LIFE INSURANCE ACT 1995

Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Download] [Help]

LIFE INSURANCE ACT 1995

TABLE OF PROVISIONS

Long Title

PART 1--PRELIMINARY

1. Short title
2. Commencement
3. Objects of Act
4. Additional operation of Act
5. Exclusion of certain State insurance
6. Extension of Act to Norfolk Island
7. General administration of Act
7A. Determination that certain provisions do not apply
7B. Breach of condition of a determination under section 7A
8. Dictionary
8A. Approved manner and form of applications and notices

PART 2--EXPLANATION--OF KEY CONCEPTS

9. Life policy
9A. Continuous disability policy
10. Issue and ownership of policies
11. Life insurance business
12. Classes of life insurance business
12A. Declarations that insurance or annuity business is life insurance business
12B. Declarations that other financial business is life insurance business
13. Business of a statutory fund
14. Investment account benefits, investment - linked benefits
15. Participating, non - participating benefits
15A. Relevant group of bodies corporate
16. Related bodies corporate and subsidiaries

PART 2A--SPECIAL--PROVISIONS RELATING TO LIFE COMPANIES THAT ARE FRIENDLY SOCIETIES

Division 1--Preliminary

16A. Overview
16B. Definitions

Division 2--Friendly societies and how this Act applies to them

16C. What is a friendly society?
16D. Act applies to friendly societies in accordance with this Part
16E. Restriction on use of expression friendly society

Division 3--Modified operation of key concepts

16F. Issue, ownership etc. of policies

Division 4--Modified operation of provisions relating to statutory funds

Subdivision 1--Modifications

16G. Act generally applies as if references to a statutory fund were references to an approved benefit fund
16GA. Modification of section 30
16H. Modification of section 34
16HA. Modification of section 35
16HB. Modification of section 36
16I. Modification of section 38
16J. Modification of section 43
16K. Modification of section 45
16KA. Other modifications of Part 4

Subdivision 2--Approved benefit fund rules

16L. Approval of benefit fund rules
16N. When benefit fund rules approved by APRA come into force
16O. Benefit fund rules approved by APRA and in force form part of company's constitution
16P. Amendment of approved benefit fund rules not effective unless approved by APRA
16Q. Amendment of approved benefit fund rules on initiative of friendly society
16R. Amendment of approved benefit fund rules as required by APRA
16T. When amendment of benefit fund rules approved or determined by APRA come into force
16U. Approval of consequential amendments of company's constitution
16V. Consequential amendments of constitution as required by APRA
16X. When consequential amendments approved or determined by APRA come into force
16Y. Consequential amendments approved by APRA and in force take effect as amendments of company's constitution
16Z. Contractual effect of approved benefit fund rules and policies

Division 5--Modified operation of provisions relating to financial management

16ZAA. Modification of Part 6

Division 6--Modified operation of provisions relating to policies

16ZAB. Modification of section 198
16ZA. Assignment of an interest in a benefit fund that is, because of section 16F, taken to be a policy
16ZAAA. Modification of section 201
16ZAAB. Modification of section 213
16ZAAC. Modification of Division 7 of Part 10
16ZAAD. Modification of section 226
16ZAAE. Modification of section 227
16ZAAF. Modification of section 229

Division 7--Other modifications

16ZAAG. Modification of section 242
16ZB. Certain friendly societies may continue to carry on health insurance business--modified operation of this Act
16ZC. Other modifications

PART 2B--SPECIAL--PROVISIONS RELATING TO AUSTRALIAN BRANCHES OF FOREIGN LIFE INSURANCE COMPANIES

16ZD. Eligible foreign life insurance company
16ZE. Limited application of Act to eligible foreign life insurance companies
16ZF. Compliance Committee of eligible foreign life insurance company
16ZG. Address for service of eligible foreign life insurance companies

PART 3--REGISTRATION--OF LIFE COMPANIES AND THEIR NOHCS

Division 1--Registration of life companies

17. When registration is required
18. Certain activities not regarded as carrying on life business
19. Certain persons taken to carry on life business etc.
20. Application for registration
21. Decision on application for registration
22. Conditions on registration
23. Breach of registration conditions
26. When APRA may revoke registration
27. Voluntary deregistration
27A. Assignment of liabilities to enable revocation

