Commonwealth Consolidated Acts

INSURANCE ACT 1973 - SECT 62ZZC

  (1)   The Minister may declare that Division   3 applies in relation to a specified general insurer if:

  (a)   any of the following requirements are satisfied:

  (i)   the general insurer is under judicial management under Division   1 of Part   VB;

  (ii)   the general insurer is under statutory management under Division   1A of Part   VB;

  (iii)   an external administrator for the general insurer has been appointed under Chapter   5 of the Corporations Act 2001 ; and

  (b)   APRA has advised the Minister under this Division that APRA believes that:

  (i)   the general insurer is insolvent as defined in section   95A of the Corporations Act 2001 ; or

  (ii)   the general insurer is a foreign general insurer and is unable to pay, from its assets in Australia (other than any assets or amount excluded by the prudential standards for the purposes of paragraph   28(b)), all its debts that are liabilities in Australia other than pre - authorisation liabilities, as and when those debts become due and payable.

Note 1:   Section   116A deals with assets and liabilities in Australia.

Note 2:   The declaration does not end the judicial management or statutory management of the general insurer.

Declaration to specify amount for meeting entitlements

  (2)   The declaration must also specify the amount (if any) that is to be credited to the Financial Claims Scheme Special Account in connection with the application of Division   3 in relation to the declared general insurer. The amount must not be more than $20,000,000,000.

Declaration to specify amount for administration

  (3)   The declaration must also specify the amount (if any) that is to be credited to the APRA Special Account in connection with the administration of this Part   in relation to the declared general insurer. The amount must not be more than $100,000,000.

Amendment of specification of amounts

  (4)   The Minister may amend a declaration made under subsection   (1), but only to change the specification of an amount under subsection   (2) or (3), within the limit set in that subsection.

Declaration cannot be revoked

  (5)   The Minister cannot revoke a declaration made under subsection   (1).

Declaration or amendment not disallowable

  (6)   A declaration made under subsection   (1), or an amendment of the declaration, is a legislative instrument, but section   42 (disallowance) of the Legislation Act 2003 does not apply to the declaration or amendment.

Note:   Part   4 of Chapter   3 (sunsetting) of the Legislation Act 2003 does not apply to the declaration or amendment: see regulations made for the purposes of paragraph   54(2)(b) of that Act.

Effect of declaration or amendment

  (7)   The declaration or amendment:

  (a)   commences from the time it is made, despite subsection   12(1) of the Legislation Act 2003 ; and

  (b)   has effect according to its terms.

  (7A)   Subsection   12(2) (retrospective application of legislative instruments) of the Legislation Act 2003 does not apply to the declaration or amendment.

Declaration not to specify general insurer by reference to class

  (8)   Subsection   13(3) of the Legislation Act 2003 does not apply to a declaration under subsection   (1) specifying a general insurer.

Note:   This ensures that a declaration must specify a general insurer individually, and cannot specify it by reference to a class of general insurers.