Part 7.1 Licensing of insurers
157 Offence—unlicensed insurers
(cf s 100 MAA)
(1) A person must not issue or purport to issue a certificate of insurance under section 11 unless the person is a licensed insurer.Maximum penalty: 100 penalty units.
(2) If a person contravenes this section, or any condition to which a licence under this Part is subject, the certificate remains a valid certificate of insurance and the contravention does not annul or affect the third-party policy that is taken by this Act to have been issued on the issue of the certificate.
(cf s 101 MAA)
(1) An application for a licence under this Part may be made to the Authority by any corporation authorised under the Insurance Act 1973 of the Commonwealth to carry on insurance business.(2) A corporation is not competent to make an application unless it is a party to the Insurance Industry Deed.(3) An application is to be in such form and accompanied by such documents:(a) as may be prescribed by the regulations, and(b) subject to any such regulations, as may be determined by the Authority.(4) Without affecting the generality of subsection (3), an applicant for a licence may be required to furnish the following particulars and documents:(a) particulars of the shareholders, directors and other managers of the applicant,(b) previous returns and accounts under the Corporations Law, the Corporations Act 2001 of the Commonwealth and the Insurance Act 1973 of the Commonwealth,(c) particulars of re-insurance arrangements to which the applicant is a party,(d) a draft business plan under section 173.(5) A person who, in or in connection with an application for a licence, makes a statement knowing that it is false or misleading in a material particular is guilty of an offence.Maximum penalty: 50 penalty units or imprisonment for 12 months, or both.
159 Determination of application for licence
(cf s 102 MAA)
(1) The Authority is to consider each application for a licence under this Part and may:(a) grant a licence to the applicant, or(b) refuse the application.(2) The Authority may, in determining an application for a licence, take into consideration:(a) the suitability of the applicant, and(b) the paid-up share capital and reserves of the applicant, and(c) the constitution of the applicant (if any), and(d) the re-insurance arrangements of the applicant, and(e) the efficiency of the motor accidents scheme under this Act generally, and(f) such other matters as the Authority thinks fit.(3) Despite subsection (1), the Authority must refuse an application for a licence from a corporation that does not comply with such requirements as are prescribed by the regulations for the purposes of this section.(4) A licence must not be granted under this Part unless the applicant has paid (or has made arrangements acceptable to the Authority for the payment of) the fee determined by the Authority, with the approval of the Minister, for the grant of the licence.(5) When the Authority proposes to grant a licence to a corporation, it must give 14 days’ notice of the proposal to all licensed insurers specifying the name of the corporation.
(cf s 104 MAA)
A licence granted under this Part continues in force until it is cancelled under this Part.
(cf s 105 MAA)
(1) A licence granted under this Part is subject to:(a) such conditions as may be prescribed by this Act or the regulations, and(b) such conditions (not inconsistent with this Act or the regulations) as may be imposed by the Authority:(i) on the granting of the licence, or(ii) at any time during the currency of the licence.(2) The Authority may, by notice served on a licensed insurer, impose conditions (or further conditions) to which the licence is to be subject or revoke or vary any condition imposed on the licence by the Authority.(3) A condition to which a licence is subject has effect whether or not it is endorsed on the licence.(4) A licensed insurer who contravenes, whether by act or omission, any condition to which the licence is subject is guilty of an offence.Maximum penalty: 100 penalty units.
(5) An insurer (not being a licensed insurer) who contravenes, whether by act or omission, any obligation imposed by this Act on the insurer in connection with a motor accident, being an obligation that is declared by this Act to be a condition of a licence under this Part, is guilty of an offence.Maximum penalty: 100 penalty units.
(6) A licensed insurer cannot be convicted of an offence under subsection (4) and required to pay civil penalty under section 166 in respect of the same act or omission.
162 Matters that may be regulated by conditions of licences
(cf ss 105 (5) and 106 MAA)
(1) Without limiting the generality of section 161, the conditions to which a licence under this Part may be subject include conditions:(a) for the purpose of ensuring compliance with the obligations of the licensed insurer, or(b) for the purpose of ensuring that insurance premiums for third-party policies are available to meet claims, or(c) for the purpose of requiring the licensed insurer to achieve early resolution of compensation claims, and early payment under Part 3.2, at particular levels, or(d) for the purpose of the efficiency of the motor accidents scheme under this Act generally, or(e) relating to the provision of information concerning claims and profits.(2) A licensed insurer does not contravene a condition of a kind referred to in subsection (1) (c) if the insurer establishes that the insurer furnished a report to the Authority within a reasonable period and that the report sets out reasonable grounds for justifying the contravention.
