary of the NOHC.
(1B) However, APRA can only make a direction as a result of a ground referred to in paragraph (1A)(a), (b), (d), (e), (f), (g) or (j) if APRA considers that the direction is reasonably necessary for one or more prudential matters relating to the body corporate.
(1C) APRA may give a body corporate that is a subsidiary of a general insurer or of an authorised NOHC a direction of a kind specified in subsection (3) if:
(a) APRA has given the general insurer or authorised NOHC a direction under subsection (1A) because one or more of the grounds referred to in that subsection have been satisfied in respect of the subsidiary; or
(b) APRA may give the general insurer or authorised NOHC a direction under subsection (1A) because one or more of the grounds referred to in that subsection have been satisfied in respect of the subsidiary.
(1D) APRA cannot give a direction under subsection (1C) to a body corporate of a kind specified in regulations (if any) made for the purposes of this subsection.
(1E) Subsections (1), (1A) and (1C) do not limit each other.
115 Paragraph 104(2)(b)
Repeal the paragraph, substitute:
(b) specify:
(i) in the case of a direction under subsection (1C)--the ground referred to in subsection (1A) as a result of which the direction is given; or
(ii) otherwise--the ground referred to in subsection (1) or (1A) as a result of which the direction is given.
116 After subsection 104(2)
Insert:
APRA may disregard external support
(2A) In deciding whether to give a direction under subsection (1), (1A) or (1C) to a body corporate, APRA may disregard any external support for the body corporate.
(2B) The regulations may specify that a particular form of support is not external support for the purposes of subsection (2A).
117 Paragraph 104(3)(u)
Repeal the paragraph, substitute:
(u) to make changes to the body corporate's systems, business practices or operations;
(v) to reconstruct, amalgamate or otherwise alter all or part of any of the following:
(i) the business, structure or organisation of the body corporate;
(ii) the business, structure or organisation of the group constituted by the body corporate and its subsidiaries;
(w) to do, or to refrain from doing, anything else in relation to the affairs of the body corporate.
118 After subsection 104(4)
Insert:
(4A) Without limiting the generality of paragraph (3)(w), a direction under that paragraph to a foreign general insurer may be any one or more of the following:
(a) a direction that the foreign general insurer act in a way so as to ensure that:
(i) a particular asset, or a particular class of assets, of the foreign general insurer is returned to the control (however described) of the part of the foreign general insurer's insurance business that is carried on in Australia; or
(ii) a particular liability, or a particular class of liabilities, of the foreign general insurer ceases to be the responsibility (however described) of the part of the foreign general insurer's insurance business that is carried on in Australia;
(b) a direction that the foreign general insurer not act in a way that has the result that:
(i) a particular asset, or a particular class of assets, of the foreign general insurer ceases to be under the control (however described) of the part of the foreign general insurer's insurance business that is carried on in Australia; or
(ii) a particular liability, or a particular class of liabilities, of the foreign general insurer becomes the responsibility (however described) of the part of the foreign general insurer's insurance business that is carried on in Australia.
(4B) The kinds of direction that may be given as mentioned in subsection (3) are not limited by any other provision in this Part.
(4C) The kinds of direction that may be given as mentioned in a particular paragraph of subsection (3) are not limited by any other paragraph of that subsection.
119 Subsection 104(10)
Repeal the subsection, substitute:
(10) Part VI applies to a decision to give a direction:
(a) under subsection (1) as a result of the ground referred to in paragraph (1)(a), (b), (c) or (d); or
(b) under subsection (1A) as a result of the ground referred to in paragraph (1A)(a), (b) or (c); or
(c) under subsection (1C) as a result of the ground referred to in paragraph (1C)(a) or (b), to the extent that the paragraph relates to a ground referred to in paragraph (1A)(a), (b) or (c).
120 Subsections 105(1) to (2)
Repeal the subsections, substitute:
(1) This section applies if a body corporate is party to a contract, whether the proper law of the contract is:
(a) Australian law (including the law of a State or Territory); or
(b) law of a foreign country (including the law of part of a foreign country).
(1A) None of the matters mentioned in subsection (1B) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:
(a) deny any obligations under the contract;
(b) accelerate any debt under the contract;
(c) close out any transaction relating to the contract;
(d) enforce any security under the contract.
This subsection has effect subject to subsections (2) and (3).
(1B) The matters are as follows:
(a) the body corporate being subject to a direction by APRA under section 104;
(b) if the body corporate is a member of a relevant group of bodies corporate--another member of the group being subject to a direction by APRA under section 104.
