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INSURANCE REGULATIONS (AMENDMENT) 1997 NO. 369
EXPLANATORY STATEMENTSTATUTORY RULES 1997 No. 369
Issued by the authority of the Assistant Treasurer
Insurance Act 1984
Insurance Regulations (Amendment)
The Insurance Act 1973 (the Act) and the Insurance Regulations (the Principal Regulations) establish a scheme of prudential supervision of the general insurance industry.
Section 132 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.
The purpose of the regulations is to amend the Principal Regulations so that they no longer prescribe the form of certain accounts and statements that are now determined by the Insurance and Superannuation Commissioner (the Commissioner), and to make consequential amendments to the Principal Regulations.
Part IV of the Act sets out requirements concerning the accounts of authorised insurers, and Part IVA sets out requirements concerning the accounts of certain bodies corporate which are related to authorised insurers, known as supervised bodies corporate. Among other things, the provisions in these Parts require authorised insurers and supervised bodies corporate to lodge yearly accounts and statements and quarterly statements with the Commissioner. These play an important role in the Commissioner's assessment of the solvency of authorised insurers. Part IVA was introduced with effect from 30 June 1997, by the Financial Laws Amendment Act 1997, which also made a number of amendments to Part IV with the same date of effect.
One of the amendments to Part IV allows the Commissioner to determine, by disallowable instrument, the form of the accounts and statements to be lodged by authorised insurers. Prior to the amendment, the form of accounts and statements was solely as prescribed by the Principal Regulations.
Part IVA includes a similar provision allowing the Commissioner to determine, by disallowable instrument, the form of accounts and statements to be lodged by supervised bodies corporate.
The Commissioner determined the form of accounts and statements to be lodged by authorised insurers and supervised bodies corporate on 22 September 1997. The instrument of Determination was gazetted on 8 October 1997, and tabled in both Houses of Parliament on 20 October 1997, as required for disallowable instruments by the Acts Interpretation Act 1901. The instrument has effect from gazettal, and determines the form of yearly accounts and statements to be lodged in respect of the financial year of authorised insurers and supervised bodies corporate ending on or after 31 December 1997, the form of quarterly statements to be lodged by them in respect of quarters ending on or after 31 March 1998, and the form of yearly statements of reinsurance activity to be lodged by authorised insurers in respect of a treaty year which ends on or after 31 March 1998.
The instrument includes a provision to the effect that quarterly statements that are to be lodged by authorised insurers in respect of the quarter ending on 31 December 1997 are to be in the form prescribed by the Principal Regulations on that day.
The Principal Regulations prescribe, for the purposes of Part IV of the Act, the form of accounts and statements to be lodged by authorised insurers. In view of the Commissioner's determination, this prescription would have been redundant after 31 December 1997, and would have had the potential to cause confusion for the insurance industry.
The regulations amend the Principal Regulations, with effect from 1 January 1998:
* by omitting Regulations 11 and 12, which prescribe the form of accounts and statements, and by removing the forms to which those Regulations refer from the Schedule; and
* by making other amendments which are consequent upon the determination of these forms by the Commissioner.
The one form that will remain in the Schedule, Form 17, is a form prescribed by Regulation 12A, and is not a form determined by the Commissioner.
The regulations are described in detail in the attachment.
ATTACHMENT
Insurance Regulations
Regulation I- Commencement
Regulation 1 explains that the Regulations commence on 1 January 1998. This means that the amendments to the Principal Regulations set out in these Regulations will commence from that date.
Regulation 2 - Amendment
Regulation 2 explains that the Principal Regulations are to be amended as set out in these Regulations.
Regulation 3 - Regulation 2 (Interpretation)
This Regulation amends Regulation 2 by;
* omitting the definition of "accounting standard", which becomes redundant on the omission of subregulation 2(2A);
* inserting a definition of "the forms determination", for the purposes of new Regulation 3 of the Principal Regulations; and
* omitting subregulations 2(2), (2A) and (3), which from 1 January 1998 will be redundant with the omission of the Forms from the Schedule to the Principal Regulations and the commencement of the forms determination of the Commissioner.
Regulation 4 - Regulation 3 (Forms)
This Regulation omits Regulation 3 and replaces it with Regulations 3, 3A, 3B and 3C. The amendment is a consequence of the replacement, from 1 January 1998, of the prescribed forms of statutory accounts to be lodged by insurers with the Commissioner, with forms determined by the Commissioner.