163 Matters not subject to conditions of licences
(cf s 105 (1A) and (5) MAA)
(1) A condition of a licence under this Part must not be prescribed by the regulations or imposed, revoked or varied by the Authority if this would give or be likely to give a competitive advantage to the licensed insurer over other licensed insurers.(2) A condition of a licence under this Part that requires or has the effect of requiring a licensed insurer to obtain a share of the insurance market specified in or determined in accordance with the terms of the condition is of no effect.(3) This section extends, in the case of a licence in force on the commencement of this Act, to conditions imposed or otherwise applicable before that commencement.(4) This section has effect despite anything to the contrary in sections 161 and 162.
(cf s 106A MAA)
(1) A licensed insurer may, with the approval of the Authority, assign its licence to another licensed insurer or to a corporation to whom the Authority proposes to grant a licence.(2) The Authority must not approve the assignment of a licence unless the Authority is satisfied that the proposed assignee is able to meet the past, present and future liabilities of the assignor:(a) under any third-party policy in respect of which the assignor is the insurer, and(b) to the Motor Accidents Authority Fund, and(c) to any other licensed insurer.
(cf s 106B MAA)
(1) The Authority may, by notice served on a licensed insurer, suspend the insurer’s licence and the insurer is thereby prohibited from issuing any third-party policies after such date as is specified in the notice for the purpose.(2) A licensed insurer who contravenes, whether by act or omission, the terms of any such notice is guilty of an offence.Maximum penalty: 100 penalty units.
(3) A suspension may be effected only if:(a) subject to subsection (4), a licensed insurer has contravened its licence or this Act or the regulations or the Insurance Industry Deed, or(b) the insurer ceases to be an insurer authorised to carry on business under the Insurance Act 1973 of the Commonwealth, or(c) a provisional liquidator, liquidator or official liquidator, or a receiver, receiver and manager, official manager or trustee, is appointed over all or any part of the assets or undertaking of the insurer, or(d) the insurer is given a direction under section 51 or 62 of the Insurance Act 1973 of the Commonwealth or an inspector is appointed to investigate the affairs of the insurer under Part V of that Act, or(e) after receiving a report under section 177, the Authority is of the opinion that the insurer is, or is likely to become, unable to meet its liabilities under this Act or under third-party policies taken to have been issued by it, or(f) there is any default by the insurer in the payment of principal or interest in excess of $100,000 under any debenture, or series of debentures, issued by the insurer (except where the default occurs because the insurer genuinely disputes its liability to make the payment), or(g) the insurer enters into, or resolves to enter into, any arrangement, composition or compromise with its creditors or any assignment for the benefit of its creditors, or proceedings are commenced to sanction any such arrangement, composition, compromise or assignment (except for the purposes of a reconstruction or amalgamation, on terms which have been approved by the Authority), or(h) an application (other than a frivolous or vexatious application) or an order is made for the winding up or dissolution of the insurer or a resolution is passed for the winding up or dissolution of the insurer (except for the purposes of a reconstruction or amalgamation, on terms which have been approved by the Authority), or(i) there is a change in the effective control of the insurer or the insurer becomes a subsidiary of a company of which it was not a subsidiary at the date of the issue of its licence, or(j) the Authority is of the opinion that the insurer has failed to comply at any time with a condition imposed on its authority to carry on insurance business under the Insurance Act 1973 of the Commonwealth, or(k) a person claiming to be a creditor by assignment or otherwise of the insurer for a sum exceeding $100,000 then due has served on the insurer, by leaving at its registered office, a demand requiring the insurer to pay the sum so claimed to be due, and the insurer has for 3 weeks thereafter failed to pay the sum or to secure or compound for it to the satisfaction of the person claiming to be a creditor, or(l) there is returned unsatisfied, in whole or part, any execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the insurer and the amount unsatisfied exceeds $100,000, or(m) the insurer has agreed to the suspension.(4) If the contravention by a licensed insurer of its licence or this Act or the regulations or the Insurance Industry Deed is capable, in the opinion of the Authority, of being remedied within 21 days after the contravention occurred (or such longer period as the Authority, having regard to the nature of the contravention and the need to protect the interests of policy holders and other persons, may reasonably allow), the Authority must not suspend the licence during that period.(5) The Authority may, by notice served on the licensed insurer, terminate the suspension of the insurer’s licence if the Authority is satisfied that the licensed insurer is able to comply with the requirements that would be imposed on the licensed insurer if it were then to be granted a licence for the first time.
166 Imposition of civil penalty on or censure of licensed insurer
(1) If the Authority is satisfied that a licensed insurer has contravened its licence or this Act or the regulations or the Insurance Industry Deed, the Authority may, instead of suspending the insurer’s licence:(a) impose a civil penalty on the insurer not exceeding $50,000, or(b) issue a letter of censure to the insurer.(2) Before imposing a civil penalty, the Authority is required to refer the matter to a special committee for advice and to consider any advice provided by the committee.(3) Any such special committee:(a) is to comprise the Chairperson of the Board, a nominee of the Insurance Council of Australia Limited and another member nominated jointly by the Authority and that Council, and(b) is required to give the licensed insurer concerned an opportunity to make written submissions with respect to the alleged contravention, but is not required to conduct a hearing into the matter.If that Council fails to make a nomination for the purposes of constituting any such special committee within the time required by the Authority, the Minister may make that nomination on its behalf.