(2) If the body corporate is prevented from fulfilling its obligations under the contract because of a direction under section 104, other than a direction under paragraph 104(3)(t), the other party or parties to the contract are, subject to any orders made under subsection (3) of this section, relieved from obligations owed to the body corporate under the contract.
121 Subsection 106(1)
Omit "general insurer or authorised NOHC", substitute "general insurer, authorised NOHC or other body corporate".
122 Paragraph 106(3)(a)
Omit "a particular general insurer or authorised NOHC", substitute "a particular general insurer, authorised NOHC or other body corporate".
123 Paragraph 106(3)(b)
Omit "any general insurers or authorised NOHCs", substitute "any general insurers, authorised NOHCs or other bodies corporate".
124 Paragraph 106(4)(a)
Omit "any general insurer or authorised NOHC", substitute "any general insurer, authorised NOHC or other body corporate".
125 Section 107
Repeal the section.
126 Subsection 108(1)
Omit "A general insurer or an authorised NOHC", substitute "A general insurer, an authorised NOHC or another body corporate".
127 Paragraph 108(1)(c)
Omit "general insurer or authorised NOHC", substitute "general insurer, authorised NOHC or other body corporate".
128 Subsection 108(3)
Omit "a general insurer or authorised NOHC", substitute "a general insurer, an authorised NOHC or another body corporate".
129 Subsection 108(3)
Omit "insurer or NOHC" (wherever occurring), substitute "insurer, NOHC or other body corporate".
130 Subsection 108(4)
Omit "a general insurer or an authorised NOHC", substitute "a general insurer, an authorised NOHC or another body corporate".
131 Subsection 108(4)
Omit "insurer or NOHC" (wherever occurring), substitute "insurer, NOHC or other body corporate".
132 Paragraph 108(4)(c)
Omit "the general insurer or authorised NOHC", substitute "the insurer, authorised NOHC or other body corporate".
133 Subsection 108(6)
Omit "a general insurer or authorised NOHC", substitute "a general insurer, an authorised NOHC or another body corporate".
134 Subsection 108(6)
Omit "insurer or NOHC", substitute "insurer, NOHC or other body corporate".
135 At the end of Part IX
Add:
Division 3 -- Secrecy and disclosure provisions relating to all directions
109 APRA may determine that a direction is covered by secrecy provision
(1) This section applies if APRA has given an entity (the directed entity ) a direction under this Act.
(2) APRA may determine, in writing, that the direction is covered under this subsection if APRA considers that the determination is necessary to protect the policyholders of any general insurer or to promote financial system stability in Australia.
Note: For repeal of a determination, see subsection 33(3) of the Acts Interpretation Act 1901 .
(3) APRA must give the directed entity a copy of the determination as soon as practicable after making it.
(4) An instrument under subsection (2) is not a legislative instrument.
(5) If APRA makes a determination under subsection (2), APRA must consider whether it is appropriate in the circumstances to also make a determination under either or both of subsections 109C(2) and 109C(5).
109A Secrecy relating to directions
(1) A person commits an offence if:
(a) APRA has given an entity (the directed entity ) a direction under this Act; and
(b) the direction is covered by a determination under subsection 109(2); and
(c) the person is, or has been, covered by subsection (2) of this section in relation to the direction; and
(d) the person discloses information; and
(e) the information reveals the fact that the direction was made.
Penalty: Imprisonment for 2 years.
(2) A person is covered by this subsection in relation to the direction if the person is:
(a) the directed entity; or
(b) an officer, employee or contractor of the directed entity at a time on or after APRA gave the directed entity the direction; or
(c) any other person who, because of his or her employment, or in the course of that employment, has acquired information that reveals the fact that the direction was made.
Exception
(3) Subsection (1) does not apply if:
(a) the disclosure is authorised by section 109B, 109C, 109D, 109E, 109F or 109G; or
(b) the disclosure is required by an order or direction of a court or tribunal.
Note: A defendant bears an evidential burden in relation to a matter in subsection (2) (see subsection 13.3(3) of the Criminal Code ).
109B Disclosure of publicly available information
A person covered by subsection 109A(2) in relation to a direction may disclose information that reveals the fact that the direction was made, to the extent that the information has already been lawfully made available to the public.
109C Disclosure allowed by APRA
(1) A person covered by subsection 109A(2) in relation to a direction may disclose information that reveals the fact that the direction was made if:
(a) a determination under subsection (2) allows the disclosure by the person; and
(b) if APRA has included conditions in the determination--those conditions are satisfied.