Division 2--Registration of NOHCs of life companies

28A. Registration as a NOHC
28B. Conditions on a NOHC registration
28BA. Breach of conditions on a NOHC registration
28C. When APRA may revoke a NOHC registration
28D. When APRA must revoke a NOHC registration
28E. Continuation of body corporate's NOHC registration
28. Continuation of effect of company's registration
28AA. APRA may give notice to ensure that life company has a registered NOHC

PART 4--STATUTORY--FUNDS OF LIFE COMPANIES

Division 1--General requirements

29. What is a statutory fund?
30. Outline of requirements regarding statutory funds
31. Requirement that company have statutory funds
32. Duty of company in relation to statutory funds
33. Notice to APRA when fund established
34. Assets of statutory fund
35. Identification of policies referable to statutory fund
36. Payments to statutory fund
37. Capital payments to statutory funds
38. Expenditure and application of statutory fund
38A. Charges relating to derivatives
38B. Friendly societies mortgaging and charging assets of approved benefit funds
39. Prohibition of reinsurance between funds
40. Mortgages etc. of assets
41. Effect of non - compliance with section 38 ï‚¾ general
41A. Effect of non - compliance with section 38 ï‚¾ certain classes of transactions
42. Investment performance guarantee--limit of certain liabilities
43. Investment of statutory funds
43A. Investment of statutory funds--investment in subsidiaries of life company
45. Transfer of assets between funds
46. Restriction on restructure or termination of statutory funds
47. Ascertainment of income and outgoings of a statutory fund

Division 2--Duties and liabilities of directors etc.

48. Duty of directors in relation to statutory funds
49. APRA may give notice
50. Liability of directors
51. APRA's power to sue in the name of a company

Division 3--Restructure and termination of statutory funds

52. Restructure of statutory funds
53. Termination of statutory funds

Division 4--Additional requirements for transfer of policies between statutory funds by endorsement

55. Additional requirements for transfer of policies between statutory funds by endorsement

Division 5--Allocation of profits and losses and capital payments

56. Interpretation
57. Obligation to allocate operating profit or loss
58. Operating profit etc.
59. Allocation of operating profit etc.
60. Basis of allocation of operating profit etc.

Division 6--Distribution of retained profits and shareholders' capital

61. Interpretation
62. Distribution of retained profits
63. Distribution of shareholders' capital

PART 6--FINANCIAL--MANAGEMENT OF LIFE COMPANIES ETC.

Division 1--Preliminary

74. Interpretation

Division 2--Financial records and statements

75. Financial records--Australian and Australian/overseas funds
76. Financial records--overseas funds
76A. Keeping records
77. Financial year of a life company
78. Treatment of income and outgoings relating to mixed business
79. Treatment of income or outgoings relating to 2 or more categories of business etc.
80. Basis of apportionment
81. Treatment of appreciation and depreciation of assets
83. Requirement for life company to have an auditor
83A. Additional auditors
83B. Compliance with prudential standards
84. Appointment of auditor
85. Ending an appointment as auditor
86. Life company must enable auditors
87. Notification of appointment etc. of auditor
88. Obligations of auditors of certain bodies to report to bodies and APRA
88A. Auditor may give information to APRA
88B. Duty of auditor to give information when required
89. Qualified privilege of auditors
90. Auditor must notify APRA of attempts to unduly influence etc. the auditor
91. Giving auditor false or misleading information

Division 3--Appointed actuaries

93. Appointment
94. Ending an appointment as actuary
95. Notification of appointment etc.
96. Compliance with prudential standards
97. Role of actuary
98. Actuary's obligation to report to APRA
98A. Appointed actuary may give information to APRA
98B. Duty of appointed actuary to give information when required
99. Qualified privilege of appointed actuary

Division 8--Miscellaneous

114. Method of valuing policy liabilities
124. Policy owner's right to copy of reporting documents
125. Referring matters to professional associations for auditors and actuaries
125A. APRA may direct removal of auditor or actuary