(4) A civil penalty that has been imposed under this section may be recovered by the Authority in a court of competent jurisdiction as a debt due to the Authority.(5) A civil penalty that is paid or recovered is payable into the Motor Accidents Authority Fund.
(cf s 107 MAA)
(1) The Authority may, by notice served on the licensed insurer, cancel a licence granted under this Part.(2) The Authority may cancel a licence for any reason it thinks fit, but must give the reasons for its decision.(3) Without affecting the generality of subsection (2), the Authority may cancel a licence for reasons that relate to the motor accidents scheme under this Act generally, whether or not the reasons relate to the efficiency and conduct of the licensed insurer.(4) The Authority must, as far as practicable, give a licensed insurer whose licence it proposes to cancel an opportunity to make representations on the matter.(5) A licence surrendered by a licensed insurer is not cancelled until the Authority approves of the surrender.(6) The Authority must not cancel a licence unless the Authority is satisfied that the licensed insurer has discharged all of its past, present and future liabilities:(a) under any third-party policy in respect of which it is the insurer, and(b) to the Motor Accidents Authority Fund, and(c) to any other licensed insurer,or that the insurer has provided security or entered into other arrangements satisfactory to the Authority in respect of those liabilities.(7) If the Authority is unable to cancel a licence because of any such liabilities, the Authority may, instead, impose a condition on the licence that prohibits the insurer from issuing any further third-party policies.
168 Assignment of policies following cancellation of licence and in other cases
(cf s 108 MAA)
(1) In this section:insurer means a licensed insurer, and includes a person whose licence has been cancelled or has otherwise ceased to be in force.
(2) The Authority may assign the third-party policies of an insurer to another insurer if:(a) the licence of the 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) Policies 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 policies of insurance to which it relates are cancelled as from the date and time specified in the notice, and(b) the insurer to whom those policies are assigned is taken (as from the time and date of cancellation) to have issued third-party policies on the same terms as, and for the balance of the periods of, those policies.(5) On the cancellation of a third-party policy under subsection (4) (a), the insurer whose policy is cancelled must pay to the insurer to whom the policy is assigned:(a) the same proportion of the premium paid or to be paid in respect of the policy as the balance of the indemnity period of the policy bears to the whole indemnity period of the policy, and(b) such additional amount as 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 an insurer may be recovered by the insurer as a debt in a court of competent jurisdiction.(7) The effect of the cancellation of a third-party policy under this section is to terminate the indemnity period of the policy but, subject to this section, without affecting any right, obligation or liability acquired, accrued or incurred under the policy in respect of that period before its termination.
169 Records and evidence relating to licences
(cf s 109 MAA)
(1) The Authority must keep records in relation to all licences granted by the Authority under this Part, including particulars of:(a) the granting, refusal, conditions, suspension and cancellation of licences, the assignment of licences and notices served under section 165, and(b) such other matters relating to licences as the Authority thinks fit.(2) A certificate purporting to be signed by the Chief Executive Officer and certifying that on any date or during any period specified in the certificate the particulars set forth in the certificate as to any of the matters referred to in subsection (1) did or did not appear on or from the records is (without the production of any record or document on which the certificate is founded) admissible in any proceedings and is evidence of the particulars certified in and by the certificate.
170 Reviews of licensing decisions by Administrative Decisions Tribunal
(cf s 109A MAA)
(1) A person may apply to the Administrative Decisions Tribunal for a review of any of the following decisions of the Authority under this Part:(a) a decision to refuse the person’s application for a licence,(b) a decision to impose a condition on the person’s licence,(c) a decision to vary any condition imposed on the person’s licence,(d) a decision to refuse to grant approval to the person to assign a licence,(e) a decision to suspend the person’s licence,(f) a decision to impose a fine on the person,(g) a decision to cancel the person’s licence.(2) Despite the provisions of Division 2 of Part 3 of Chapter 5 of the Administrative Decisions Tribunal Act 1997, the Tribunal may not order that a decision referred to in subsection (1) be stayed pending the determination of an application for its review.
Part 7.2 Supervision of licensed insurers
171 Authority guidelines for market practice
(1) The Authority may issue to licensed insurers guidelines with respect to the issue of third-party policies.(2) The Authority may amend, revoke or replace any such guidelines.(3) The Authority is to consult licensed insurers before it issues, amends or replaces any such guidelines.(4) It is a condition of a licence granted under Part 7.1 that the licensed insurer must comply with the guidelines in force under this section.