Determinations relating to specified person
(2) APRA may, in writing, make a determination allowing:
(a) a specified person covered by subsection 109A(2) in relation to a specified direction; or
(b) a specified person covered by subsection 109A(2) in relation to a direction that is in a specified class of directions;
to disclose specified information in relation to the direction.
(3) An instrument under subsection (2) is not a legislative instrument.
(4) APRA must give a copy of the determination as soon as practicable after making it to:
(a) the directed entity; and
(b) the person specified, or each person specified, in the determination.
Determinations relating to specified class of persons
(5) APRA may, by legislative instrument, make a determination allowing a specified class of persons covered by subsection 109A(2) in relation to a direction that is in a specified class of directions to disclose:
(a) specified kinds of information in relation to the direction; or
(b) any kind of information in relation to the direction.
Conditions in determinations
(6) APRA may include conditions in a determination under subsection (2) or (5) that relate to any of the following:
(a) the kind of entities to which the disclosure may be made;
(b) the way in which the disclosure is to be made;
(c) any other matter that APRA considers appropriate.
109D Disclosure to legal representative for purpose of seeking legal advice
A person covered by subsection 109A(2) in relation to a direction may disclose information that reveals the fact that the direction was made if:
(a) the disclosure is to the person's legal representative; and
(b) the purpose of the person making the disclosure is for the legal representative to provide legal advice, or another legal service, in relation to the direction.
109E Disclosure allowed by APRA Act secrecy provision
(1) A person covered by subsection 109A(2) in relation to a direction may disclose information that reveals the fact that the direction was made if:
(a) the person is:
(i) an APRA member (within the meaning of subsection 56(1) of the Australian Prudential Regulation Authority Act 1998 ); or
(ii) an APRA staff member (within the meaning of that subsection); or
(iii) a Commonwealth officer (within the meaning of the Crimes Act 1914 ) who is covered by paragraph (c) of the definition of officer in subsection 56(1) of the Australian Prudential Regulation Authority Act 1998 ; and
(b) the information is protected information (within the meaning of subsection 56(1) of that Act), or is contained in a protected document (within the meaning of that subsection); and
(c) the disclosure is in accordance with subsection 56(3), (4), (5), (5AA), (6), (6A), (7), (7A), (7B) or (7C) of that Act.
Relationship to APRA Act secrecy provision
(2) Disclosure of information in relation to a direction is not an offence under section 56 of the Australian Prudential Regulation Authority Act 1998 if the disclosure is authorised by section 109B, 109C, 109D, 109F or 109G.
109F Disclosure in circumstances set out in the regulations
A person covered by subsection 109A(2) in relation to a direction may disclose information that reveals the fact that the direction was made, if the disclosure is made in circumstances (if any) set out in the regulations.
A person covered by subsection 109A(2) (the relevant person ) in relation to a direction may disclose information that reveals the fact that the direction was made if:
(a) another person covered by subsection 109A(2) in relation to the direction disclosed that information to the relevant person for a particular purpose in accordance with section 109C, 109D, 109E or 109F, or in accordance with a previous operation of this section; and
(b) the disclosure by the relevant person is for the same purpose.
109H Exceptions operate independently
Sections 109B, 109C, 109D, 109E, 109F and 109G do not limit each other.
136 At the end of section 127
Add:
(5) This Act has, by force of this subsection, the effect it would have if the Act separately provided as mentioned in the following paragraphs:
(a) the Act has effect as if a reference to a holding company of a general insurer were expressly limited to a reference to such a holding company that is a corporation to which paragraph 51(xx) of the Constitution applies;
(b) this Act has effect as if a reference to a holding company of a general insurer were expressly limited to a reference to such a holding company that carries on banking with respect to which the Parliament has the power to make laws under paragraph 51(xiii) of the Constitution.
137 After section 127A
Insert:
127B Protection from liability--general
(1) A person is not subject to any liability to any person in respect of anything done, or omitted to be done, in good faith and without negligence in the exercise or performance, or the purported exercise or performance, of powers, functions or duties under this Act.
(2) To avoid doubt, any information provided by a person to APRA under section 49B is taken, for the purposes of subsection (1), to be provided in the exercise of a power or the performance of a function under this Act.
(3) Subsection (1) does not apply to a person referred to in section 58 of the Australian Prudential Regulation Authority Act 1998 and, to avoid doubt, does not affect the operation of that section.
