Commonwealth Numbered Regulations - Explanatory Statements

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LIFE INSURANCE REGULATIONS (AMENDMENT) 1997 NO. 119

EXPLANATORY STATEMENT

STATUTORY RULES 1997 No. 119

Issued by the authority of the Assistant Treasurer

Life Insurance Act 1995

Life Insurance Regulations (Amendment)

Section 253 of the Life Insurance Act 1995 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.

The Act provides for the prudent management of life insurance companies and for their supervision by the Insurance and Superannuation Commissioner.

Six rounds of regulations have been released since the commencement of the Act on 1 July 1995. The amendment to the Life Insurance Regulations (the Principal Regulations) comprise the seventh round of regulations.

The introduction of the Retirement Savings Accounts Act 1997 allows life insurance companies to provide superannuation without a trust structure in the form of Retirement Savings Accounts (RSAs) from 1 July 1997.

The Act provides for life policies issued by a life company to be classified as either ordinary business or superannuation business. This classification sets the basis for accounting for and reporting the life insurance business of a company. The Act permits the separate administration of each class by the operation of separate statutory funds. The Principal Regulations prescribe the policies which are to be superannuation policies for the purposes of the Act.

The Regulations amend Regulation 13.02 of the Principal Regulations to include RSAs as superannuation policies for the purposes of the Act. This will permit a life insurance company to administer RSAs as part of its superannuation business.

The Regulations commence on the date of commencement of the Retirement Savings Accounts Act 1997 (RSA Act).

The RSA Act has been proclaimed to commence on 2 June 1997. The Regulations are made under section 4 of the Acts Interpretation Act 1901, which allows the Regulations to be made before the RSA Act comes into operation.

The Office of Regulation Review have advised that a Regulation Impact Statement is not necessary in respect of these Regulations.


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