172 Determination of market share of each insurer
(cf s 115A MAA)
(1) A licensed insurer must, within such time after the end of each quarter and each year as is determined by the Authority, notify the Authority of the amount of insurance premiums received by it in relation to all third-party policies taken to have been issued by it during that quarter or year.(2) The Authority must, after notifications have been received from all licensed insurers in respect of a quarter or year, determine, in relation to each insurer, the proportion that the insurance premiums for third-party policies received by the insurer for the quarter or year bears to the aggregate amount of insurance premiums for third-party policies received by all licensed insurers for the quarter or year.(3) The Authority may round a proportion determined under this section to one-tenth of a percent.(4) After determining the proportion for each licensed insurer, the Authority must inform all licensed insurers of the proportions so determined.(5) In this section:quarter means a quarter ending on the last day of September, December, March and June in each year.
year means a year commencing on 1 July.
173 Business plans of licensed insurers
(cf s 110 MAA)
(1) A licensed insurer must prepare and deliver to the Authority a business plan for its third-party insurance business as soon as practicable after it is requested to do so by the Authority.(2) The licensed insurer must revise its business plan:(a) whenever it departs significantly from its business plan, and(b) at such intervals of not less than 12 months as the Authority directs.(3) The licensed insurer must, as far as practicable, conduct its third-party insurance business in accordance with its current business plan, but if it departs significantly from that plan the insurer must notify the Authority accordingly.(4) A business plan must be prepared in accordance with such guidelines as the Authority determines from time to time and notifies to licensed insurers.(5) A business plan must describe the manner in which the insurer’s third-party insurance business is to be conducted (including claims handling, management, expenses and systems).(6) It is a condition of a licence granted under Part 7.1 that the licensed insurer must comply with this section.(7) In this section, a reference to the third-party insurance business of a licensed insurer is a reference to any business associated with third-party policies.
174 Re-insurance arrangements of licensed insurers
(cf s 111 MAA)
(1) It is a condition of a licence granted under Part 7.1 that the licensed insurer must notify the Authority of:(a) particulars of arrangements made or proposed to be made for re-insurance in respect of liabilities under third-party policies issued by the licensed insurer, and(b) the terms of any approval of the Insurance and Superannuation Commissioner under the Insurance Act 1973 of the Commonwealth in respect of any such re-insurance.(2) A licensed insurer must not, without the prior written consent of the Authority, effect any form of re-insurance if the aggregate premium payable for the re-insurance exceeds 15% of the gross direct premium written by the insurer.
175 Investment of funds of licensed insurer
(cf s 112 MAA)
(1) It is a condition of a licence granted under Part 7.1 that the licensed insurer, if required to do so by the Authority, must provide the Authority with details of the way in which its third-party funds and other funds are invested.(2) The third-party funds of a licensed insurer are the funds of the insurer derived from the payment of insurance premiums for third-party policies and from their investment.
176 Accounts, returns and other records of licensed insurer
(cf s 113 MAA)
(1) A licensed insurer must keep such accounting and other records in relation to the business or financial position of the insurer:(a) as may be prescribed by the regulations, and(b) subject to the regulations, as may be directed by the Authority by notice served on the insurer.(2) The regulations may prescribe the manner in which financial transactions are to be accounted for in any such records.(3) A licensed insurer must lodge with the Authority returns in relation to the business or financial position of the insurer in such form, containing such particulars and accompanied by such documents:(a) as may be prescribed by the regulations, and(b) subject to the regulations, as may be directed by the Authority by notice served on the insurer.(4) Returns must be lodged:(a) subject to paragraph (b), within 6 weeks after each 31 March, 30 June, 30 September and 31 December, or(b) at such other times as the Authority, by notice served on the insurer, directs.(5) The regulations may require returns, and documents accompanying returns, to be certified by an auditor or by an actuary.(6) A licensed insurer who contravenes any requirement imposed on the insurer by or under this section is guilty of an offence.Maximum penalty: 100 penalty units.
(7) The Authority may make publicly available a copy of any return, and any documents accompanying a return, under this section.(8) In this section:accounting records include invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry, and also include such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up.
177 Audit of accounting records and of compliance with guidelines
(cf s 114 MAA)
(1) The Authority may appoint an appropriately qualified person to audit or inspect, and report to the Authority on, the accounting and other records relating to the business or financial position of a licensed insurer, including accounting and other records relating to:(a) the manner in which its third-party funds and other funds are invested, or(b) compliance with any guideline under this Act.(2) A person so appointed is, for the purpose of exercising any functions under this section, entitled to inspect the accounting and other records of the licensed insurer.(3) A licensed insurer must provide all reasonable assistance to enable the exercise of those functions.(4) A person must not wilfully obstruct or delay a person exercising a function under this section.(5) A person exercising functions under this section has qualified privilege in proceedings for defamation in respect of any statement that the person makes orally or in writing in the course of the exercise of those functions.(6) A licensed insurer or another person who contravenes any requirement imposed on the insurer or other person by or under this section is guilty of an offence.Maximum penalty: 100 penalty units.