127C Protection from liability--directions and secrecy
(1) An action, suit or proceeding (whether criminal or civil) does not lie against a person in relation to anything done, or omitted to be done, in good faith by the person if:
(a) the person does the thing, or omits to do the thing, for the purpose of any of the following:
(i) complying with a direction under this Act given by APRA to a body corporate;
(ii) complying with section 109A (secrecy) in relation to a direction under this Act given by APRA to a body corporate ; and
(b) it is reasonable for the person to do the thing, or to omit to do the thing, in order to achieve that purpose; and
(c) the person is any of the following:
(i) an officer or senior manager of the body corporate, or of a member of a relevant group of bodies corporate of which the body corporate is also a member;
(ii) an employee or agent of the body corporate, or of a member of a relevant group of bodies corporate of which the body corporate is also a member;
(iii) the body corporate or a member of a relevant group of bodies corporate of which the body corporate is also a member.
(2) For the purposes of paragraph (1)(b), treat it as reasonable for a person to do a thing, or to omit to do a thing, in order to achieve a purpose unless no reasonable person in that person's position would do the thing, or omit to do the thing, in order to achieve that purpose.
(3) In this section:
"employee " of a body corporate includes a person engaged to provide advice or services to the body corporate.
"officer " has the meaning given by section 9 of the Corporations Act 2001 .
127D Protection from liability--provisions do not limit each other
The following provisions do not limit the operation of each other:
(a) section 62ZOK;
(b) section 38A;
(c) section 38B;
(d) section 127B;
(e) section 127C;
(f) section 62ZM;
(g) section 58 of the Australian Prudential Regulation Authority Act 1998 .
127E Act has effect despite the Corporations Act
This Act has effect despite any provision of the Corporations Act 2001 .
138 After section 129
Insert:
129AA Institution of offence proceedings no bar to judicial management or winding up
The institution of proceedings against a body corporate for an offence against this Act or the Financial Sector (Collection of Data) Act 2001 does not prevent the institution of proceedings for:
(a) the judicial management; or
(b) the winding-up;
of the body corporate on a ground that relates to the matter that constitutes the offence.
Part 2 -- Application provisions
139 Interpretation
In this Part:
commencement time means the time when this item commences.
new Insurance Act means the Insurance Act 1973 as amended by this Schedule.
140 Application--amendments to directions powers
(1) The amendments made by this Schedule to section 104 of the Insurance Act 1973 apply to directions given on and after the commencement time.
(2) The amendments made by this Schedule to Division 1 of Part IX of the Insurance Act 1973 apply to directions given on and after the commencement time.
141 Continuation of prudential standards
To avoid doubt, the amendments made by this Schedule do not affect the validity of a prudential standard made under section 32 of the Insurance Act 1973 that was in force immediately before the commencement time.
142 Application--revocation of authorisation under section 12
(1) The amendments made by items 9 to 12 of this Schedule apply to a general insurer's authorisation under section 12 of the Insurance Act 1973 , whether the authorisation was granted before, on or after the commencement time.
(2) The amendments made by items 9 to 12 of this Schedule apply in relation to a matter mentioned in a paragraph of subsection 15(1) of the new Insurance Act that occurs on or after the commencement time (including such a matter that starts before the commencement time and continues on or after the commencement time).
143 Application--revocation of NOHC authorisation
(1) The amendment made by item 13 of this Schedule applies to a NOHC authorisation, whether the authorisation was granted before, on or after the commencement time.
(2) The amendment made by item 13 of this Schedule applies in relation to a matter mentioned in a paragraph of subsection 21(1) of the new Insurance Act that occurs on or after the commencement time (including such a matter that starts before the commencement time and continues on or after the commencement time).
144 Application--conversion and write-off provisions
The amendment made by item 17 of this Schedule applies in relation to the conversion or writing-off of any instrument at or after the commencement time, whether the instrument was issued before, at or after that time.
145 Application--stay provisions
(1) The amendment made by item 43 of this Schedule applies in relation to a matter referred to in subsection 62V(3) of the new Insurance Act that occurs on or after the commencement time.
(2) The amendment made by item 49 of this Schedule applies in relation to an act referred to in subsection 62ZB(3) of the new Insurance Act that is done on or after the commencement time.
(3) The amendment made by item 110 of this Schedule applies in relation to a recapitalisation direction referred to in subsection 103K(3) of the new Insurance Act that is given on or after the commencement time.
(4) The amendment made by item 120 of this Schedule applies in relation to a direction referred to in subsection 105(1B) of the new Insurance Act that is given on or after the commencement time.