New South Wales Consolidated Regulations

HOME BUILDING REGULATION 2014 - REG 62ZB

62ZB Assignment of obligations following cancellation of licence and in other cases

(1) In this clause--

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

(2) The trust deed of a fidelity fund must require the trustee to assign the obligations of the licensed provider under the fidelity fund scheme to another licensed provider with the agreement of that other provider if--

(a) the licence of the first-mentioned licensed provider is cancelled or otherwise ceases to be in force, or

(b) the Authority directs the trustee of the fidelity fund scheme that the Authority is satisfied that it is necessary to do so to ensure compliance with any conditions to which a licence is subject.

(3) The trust deed of a fidelity fund must provide that obligations under the fidelity fund scheme may be assigned under a term referred to in subclause (2) by notice served by the Authority on the providers concerned.

(4) On the service of the notice--

(a) the fidelity fund cover to which it relates is cancelled as from the date and time specified in the notice, and

(b) the licensed provider to whom the obligations under the relevant fidelity fund scheme are assigned is taken (as from the time and date of cancellation) to have entered into fidelity fund cover with those covered under the relevant fidelity fund scheme on the same terms as, and for the balance of the periods of, the trust deed relating to that fidelity fund cover, and

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

(5) On the cancellation of a fidelity fund cover under subclause (4) (a), the provider whose fidelity fund cover is cancelled must pay to the provider to whom the fidelity fund cover is assigned--

(a) the same proportion of the contributions or membership payments paid or to be paid in respect of the fidelity fund cover as the balance of the indemnity period of the fidelity fund cover bears to the whole indemnity period of the fidelity fund cover, and

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

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

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