(7) The Authority may from time to time carry out an audit to determine the profitability of a licensed insurer and for that purpose may exercise the functions of a person appointed under subsection (1). The Authority is to report on any such audit to the Parliamentary Committee, on a confidential basis.(8) In this section, accounting records has the same meaning as in section 173.
178 Information and documents as to business and finances to be supplied to Authority by insurers and former insurers
(cf s 115 MAA)
(1) In this section:documents includes returns and accounts furnished under the Corporations Law, the Corporations Act 2001 of the Commonwealth and the Insurance Act 1973 of the Commonwealth.
insurer means a licensed insurer or a former licensed insurer.
(2) The Authority may require an insurer:(a) to disclose to the Authority specified information relating to the business and financial position of the insurer or of any corporation which is a related body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth), or(b) to forward to the Authority, or make available for inspection, specified documents, or copies of or extracts from specified documents, kept by the insurer or by any corporation which is such a related body corporate.(3) Subsection (2) extends to requiring:(a) financial information that is or may be relevant to the consideration by the Authority of insurance premiums filed by the insurer under this Act, and(b) information about the cost of claims handling incurred by the insurer, about the settlement of claims by the insurer, and(c) information about other matters concerning the insurer,but this subsection does not affect the generality of subsection (2), section 26 or any other provision of this Act regarding the obtaining of information by the Authority, and does not limit any other manner in which the Authority may obtain information.(4) A requirement under this section:(a) must be made in writing and served on the insurer, and(b) must specify the manner in which and the time within which the requirement is to be complied with.(5) The manner in which a requirement is to be complied with may include the supply to the Authority of a certificate by a registered tax agent, a registered company auditor (within the meaning of the Corporations Act 2001 of the Commonwealth) or an actuary approved by the Authority as to the correctness of any specified information or specified documents (or copies of or extracts from specified documents).(6) Unless the insurer satisfies the court that it is not within its power to comply with the requirement, an insurer that fails to comply with a requirement under this section is guilty of an offence.Maximum penalty: 100 penalty units.
(cf s 132C MAA)
(1) The Authority may from time to time forward to the Minister reports relating to:(a) the level of compliance by insurers with:(i) any requirements of this Act, and(ii) any conditions of licences under this Act (including any guidelines under this Act), and(b) complaints made about insurers, and any other matters relating to insurers, in connection with any matters to which this Act relates.(2) A report may relate to insurers generally, or to any class of insurers, or to any particular insurers.(3) A report may identify particular insurers.(4) A report may include such observations and recommendations as the Authority thinks fit.(5) The Minister may make a report public and may lay a report or cause it to be laid before both or either of the Houses of Parliament.(6) Nothing in this section affects reports that may be made apart from this section.
180 Power of Supreme Court to deal with insurers unable to meet liabilities
(cf s 116 MAA)
(1) The Supreme Court may, on the application of the Authority, make such orders as the Supreme Court considers necessary or desirable for the purpose of protecting the interests of the holders of third-party policies taken to have been issued by a licensed insurer or a former licensed insurer.(2) The Supreme Court may make such an order if it is satisfied that the licensed insurer or former licensed insurer:(a) is not able to meet the insurer’s liabilities under the third-party policies or may not be able to do so, or(b) has acted or may act in a manner that is prejudicial to the interests of the holders of the third-party policies.(3) Without limiting the generality of subsection (1), the Supreme Court may make the following orders:(a) an order regulating the administration and payment of claims under the third-party policies,(b) an order prohibiting or regulating the transfer or disposal of, or other dealing in, the assets of the licensed insurer or former licensed insurer,(c) an order requiring the licensed insurer or former licensed insurer to discharge its liabilities under the third-party policies out of its assets and the assets of any related body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth),(d) an order appointing a receiver or receiver and manager, having such powers as the Supreme Court orders, of the property or part of the property of the licensed insurer or former licensed insurer or of any such related body corporate.(4) If an application is made to the Supreme Court for an order under subsection (1), the Supreme Court may, if in its opinion it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application.(5) If an application is made to the Supreme Court for an order under subsection (1), the Supreme Court is not to require the Authority, as a condition of granting an interim order, to give any undertaking as to damages.(6) The Authority is to give the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission notice of its intention to apply for an order under this section.(7) The Australian Prudential Regulation Authority and the Australian Securities and Investments Commission each has a right to appear and be heard in proceedings for an order under this section.(8) If the Supreme Court has made an order under this section, the Supreme Court may, on application by the Authority or by any person affected by the order, make a further order rescinding or varying the first mentioned order.(9) A person who contravenes, whether by act or omission, an order made by the Supreme Court under this section that is applicable to the person is guilty of an offence.Maximum penalty: 20 penalty units or imprisonment for 6 months, or both.
(10) The Supreme Court is not to exercise its powers under this section in respect of a corporation which is in the course of being wound up.(11) The powers of the Supreme Court under this section are in addition to any other powers of the Supreme Court.