New Regulation 3 explains that in the Principal Regulations, unless the contrary intention appears, a reference to a form by number is a reference to the form so numbered in the forms determination, which, under Regulation 2 of the Principal Regulations, is the determination made by he Commissioner on 26 September 1997 for Sections 44 and 49J of the Act with respect to the form of statutory accounts. This determination is a disallowable instrument under the Acts Interpretation Act 1901. It was gazetted on 8 October 1997 and tabled on 20 October 1997.
Regulation 3A explains that the Commissioner must give a person a copy of a form if they request one. This requirement was previously in Regulation 3.
Regulation 3B explains the manner in which forms are to be filled in and lodged. This Regulation is similar to requirements previously in Regulation 3, but modified to provide for electronic lodgement.
Regulation 3 C prescribes requirements for forms which are lodged as paper forms. These requirements existed previously in Regulation 3.
Regulation 5 - Regulation 7 (Documents to be lodged with an application)
This Regulation amends Regulation 7 by omitting references to forms which are omitted from the Schedule to the Principal Regulations, and replacing those references with references to forms numbered in the forms determination of the Commissioner.
Regulation 6 - Regulation 8 (Valuation of assets for statements of assets and liabilities)
This Regulation omits Regulation 8 and replaces it with a new Regulation 8. The new Regulation achieves the same purpose as the previous Regulation, but does so by reference to forms in the forms determination of the Commissioner, rather than by reference to forms which are omitted from the Schedule to the Principal Regulations.
Regulation 7 - Regulation 9 (Classes of insurance business prescribed under subsection 42 (2) of the Act)
This Regulation omits. Regulation 9 and replaces it with a new Regulation 9 which prescribes a list of classes Which are the classes of business that insurers are to apportion or allocate amounts received and paid in the accounts that they lodge with the Commissioner (statutory accounts). The classes coincide with the classes of business which are set out in the forms determined by the Commissioner. With a number of minor modifications, they are the same classes that were set out in the previous Regulation 9.
Regulation 8 - Regulation 11 (Forms of various accounts and statements to be lodged with the Commissioner - subsection 44(7))
This Regulation omits Regulation 11. Regulation 11 prescribes, by reference to the Schedule of the Principal Regulations, the form of statutory accounts to be lodged with the Commissioner under Section 44 of the Act. The Commissioner has determined these forms from 1 January 1998 under the same Section. The prescription of these forms by the Principal Regulations will be redundant from that date.
Regulation 9 - Regulation 12 (Form of certain statements prescribed under paragraph 44(2)(m) of the Act)
This Regulation omits Regulation 12. Regulation 12 prescribes, for the purposes of paragraph 44(2)(m) of the Act, accounts and statements which are to be lodged by insurers with the Commissioner other than those specifically listed in Section 44 of the Act. The Commissioner has determined these accounts and statements from 1 January 1998 under the same paragraph. The prescription of these forms by the Principal Regulations will be redundant from that date.
Regulation 10 - Regulation 12A (Lloyd's statement of premium income)
This Regulation amends subregulation 12A(1) by making it clear that the form referred to in that subregulation is Form 17 in the Schedule to the Principal Regulations. It does not change the effect of the subregulation.
Regulation 11 - Regulation 13 (Copies of documents to be lodged with the Commissioner)
This Regulation omits Regulation 13. Regulation 13 required that insurers lodge two copies of statutory accounts with the Commissioner. With the introduction of electronic lodgement this requirement is redundant.
Regulation 12 - Regulation 14 (Certain accounts not to be audited)
This Regulation omits Regulation 14 and replaces it with a new Regulation 14. The new Regulation does not change the effect of the previous Regulation, but replaces references to forms which are omitted from the Schedule of the Principal Regulations with references to forms in the forms determination of the Commissioner.
Regulation 13 - Schedule (Forms)
The Schedule to the Principal Regulations sets out the form of statutory accounts which are prescribed under Regulation 11 for the purposes of Section 44 of the Act. The Commissioner has determined these forms from 1 January 1998 under the same Section. The prescription of these forms by the Principal Regulations will be redundant on and from that date. This Regulation amends the Schedule by omitting all the forms set out in the Schedule other than Form 17, which is a form prescribed by Regulation 12A for the purposes of the Schedule of the Act, and is unaffected by the forms determination of the Commissioner.