EXPLANATORY STATEMENT

 

 

Select Legislative Instrument 2007 No. 249

 

Issued by the Attorney-General

 

Legislative Instruments Act 2003

 

Legislative Instruments Amendment Regulations 2007 (No. 2)

 

Section 62 of the Legislative Instruments Act 2003 (the LIA) provides that the
Governor-General may make regulations prescribing all matters required or permitted by the LIA to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the LIA.

 

The LIA establishes a comprehensive regime for the management of Commonwealth legislative instruments. The LIA commenced on 1 January 2005. On the same day, the Legislative Instruments Regulations 2004 (the Principal Regulations) came into operation. The Principal Regulations facilitate the operation of the LIA by (among other things) providing exemptions from the LIA or parts of the LIA.

 

The purpose of the Regulations is to amend the Principal Regulations to provide exemptions from disallowance and sunsetting for declarations made under section 6 of the Terrorism Insurance Act 2003 (the TI Act). The Regulations also update an obsolete reference to the Uniform Resource Locator (website address) of the Federal Register of Legislative Instruments.

The TI Act establishes an insurance scheme to replace the insurance cover withdrawn by commercial insurers after the terrorist attacks in the United States on 11 September 2001. Section 6 of the TI Act provides that if a terrorist attack occurs, the Treasurer can invoke the operation of the insurance scheme by declaring a terrorist incident and setting a reduction percentage on the payment of insurance claims. In July 2006, the Treasury received legal advice that it should treat section 6 declarations as legislative instruments. As a result, the Treasury has requested an exemption for section 6 declarations from the disallowance and sunsetting provisions of the LIA.

 

The Regulations are minor and of a machinery nature and do not alter existing arrangements. The amendments were discussed with the Treasury and the Office of Legislative Drafting and Publishing, and the terms of the regulations and explanatory material were settled in consultation with those agencies.

 

Details of the Regulations are set out in the Attachment, including the reasons why the particular exemptions from the LIA were made.

 

The Regulations are a legislative instrument for the purposes of the LIA and commence on the day after they are registered on the Federal Register of Legislative Instruments.

ATTACHMENT

 

Details of the Legislative Instruments Amendment Regulations 2007 (No. 2)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the
Legislative Instruments Amendment Regulations 2007 (No. 2).

 

Regulation 2 – Commencement

 

This regulation provides for the Regulations to commence on the day after they are registered.

 

Regulation 3 – Amendment of the Legislative Instruments Regulations 2004

 

This regulation provides that the Legislative Instruments Regulations 2004 (the Principal Regulations) are amended as set out in Schedule 1.

 

Schedule 1 – Amendment commencing on the day after registration

 

Item [1] – Subparagraph 4(2)(b)(i)

Item [1] omits the reference to ‘http://frli.gov.au/lodgment.nsf’ in subparagraph 4(2)(b)(i) and replace it with a reference to ‘http://lodgment.frli.gov.au’.

Subparagraph 4(2)(b)(i) of the Principal Regulations specifies the Uniform Resource Locator (URL) for lodgement of new instruments on the Federal Register of Legislative Instruments (FRLI). At present, the subparagraph lists the following URL: http://frli.gov.au/lodgment.nsf

The Office of Legislative Drafting and Publishing has acquired a new server which holds lodgements on FRLI. The new server is linked to a new URL address: https://lodgment.frli.gov.au.

This item updates subparagraph 4(2)(b)(i) of the Principal Regulations to refer to the new URL.

 

Item [2] – Schedule 2, after item 9

 

Item [2] inserts a new item 9A after item 9 in Schedule 2 of the Principal Regulations.

 

New item 9A inserts an exemption from disallowance for determinations made under section 6 of the Terrorism Insurance Act 2003 (the TI Act).

The TI Act establishes an insurance scheme to replace the insurance cover withdrawn by commercial insurers after the terrorist attacks in the United States on 11 September 2001. Section 6 of the TI Act provides that if a terrorist attack occurs, the Treasurer can invoke the operation of the insurance scheme by declaring a terrorist incident and setting a reduction percentage on the payment of insurance claims.

It is desirable that section 6 declarations receive an exemption from disallowance. There are concerns that significant business uncertainty would occur if section 6 declarations were subject to disallowance. Additionally, subsection 6(5) of the TI Act states ‘a declaration under this section cannot be revoked’. If a declaration later ceases to have effect, by disallowance, this would undermine the purpose behind the rule in subsection 6(5).

 

Item [3] – Schedule 3, after item 6

 

Item [3] inserts a new item 6A after item 6 in Schedule 3 of the Principal Regulations.

 

New item 6A inserts an exemption from sunsetting for determinations made under section 6 of the Terrorism Insurance Act 2003.

It is desirable that section 6 declarations receive an exemption from sunsetting. There are concerns that significant business uncertainty would occur if section 6 declarations were subject to sunsetting. Additionally, subsection 6(5) of the TI Act states ‘a declaration under this section cannot be revoked’. If a declaration later ceases to have effect, by sunsetting, this would undermine the purpose behind the rule in subsection 6(5).