181 Notification to Authority of certain defaults in relation to insurers
(cf s 117 MAA)
(1) A licensed insurer and a former licensed insurer must notify the Authority in writing of the occurrence of any of the events or things referred to in section 165 (paragraphs (a), (e), (j) and (m) excepted) within 21 days after the event or thing happens (whether within or outside the State).(2) A licensed insurer must notify the Authority in writing of:(a) a decrease or proposed decrease in the issued capital of the insurer within 21 days after the decrease or proposal to effect the decrease, and(b) the receipt by the insurer of any bidder’s statement or target’s statement within the meaning of the Corporations Act 2001 of the Commonwealth.Maximum penalty: 100 penalty units.
182 Powers of entry and inspection by authorised officers of Authority
(cf s 118 MAA)
(1) In this section:authorised officer means a member of staff, or other person, in either case authorised by the Authority for the purposes of a specified investigation under this section.
insurer means a licensed insurer or a former licensed insurer, and includes any insurance broker or commission agent engaged in third-party insurance business.
premises includes any structure, building, aircraft, vehicle, vessel and place (whether built on or not).
(2) An authorised officer may:(a) on production of his or her authority, enter at any reasonable hour any premises (not being a dwelling-house) used, or that the authorised officer reasonably suspects to be used, by an insurer for conduct of the insurer’s business or the storage or custody of any document, and(b) remain in or on those premises while exercising any power conferred by this section, and(c) require an insurer or any other person in or on those premises to produce any such document that is in his or her possession or under his or her control and is capable of being produced, and(d) require an insurer or any other person having possession or control of any such document that is not written, or is not written in the English language, or is not decipherable on sight, to produce a statement, written in the English language and decipherable on sight, of the information contained in the document, and(e) inspect, or make copies of or take extracts from, a document produced pursuant to paragraph (c) or a statement produced pursuant to paragraph (d), or retain such a statement, and(f) require an insurer or any other person in or on those premises to answer questions relating to:(i) the business or financial position of an insurer, or(ii) the observance of this Act or the regulations.(3) A person must not:(a) refuse or fail to allow an authorised officer to enter premises under this section, or(b) wilfully obstruct or delay an authorised officer when exercising any powers under this section, or(c) unreasonably refuse or fail to produce a document or statement to an authorised officer under this section, or(d) if an authorised officer informs a person that by virtue of this Act the person is obliged to answer questions relating to any matter referred to in subsection (2) (f):(i) refuse or fail to answer such a question, or(ii) give an answer to such a question that the person knows is false or misleading in a material particular.Maximum penalty: 50 penalty units.
(4) A person may not refuse to answer a question under subsection (2) on the ground that it might tend to incriminate the person, but neither the question nor the answer is admissible in any civil or criminal proceedings against the person other than proceedings for an offence under this section.
183 Proceedings for failure to comply with licence
(cf s 118A MAA)
No proceedings may be taken against a licensed insurer for failure to comply with the terms of the licensed insurer’s licence or this Act or the regulations, except by the Authority.
(cf s 119 MAA)
(1) In this Part:insolvent insurer means an insurer to whom:
(a) an order of the Treasurer in force under section 16A of the Insurance Protection Tax Act 2001 relates, or(b) an order of the Minister in force under section 185 relates.insurer means a licensed insurer or a former licensed insurer, but does not include an insolvent insurer.
liquidator includes a provisional liquidator.
third-party policy issued by an insolvent insurer means:
(a) a third-party policy issued by an insolvent insurer, whether before or after the insurer became an insolvent insurer, or(b) a third-party policy, issued by a person other than an insolvent insurer, in respect of which an insolvent insurer has (whether before or after becoming an insolvent insurer) entered into a contract or an arrangement whereby the insolvent insurer is (or would but for its dissolution be) liable to indemnify the person against liability of the person under the policy.(2) In this Part, a reference to a liquidator or to a provisional liquidator includes a reference to a liquidator or a provisional liquidator appointed outside New South Wales.(3) So far as the legislative power of Parliament permits, the liquidator of an insolvent insurer has outside New South Wales the functions conferred or imposed on the liquidator by this Part, in addition to having those functions within New South Wales.(4) In this Part, a reference to a third-party policy, a licensed insurer and a former licensed insurer includes a reference to a third-party policy, a licensed insurer and a former licensed insurer within the meaning of the Motor Accidents Act 1988 (as in force immediately before the commencement of this Part), respectively.(5) This Part has effect despite any provisions of the Corporations (New South Wales) Act 1990 or of the applicable provisions (as defined in that Act) of the State.
(cf s 120 MAA)
(1) If the Minister is satisfied that a liquidator or provisional liquidator has been appointed in respect of an insurer, or that an insurer has been dissolved, the Minister may with the approval of the Treasurer, by order published in the Gazette, declare that the insurer is an insolvent insurer for the purposes of this Part.(2) The Minister is to consult with the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission before making an order under this section.Note. Declared insolvent insurers under the Insurance Protection Tax Act 2001 are also insolvent insurers for the purposes of this Part. See the definition of insolvent insurer in section 184 of this Act.
