Application for determination

(1)

A body corporate that:

(a) is an MDO within the meaning of the Medical Indemnity Act 2002 ; or
(b) is prescribed by the regulations for the purposes of this paragraph; or
(c) is related (within the meaning of the Corporations Act 2001 ) to a body corporate to which paragraph (a) or (b) applies;

may apply to APRA for a determination under subsection (3) that the minimum capital requirements do not apply to the body corporate during the period (the transition period ) that starts on 1 July 2003 and ends on 30 June 2008.

(2)

The application must be in the form prescribed by the regulations.

Determination that minimum capital requirements do not apply

(3)

APRA must determine that the minimum capital requirements do not apply to the body corporate during the transition period if:

(a) when it applies, the body corporate:
(i) is not a general insurer; or
(ii) is a general insurer and is prescribed by the regulations for the purposes of this subparagraph; and
(b) when it applies, the body corporate does not, or would not, satisfy the prudential standards, to the extent to which they impose minimum capital requirements; and
(c) the body corporate lodges a funding plan with the application; and
(d) the funding plan:
(i) is in the form prescribed by the regulations; and
(ii) is certified by an independent auditor and by an independent actuary; and
. (iii) complies with the guidelines issued by APRA under subsection (9).

Note: Paragraph (c)—If a funding plan lodged with an application does not comply with the requirements set out in paragraph (d), the body corporate will need to make another application under this section and lodge another funding plan with that application.

(3A)

APRA must make the determination within 30 days after receiving the application.

(3B)

The determination must be in writing and APRA must give the body corporate a copy of the determination within 7 days after making the determination.

When determination ceases to have effect

(4)

The determination ceases to have effect:

(a) on 30 June 2008; or
(b) if APRA revokes the determination before 30 June 2008—on the day specified in the revocation as the day on which the revocation takes effect.

Revocation of determination

(5)

APRA may revoke the determination if and only if:

(a) the body corporate:
(i) fails to meet a commitment given, or a target set, in the funding plan; or
(ii) otherwise fails to comply with the funding plan;
and the failure is substantial; or
(b) the body corporate no longer carries on a business of providing medical indemnity cover for health care professionals; or
(c) the body corporate requests APRA, in writing, to revoke the determination.

(6)

The revocation must:

(a) be in writing; and
(b) specify the day on which the revocation takes effect.

The day specified under paragraph (b) must be at least 28 days after the day on which the revocation is made.

(7)

APRA must give a copy of the revocation to the body corporate within 7 days after the day on which the revocation is made.

No determinations to be made after 1 July 2005

(8)

No determinations under subsection (3) are to be made on or after 1 July 2005.

APRA guidelines

(9)

APRA may issue guidelines on:

(a) the matters to be included in a funding plan lodged for the purposes of this section (including the nature of the commitments to be given, and the targets to be set, in the plan); and
(b) the matters as to which an independent auditor or independent actuary is to certify; and
(c) the qualifications an auditor or actuary must have to give certificates for the purposes of this section; and
(d) the necessary degree of independence from a body corporate that an auditor or actuary must have to give a certificate in relation to the body corporate's funding plan.

(10)

Without limiting paragraph (9)(a), the guidelines may provide that the funding plan must include a specified commitment by the body corporate to report to APRA in relation to its compliance with the funding plan.

(11)

A guideline issued under subsection (9) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .