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Victorian Managed Insurance Authority
(Amendment) Bill
Circulation Print
EXPLANATORY MEMORANDUM
Clause 1 provides that the purpose of the Bill is to amend two Acts,
namely the Victorian Managed Insurance Authority Act 1996
("the Principal Act") and the Financial Management Act 1994
("the FMA") with respect to insurance and risk management in
the Victorian public sector.
Clause 2 provides that all sections of the amending Act commence on the
day after Royal Assent. There are no special commencement
requirements for any section.
Clause 3 amends section 3 of the Principal Act to--
· insert a new definition of "controlling interest", which
provides that the definition given in new section 3A of the
Principal Act, inserted by clause 4 below, applies
throughout the Principal Act; and
· amend the definition of "participating body" to provide
that, in addition to bodies that are currently participating
bodies under the Principal Act, or may be declared to be
participating bodies, any statutory authority or body
corporate that is receiving or has received in a previous
financial year more than 50% of its funding from the
Consolidated Fund is a participating body for the purposes
of the Principal Act.
The effect of this amendment to the definition of "participating
body" is to provide that all budget sector statutory authorities or
bodies corporate are automatically participating bodies, without
needing to be declared as such by notice published in the
Government Gazette. The Bill elsewhere provides (clause 5) that
a participating body of this kind may cease to be a participating
body by notice of the Minister published in the Government
Gazette.
541182 BILL LA CIRCULATION 4/5/2001
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Clause 4 inserts a new section 3A in the Principal Act that sets out the
criteria that determine whether the State has a "controlling
interest" in a body. These criteria relate to the holding by the
State, whether directly or indirectly, of at least 50% of the shares
in the body, or the power to appoint at least 50% of the directors
of the body.
Clause 5 substitutes a new section 4 for the current section 4 of the
Principal Act, and inserts a new section 4A in the Principal Act.
The new section 4 replicates the provisions of the current
section 4, but also provides that a department of the Parliament
may be declared by the Minister, by notice published in the
Government Gazette, to be a participating body subject to the
agreement of the Presiding Officers. The new section 4 also
explicitly provides that the declaration that a body is a
participating body may be revoked by the Minister, by notice
published in the Government Gazette.
The new section 4A provides that a budget sector participating
body may, by notice published in the Government Gazette, be
declared by the Minister to be, from a specified date, no longer a
participating body.
Clause 6 inserts new sections 23 and 24 in the Principal Act to replace the
current sections 23 and 24 respectively.
The new section 23 effectively replicates the provisions of the
current section 23 in respect of bodies that are participating
bodies of the VMIA but are not subject to the FMA.
These provisions impose requirements in relation to the
maintenance of registers of assets and the development,
implementation and review of risk management strategies.
The requirements of section 23 in respect of bodies that are
subject to the FMA are effectively transferred to the FMA by
clause 9 of the Bill. The new section 23 also provides that the
VMIA may request an extract of information from a department
or participating body's register of assets and risk management
strategy, rather than the whole document.
The new section 23 also requires VMIA to report to the Minister
for Finance on the adequacy of the registers of assets and risk
management strategies maintained by departments and
participating bodies. This provision explicitly establishes existing
practice in the Principal Act, which is currently silent on the
VMIA's responsibilities in this regard.
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New section 24 effectively replicates the requirements of the
current section 24 that departments and participating bodies are
to arrange their insurance with the VMIA, but also provides
explicitly that the VMIA's insurance responsibilities and powers
do not extend to workers' compensation and transport accident
personal injury insurance that are provided under other statutory
schemes. The new section inserts a power for the Minister to
direct VMIA not to provide certain types of insurance to certain
bodies.
The new section 24 also provides that, by arrangement, VMIA
may arrange insurance for a department or participating body
jointly with another department or participating body.
This provision will enable VMIA to provide insurance cover for
a number of bodies through one mechanism, rather than having
to enter into separate arrangements with each body.
Clause 7 amends section 25 of the Principal Act to provide explicitly that
VMIA may not provide indemnities to its own directors and
officers. It also extends VMIA's powers to provide indemnities to
include members of statutory authorities who are not "officers"
within the current definition in section 25. This is achieved by
extending that definition to include members of authorities that
do not have separate boards of management.
Clause 8 makes five minor technical corrections to the Principal Act by--
· inserting the word "official" before "seal" in section 5(3), to
make this sub-section consistent with the wording of other
sub-sections of section 5;
· omitting the words "of Directors" in section 18(3)(a) of the
Principal Act. These words are superfluous as the definition
of "Board" in section 3 of the Principal Act establishes that
the Board is the board of directors;
· inserting a new heading in section 19 of the Principal Act
that reflects current terminology throughout the public
sector;
· replacing "strategic plan" with "corporate plan" in section
19 of the Principal Act so that, as with the previous
insertion of a heading, reflects current terminology; and
· substituting "Authority" for the undefined term
"Corporation" in section 27(3) of the Principal Act.
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Clause 9 inserts a new section 44B in the FMA that effectively replicates
the current requirements in section 23 of the Principal Act for the
maintenance of registers of assets and the development,
implementation and review of risk management strategies by
bodies that are subject to the FMA.
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