Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) On an application under section 62K, the Federal Court may make an order that a general insurer be placed under judicial management if the Federal Court is satisfied:
(a) that:
(i) in the absence of external support, the general insurer is, or is likely to become, unable to meet its policy or other liabilities as they become due; or
(ii) the general insurer is a foreign general insurer and, in the absence of external support, is, or is likely to become, unable to meet, from its assets in Australia (other than any assets or amount excluded by the prudential standards for the purposes of paragraph 28(b)), its liabilities in Australia other than pre - authorisation liabilities as they become due; or
(iii) the general insurer has failed to comply with a prudential standard; or
(iiia) the general insurer has failed to comply with a recapitalisation direction; or
(iv) the general insurer has failed to comply with a direction under section 104; or
(ivaa) the general insurer has failed to comply with a requirement of the Financial Accountability Regime Act 2023 ; or
(iva) an external administrator has been appointed to a holding company of the general insurer (or a similar appointment has been made in a foreign country in respect of such a holding company), and the requirement in subsection (2) is satisfied; or
(ivb) if the general insurer is a foreign general insurer--an application for the appointment of an external administrator of the foreign general insurer, or for a similar procedure in respect of the foreign general insurer, has been made in a foreign country; or
(ivc) if the general insurer is a foreign general insurer--an external administrator has been appointed to the foreign general insurer, or a similar appointment has been made in respect of the foreign general insurer, in a foreign country; or
(v) there are reasonable grounds for believing that the financial position or management of the general insurer may be unsatisfactory; and
(b) that the time needed to make or complete an investigation of the insurance business of the general insurer under Part V would be likely to be such as to prejudice the interests of policyholders of the general insurer.
Note 1: This section and other provisions relating to judicial management do not apply to the aspects described in subsection 62ZVA(1) of the business and management of a foreign general insurer.
Note 2: Section 116A deals with assets and liabilities in Australia.
(2) For the purposes of subparagraph (1)(a)(iva), the requirement in this subsection is that the appointment mentioned in that subparagraph poses a significant threat to:
(a) the operation or soundness of the general insurer; or
(b) the interests of policyholders of the general insurer; or
(c) the stability of the financial system in Australia.
(3) The regulations may specify that a particular form of support for a general insurer is not to be considered external support for the purposes of subparagraphs (1)(a)(i) and (ii).