Duties Act 1997 No 123
Historical version for 2 April 2002 to 20 June 2002 (accessed 22 December 2014 at 09:15) Current version
Chapter 8Part 1

Part 1 General insurance

229   Imposition of duty

(1)  This Part charges duty on the amount of the premium paid in relation to a contract of insurance that effects general insurance (whether or not it also effects other kinds of insurance).
(2)  The amount of duty is required to be paid each time a premium is paid in relation to a contract of insurance that effects general insurance.
Notes. 

(1)   General insurance is defined in section 230.

(2)   Premium is defined in section 231.

(3)   The time at which a premium is paid is determined by section 232.

(4)   Generally, the insurer to whom the premium is paid is the person liable to pay the duty. But there are circumstances in which the person insured is liable to pay the duty. These circumstances are set out in section 236.

(5)   To facilitate payment of duty, insurers must register themselves with the Chief Commissioner, submit a monthly return showing the total amount of premiums paid to them for general insurance during the preceding month and pay the appropriate amount of duty when submitting the return. The provisions that deal with this are in Part 3.

230   What is “general insurance”?

(1)  General insurance is any kind of insurance that is applicable to:
(a)  property in New South Wales, or
(b)  a risk, contingency or event concerning an act or omission that, in the normal course of events, may occur within, or partly within, New South Wales,
or both.
(2)  General insurance does not include life insurance, a life insurance rider or insurance that is exempt from duty by Part 5.

231   What is a “premium” in relation to general insurance?

(1)  Premium, in relation to general insurance, means the total consideration given to an insurer by or on behalf of the insured person to effect insurance without deductions for any amounts paid or payable, or allowed or allowable, by way of commission or discount to an insurance intermediary.
(2)  Premium includes a fire service levy paid or payable in connection with insurance by an insurer or any other person.
(3)  Premium does not include:
(a)  an amount paid to an insurance intermediary by the insured person as a fee, provided that the amount can be clearly identified as a fee, or
(b)  an amount of duty under this or a corresponding Act.
(4)  It is immaterial where the amount is paid or where the insurance is effected.

232   When is a premium “paid”?

(1)  A premium, or an instalment of a premium, is paid for the purposes of this Chapter when the first of the following events occurs:
(a)  the premium or instalment is received by the insurer, or
(b)  an account of the insurer is credited with the amount of the premium or instalment.
(2)  A premium or instalment of a premium (apart from the case where the premium or instalment is received directly by an insurer) is taken to have been received by an insurer if it is received by another person on the insurer’s behalf.

233   Classes of general insurance

(1)  For the purpose of charging duty, general insurance is divided into 3 classes, Class 1 insurance, Class 2 insurance and Class 3 insurance.
(2)  Class 1 insurance is general insurance other than Class 2 insurance or Class 3 insurance.
(3)  Class 2 insurance is:
(a)  motor vehicle insurance, being insurance covering any one or more of the following:
(i)  the loss (including the loss by theft) of a motor vehicle,
(ii)  damage to a motor vehicle,
(iii)  loss of or damage to property by a motor vehicle,
being a motor vehicle within the meaning of the Motor Accidents Compensation Act 1999,
(a1)  aviation insurance, being insurance covering any one or more of the following:
(i)  the loss (including the loss by theft) of an aircraft,
(ii)  damage to aircraft,
(iii)  the death of or injury to a person by an aircraft or a thing falling from an aircraft,
(iv)  the loss of or damage to property by an aircraft or a thing falling from an aircraft,
(b)  disability income insurance, being insurance effected by a contract of insurance under which an amount is payable in the event of disablement of the insured by accident or sickness,
(c)  occupational indemnity insurance, being insurance covering liability arising out of the provision by a person of professional services or other services,
(d)  hospital and ancillary health benefits insurance, being insurance covering liability incurred in respect of fees or charges for hospital treatment, or for health care ancillary to hospital treatment, if the liability is not covered by an organisation registered under Part VI of the Commonwealth National Health Act 1953.
(4)  Class 3 insurance is:
(a)  crop insurance, being insurance covering:
(i)  loss due to the destruction of, or physical damage to, any pasturage or any crop of grain, fruit, vegetables or other plants, where the destruction or damage occurs while the pasturage or crop is being grown, or
(ii)  loss due to the destruction of, or physical damage to, the product of any such pasturage or crop, where the destruction or damage occurs while the product of the pasturage or crop is being stored or transported,
but not being insurance covering loss referred to in subparagraph (ii) unless the contract by which the insurance is effected also effects insurance covering the loss referred to in subparagraph (i), or
(b)  livestock insurance, being insurance covering:
(i)  loss due to the death of, or physical damage to, any animal, whether domesticated or wild, or
(ii)  loss due to the death of, or physical damage to, any genetic material of any such animal, or
(iii)  loss due to the theft of any such animal or genetic material, or
(c)  until 1 February 2005, insurance under the Debtor Insurance Scheme of the Stock and Station Agents Association.

234   What duty is payable?

(1)  The amount of duty chargeable on the premium paid in relation to a contract of insurance is 10% of the amount of the premium to the extent to which the premium is paid to effect Class 1 insurance.
(2)  The amount of duty chargeable on the premium paid in relation to a contract of insurance is 5% of the amount of the premium to the extent to which the premium is paid to effect Class 2 insurance.
(3)  The amount of duty chargeable on the premium paid in relation to a contract of insurance is 2.5% of the amount of the premium to the extent to which the premium is paid to effect Class 3 insurance.

235   Who is liable to pay the duty?

The general insurer is liable to pay the duty, except as provided by section 236.

236   Circumstances in which duty is payable by the insured person

(1)  This section applies to a person who obtains, effects, or renews any general insurance as an insured person with a person who is not a registered insurer.
(2)  A person to whom this section applies must, within 21 days after the end of the month in which the premium relating to the insurance is paid to an insurer (not being a registered insurer) or insurance intermediary:
(a)  lodge with the Chief Commissioner a return in the approved form containing such particulars and information as to the premium and the insurance as the Chief Commissioner may require, and
(b)  pay to the Chief Commissioner as duty the amount calculated in accordance with section 234.
(3)  A person to whom this section applies is taken to have complied with this section if the person’s duty under this section is discharged by another person acting on the person’s behalf.
(4)  The payment of a periodic premium in respect of disability income insurance that is continued, but not renewed, on the payment of the premium is taken to effect the insurance for the purposes of this section.
Note. Because this section imposes liability for duty on an insured person if the insured person arranges insurance with an insurer who is not registered, it would always be prudent to check the registered status of the insurer. This may be done by inspecting the register kept under section 252 by the Chief Commissioner.

237   Records to be kept

A person to whom section 236 applies must maintain records that contain information as to:
(a)  the nature and location of the property insured, and
(b)  the nature and location of each risk, contingency or event insured, and
(c)  the amount of the premiums paid in relation to each contract of insurance.

238   Refunds where premiums are returned

(1)  A general insurer or a person to whom section 236 applies is entitled to a refund of duty if the general insurer refunds, or there is refunded to the person, the whole or a part of a dutiable premium in respect of the contract of insurance for which duty has been paid.
(2)  The refund is the duty paid on the amount of the premium refunded.
(3)  A general insurer to whom duty is refunded may apply the amount of the refund to offset any other payment required to be made under this Act by the general insurer.
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