186 Liquidator to notify Nominal Defendant of claims
(cf s 121 MAA)
The liquidator of an insolvent insurer must, on receiving any claim relating to any third-party policy issued by the insolvent insurer, forward the claim to the Nominal Defendant.Maximum penalty: 20 penalty units.
187 Delivery of documents to Nominal Defendant
(cf s 122 MAA)
The liquidator of an insolvent insurer must, whenever requested to do so by the Nominal Defendant:(a) deliver to the Nominal Defendant all documents relating to third-party policies issued by the insolvent insurer and all claims or judgments made in respect of any such policies in the liquidator’s possession, and(b) supply to the Nominal Defendant all information in the liquidator’s possession relating to any such policies or any such claims or judgments.Maximum penalty: 20 penalty units.
188 Appointment of Nominal Defendant as agent and attorney of insured
(cf s 123 MAA)
(1) The Nominal Defendant is by this section appointed as the agent and attorney of the person insured under a third-party policy issued by an insolvent insurer.(2) As agent and attorney of such a person, the Nominal Defendant may exercise the rights and discharge the obligations of the person:(a) for the purpose of dealing with and finalising any claim against which the person is indemnified under the third-party policy, and(b) for the purpose of satisfying any such claim or any judgment against which the person is indemnified under the third-party policy, and(c) for any other purpose prescribed by the regulations.(3) As agent and attorney of such a person, the Nominal Defendant may exercise the rights of the person in connection with the third-party policy:(a) for the purpose of proving in the winding-up of the insolvent insurer and receiving any dividends or other money payable to the person in the winding-up, and(b) for the purpose of recovering any money which the person is entitled under the third-party policy to recover from the person who issued the policy, being a policy referred to in paragraph (b) of the definition of third-party policy issued by an insolvent insurer in section 184, and(c) for any other purpose prescribed by the regulations.(4) The Nominal Defendant may exercise rights and discharge obligations as agent in the name of the person concerned, or in its own name.(5) All rights vested in an insurer and all obligations imposed on an insurer, being rights or obligations:(a) arising from or relating to a third-party policy issued by an insolvent insurer to a person, and(b) which may or must be exercised or discharged for the purpose of:are vested in or imposed on the person.(i) dealing with and finalising any claim, or(ii) satisfying any claim or judgment, against which the person is indemnified under the policy,(6) Subsection (5) is not to be construed so as to vest in or impose on a person, or to affect in any other way:(a) a right of an insurer to be indemnified by a re-insurer or an obligation of an insurer to indemnify a person, or(b) any other prescribed right or obligation.(7) If the Nominal Defendant is, under this section, empowered to exercise any rights, or to discharge any obligations, of a person as agent and attorney, the person is not entitled, without the consent of the Nominal Defendant, to exercise those rights or discharge those obligations.(8) The appointment effected by this section may be revoked only by an Act.(9) If the Nominal Defendant is the agent and attorney of a person insured under a third-party policy issued by an insolvent insurer, the Nominal Defendant is also the agent and attorney for the purposes of this Part of any person who is authorised by this Act to take proceedings for damages against the insolvent insurer under the third-party policy.
189 Payments to insured or liquidator
(cf s 124 MAA)
(1) Where a person insured under a third-party policy issued by an insolvent insurer has satisfied (whether before or after the insurer became an insolvent insurer for the purposes of this Part) any claim or judgment in respect of which the person has not been indemnified under that policy, the Nominal Defendant may pay from the Nominal Defendant’s Fund to the person an amount equal to the whole or any part of the amount paid by the person in satisfaction of the claim or judgment.(2) Where the liquidator of an insolvent insurer has satisfied (whether before or after the insurer became an insolvent insurer for the purposes of this Part) any claim or judgment in respect of which a person is entitled to be indemnified under a third-party policy issued by the insolvent insurer, the Nominal Defendant may pay from the Nominal Defendant’s Fund to the liquidator an amount equal to the whole or any part of the amount paid by the liquidator in satisfaction of the claim or judgment.(3) Where:(a) a payment is made under subsection (1) to a person in respect of a claim or judgment, the Nominal Defendant is taken, to the extent of the payment, to have satisfied the claim or judgment as agent and attorney of the person, or(b) a payment is made under subsection (2) to the liquidator of an insolvent insurer in respect of a claim by or on behalf of any person or a judgment for the benefit of any person, the Nominal Defendant is taken, to the extent of the payment, to have satisfied the claim or judgment as agent and attorney of the person in respect of whom the payment is made.(4) The powers conferred by subsections (1) and (2) are exercisable at the absolute discretion of the Nominal Defendant and neither of those subsections operates nor the exercise of any of those powers operates so as to confer, directly or indirectly, any right on any person to whom a payment is or may be made under those subsections or on any other person.
