New South Wales Consolidated Acts

HOME BUILDING ACT 1989 - SECT 105O

105O Assignment of contracts of insurance following cancellation of licence and in other cases

(1) In this section--

"licensed insurer" includes an insurer whose licence has been cancelled or has otherwise ceased to be in force.

(2) The Authority may assign the contracts of insurance of a licensed insurer to another licensed insurer with the agreement of that other insurer if--

(a) the licence of the licensed insurer is cancelled or otherwise ceases to be in force, or

(b) the Authority is satisfied that it is necessary to do so to ensure compliance with any conditions to which a licence is subject.

(3) Contracts may be assigned under this section by notice served by the Authority on the insurers concerned.

(4) On the service of any such notice--

(a) the contracts of insurance to which it relates are cancelled as from the date and time specified in the notice, and

(b) the licensed insurer to whom those contracts are assigned is taken (as from the time and date of cancellation) to have entered into contracts with those covered under the assigned contracts on the same terms as, and for the balance of the periods of, those contracts, and

(c) the licensed insurer whose contracts are assigned must provide the insurer's records relating to the assigned contracts to the insurer to whom the contracts are assigned.

(5) On the cancellation of a contract under subsection (4)(a), the insurer whose contract is cancelled must pay to the insurer to whom the contract is assigned--

(a) the same proportion of the premium paid or to be paid in respect of the contract as the balance of the indemnity period of the contract bears to the whole indemnity period of the contract, and

(b) any additional amount that the Authority directs relating to the income from investment and the management fee with respect to the premium.

(6) Any amount payable under subsection (5) to a licensed insurer may be recovered by the insurer as a debt in a court of competent jurisdiction.

(7) The effect of the cancellation of a contract under this section is to terminate the indemnity period of the contract but, subject to this section, without affecting any right, obligation or liability acquired, accrued or incurred under the contract in respect of that period before its termination.