Commonwealth Numbered Acts

Life Insurance Amendment Act 1983 No. 143 of 1983 - SECT 9

9. Section 39 of the Principal Act is repealed and the following section is
substituted: Investment of statutory funds

''39. (1) Subject to this Act, the assets of a fund of a company may be
invested (subject to any provisions in the instruments constituting the
company or in the articles of association or other rules of the company that
impose restrictions upon the manner in which the assets of the company may be
invested) in such manner as the company thinks fit.

''(2) Subject to sub-sections (3) and (4), a company shall not, except with
the approval of the Commissioner, invest any assets of a fund of the company-

   (a)  in a related company (other than a subsidiary); or

   (b)  under a trust scheme.

''(3) Sub-section (2) does not prevent a company from investing, without
obtaining the approval of the Commissioner, any assets of a fund of the
company-

   (a)  by way of a loan to (including deposit with) or any shares in or
        debentures of, a bank as defined by sub-section 5 (1) of the
        Banking Act 1959 or a bank constituted by a law of a State; or

   (b)  by way of a loan to (including deposit with) a prescribed dealer in
        the short-term money market.

''(4) Sub-section (2) does not prevent a company from investing, without
obtaining the approval of the Commissioner, any moneys of a fund of the
company under trust schemes if the sum of those moneys and the value of the
assets of the fund consisting of investments under trust schemes does not
exceed 5% of the value of the assets of the fund.

''(5) In determining whether to grant or refuse approval under sub-section (2)
to a proposed investment of assets of a fund of a company (in this sub-section
referred to as the 'investing company') in a related company or under a trust
scheme, the Commissioner shall have regard to all matters that he considers
relevant and, in particular, to the following matters:

   (a)  the proportion that the value of the assets of the fund consisting of
        investments in related companies or under trust schemes, as the case
        may be, bears, respectively, to the total value of the assets of that
        fund and to the total value of the assets of all funds of the
        investing company;

   (b)  the proportion that the value of assets of the fund invested in the
        related company or under the scheme, as the case may be, bears to the
        total value of the assets of the investing company;

   (c)  the overall financial strength of the investing company, including, in
        particular, the nature and the degree of diversity of the assets of
        the company;

   (d)  the viability of the related company or the scheme, as the case may
        be, including its past profitability and its likely future
        profitability;

   (e)  in the case of a proposed investment in a related company-the nature
        of the business carried on by the company;

   (f)  in the case of a proposed investment under a trust scheme-the nature
        of the assets of the scheme; and

   (g)  whether or not the proposed investment is likely to be in the best
        interests of the investing company and its policy owners.

''(6) A transaction shall not be invalidated by reason only that it has been
entered into in contravention of sub-section (2), but nothing in this
sub-section shall affect the liability of any person to a penalty in respect
of any such contravention.

''(7) A company shall, within 6 weeks after each 31 December and 30 June,
lodge with the Commissioner a statement, in accordance with a form approved by
him, of such particulars of investments made by the company-

   (a)  in related companies (including subsidiaries); and

   (b)  under trust schemes,
as are specified in the form.

''(8) Where, in relation to the investment of moneys of a fund of a company,
reference is made in this section to a related company, or to a subsidiary,
the reference shall, unless the contrary intention appears, be read as a
reference to a company that is related to, or a reference to a company that is
a subsidiary of, as the case may be, the first-mentioned company.

''(9) A reference in this section to investment in a company shall be read as
a reference to an investment by way of a loan to, or in shares in or
debentures of, that company.

''(10) For the purposes of a provision of this section-

   (a)  the value as at a particular date (whether or not that date is
        referred to in that provision) of the assets, or of particular assets,
        of a fund of a company is the amount disclosed as the value of the
        assets, or of the particular assets, as the case may be-

        (i)    in the last balance-sheet prepared by the company under
               paragraph 44 (1) (d) and lodged under sub-section 52 (2);

        (ii)   if no balance-sheet has been so lodged, in the last audited
               balance-sheet of the company; or

        (iii)  if there is no such audited balance-sheet, in a balance-sheet
               that is prepared by the company as at a date fixed by the
               Commissioner by notice in writing and is audited by a person
               approved under section 47;

   (b)  the value as at a particular date (whether or not that date is
        referred to in that provision) of the assets of a company is that
        amount disclosed as the value of the assets-

        (i)    in the last balance-sheet prepared by the company under
               paragraph 44 (1) (d) and lodged under sub-section 52 (2);

        (ii)   if no balance-sheet has been so lodged, in the last audited
               balance-sheet of the company; or

        (iii)  if there is no such audited balance-sheet, in a balance-sheet
               that is prepared by the company as at a date fixed by the
               Commissioner by notice in writing and is audited by a person
               approved under section 47;

   (c)  an investment by way of a loan shall be deemed to be made on the day
        on which the loan agreement is entered into; and

   (d)  assets of a fund of a company includes assets consisting of
        investments made before the commencement of this section.

''(11) In this section-

'debenture' includes debenture stock, bonds, notes and any other document
evidencing or acknowledging indebtedness of a body corporate in respect of
money that is or may be deposited with or lent to the body corporate, whether
constituting a charge on property of the body corporate or not, but does not
include-

   (a)  a document that merely acknowledges the receipt of money by a body
        corporate in a case where, in respect of the money, the body corporate
        issues, in compliance with section 97 of the Companies Act 1981, a
        document prescribed by sub-section (2) of that section and complies
        with the other requirements of that section;

   (b)  a cheque, order for the payment of money or bill of exchange; or

   (c)  for the purposes of the application of this definition to a provision
        of this Act in respect of which the regulations provide that the word
        'debenture' does not include a prescribed document or a document
        included in a prescribed class of documents-that document or a
        document included in that class of documents, as the case may be;

'fund', in relation to a company, means a statutory fund maintained by that
company;

'moneys', in relation to a fund, means moneys that are assets of that fund;

'share', in relation to a company, means a share in the capital of the
company, and includes stock;

'trust scheme' means a contract, scheme or arrangement made for the purpose
of, or having the effect of, providing facilities for the participation by
persons, as beneficiaries under a trust, in profits or income arising from the
acquisition, holding, management or disposal of property of any description,
including choses in action and money.''.