190 Application of Nominal Defendant’s Fund
(cf s 125 MAA)
(1) Out of the Nominal Defendant’s Fund, the Nominal Defendant:(a) is to pay the amount of any claim or judgment arising from or relating to any third-party policy issued by an insolvent insurer, being a claim or judgment that it proposes to satisfy as agent and attorney of a person, and any other amounts required by this Part to be paid from that Fund, and(b) is entitled to be indemnified against all payments made by it and all costs and expenses that it may incur in or in connection with the exercise of its functions under this Part.(2) Where a payment is made by the Nominal Defendant as agent and attorney of a person, being a payment authorised by this Part, the Nominal Defendant is not entitled to recover the amount of that payment from the person.
191 Recovery of amounts under contracts or arrangements for re-insurance
(cf s 126 MAA)
To the extent that any amounts are paid out of the Nominal Defendant’s Fund in respect of a claim or judgment pursuant to section 190 the Nominal Defendant is, where an insolvent insurer (if it had provided indemnity to that extent under a third-party policy) would have been entitled to recover any sum under a contract or arrangement for re-insurance, entitled to the benefit of and may exercise the rights and powers of the insolvent insurer under that contract or arrangement so as to enable the Nominal Defendant to recover from the re-insurer and pay into the Nominal Defendant’s Fund the amount due under that contract or arrangement.
192 Payments of compensation when insolvent insurer dissolved
(cf s 127 MAA)
(1) When an insolvent insurer has been dissolved, the payments under judgments relating to third-party policies issued by the insolvent insurer which would, but for the dissolution taking place, be payable by the insolvent insurer are to continue and are to be paid out of the Nominal Defendant’s Fund by the Nominal Defendant.(2) When an insolvent insurer has been dissolved, a person who would have had, but for the dissolution of the insolvent insurer, an entitlement to payment of any amount arising from or relating to any third-party policy issued by the insolvent insurer (being a policy in respect of which the insolvent insurer is the insurer) is entitled to payment of that amount out of the Nominal Defendant’s Fund.(3) A person referred to in subsection (2) may make a claim against the Nominal Defendant in respect of an entitlement to payment of an amount under that subsection.(4) The Nominal Defendant is entitled to deal with and finalise a claim made under subsection (3) in relation to a third-party policy issued by an insolvent insurer to the same extent as it would have been entitled to do so if the insolvent insurer had not been dissolved.
193 Borrowings for the purposes of the Nominal Defendant’s Fund
(cf s 127A MAA)
The Nominal Defendant may from time to time borrow such amounts as the Nominal Defendant considers are necessary to satisfy claims and judgments arising from or pertaining to third-party policies issued by an insolvent insurer which would otherwise be unable to be met from the money in the Nominal Defendant’s Fund.
194 Inspection of documents by person authorised by Minister
(cf s 128 MAA)
The liquidator of an insolvent insurer must, whenever requested to do so by a person authorised by the Minister, make any documents relating to third-party policies issued by the insolvent insurer and any claims or judgments made in respect of any such policies in the liquidator’s possession available for inspection by that person.Maximum penalty: 20 penalty units.
195 Nominal Defendant may take certain legal proceedings
(cf s 129 MAA)
(1) If:(a) the liquidator of an insolvent insurer applies to any court for directions in relation to any particular matter arising under the winding-up, or(b) the exercise by the liquidator of an insolvent insurer of any of the liquidator’s functions, whether under this Part or not, is challenged, reviewed or called into question in proceedings before any court, or(c) any other matter that concerns or may affect the operation of this Part is raised in proceedings before any court,the Nominal Defendant may intervene at any stage of the proceedings before that court, by an Australian legal practitioner or an agent, and the Nominal Defendant thereupon becomes a party to, and has all the rights of a party to, those proceedings before that court, including the right to appeal against any order, judgment or direction of the court.(2) In any case in which the Attorney General might take proceedings on the relation or on behalf of or for the benefit of a person who is (or who would but for the dissolution of the insolvent insurer be) entitled, under a third-party policy issued by an insolvent insurer, to be indemnified against a claim or judgment arising from or relating to the policy, being proceedings for or with respect to enforcing or securing the observance of any provision made by or under this Part, any Act or any rule of law, the Nominal Defendant is taken to represent sufficiently the interests of the public and may take the proceedings in its own name.(3) The Nominal Defendant is entitled to be paid, out of the Nominal Defendant’s Fund, all the costs and expenses incurred by the Nominal Defendant in exercising the powers conferred by this section.
196 Insurers or other persons may act for Nominal Defendant
(cf s 130 MAA)
The Nominal Defendant may appoint a licensed insurer or other person as its agent for the purposes of exercising its functions under this Part.
(cf s 131 MAA)
The regulations may make provision for or with respect to the application, with such modifications as may be provided by the regulations, of any of the provisions of this Act in relation to the dealing with or finalising of claims, or the satisfying of judgments, by the Nominal Defendant as agent and attorney of a person under this Part.