PART 7--MONITORING--AND INVESTIGATION OF LIFE COMPANIES AND REGISTERED NOHCS

Division 1--Preliminary

126. Interpretation
127. Appointment of authorised persons
128. Associated body corporate
129. Related bodies corporate

Division 2--Monitoring life companies and registered NOHCs

130. Purpose of Division
131. Requirement to give information to Regulator
132. Requirement to produce records
132A. Requirement to notify APRA of certain matters
133. Access to premises
133A. Enforceable undertakings

Division 3--Investigation by APRA

135. Giving of show cause notice
136. Grounds for giving of show cause notice
137. Decision to investigate
138. Investigation of associated body corporate
139. Investigation procedure
140. Access to premises for purposes of investigation
141. Requirement to produce records
142. Regulator's power to require assistance
143. Application for warrant to seize records not produced
144. Grant of warrant
145. Powers if records produced or seized
146. Powers if records not produced
147. Offences related to investigations
149. Regulator must give body corporate written summary of conclusions
151. Identity cards

Division 4--Special provisions relating to the execution of warrants

152. Interpretation
153. Use of equipment to examine or process things
154. Use of electronic equipment at premises
155. Compensation for damage to electronic equipment
156. Copies of seized things to be provided

Division 5--Protections in relation to information

156F. Self - incrimination

PART 8--JUDICIAL--MANAGEMENT, OTHER EXTERNAL ADMINISTRATION AND WINDING UP

Division 1--Judicial management

157. Application for order for judicial management
158. Order for judicial management after investigation
159. Order for judicial management on other grounds
160. Commencement of judicial management
161. Moratorium--effect of judicial management on court and tribunal proceedings
161A. Moratorium--effect of judicial management on enforcement process regarding property
161B. Moratorium--effect of judicial management on disposal of property
161C. Moratorium--Restrictions on exercise of third party property rights
161D. Moratorium--effect of judicial management on supply of essential services
161E. Moratorium--effect of judicial management on annual general meeting
163. Appointment of judicial manager
164. Remuneration of judicial manager
165. Effect of judicial management on powers of officers etc.
165A. Effect on external administrator of judicial manager managing company
165B. Judicial management not ground for denial of obligations
166. Continued application of other Parts of Act
167. Court's control of judicial manager
168. Powers of judicial manager
168A. Judicial manager's additional powers to facilitate recapitalisation
168B. Considering report before acting under section 168A
168C. Act under section 168A not ground for denial of obligations
169. Application by APRA for instructions to judicial manager
170. Request by APRA for information
171. Duration of judicial management
172. Cancellation of judicial management
173. Judicial manager must conduct management efficiently and economically
174. Disclaimer of onerous property
175. Report by judicial manager
176. Order of Court on report of judicial manager
177. Transfer of business to another company
178. Resignation
179. Immunity
179A. Exceptions to Part IV of the Competition and Consumer Act 2010

Division 1AA--Statutory management of life company

Subdivision A--General provisions relating to statutory management

179AA. Consequences of inability or failure of life company etc. to meet certain requirements
179AB. Start of control of body corporate's business by Life Insurance Act statutory manager
179AC. Life Insurance Act statutory managers--termination of control

Subdivision B--Provisions dealing with control of a body corporate's business by a Life Insurance Act statutory manager

179AD. Life Insurance Act statutory manager's powers and functions
179AE. Safeguards on exercise of Life Insurance Act statutory manager's powers and functions
179AF. Life Insurance Act statutory manager's additional powers to facilitate recapitalisation
179AG. Considering report before acting under section 179AF
179AH. Act under section 179AF not ground for denying obligation
179AI. APRA may require a person to give information etc. for the purposes of this Division
179AJ. Administrator in control--additional powers to recommend action by APRA
179AK. Life Insurance Act statutory manager's liabilities and duties
179AL. Transaction by Life Insurance Act statutory manager not voidable under section 588FE of the Corporations Act 2001
179AM. Administrator in control--additional duties
179AN. Administrator in control--additional duties where action may affect financial system stability in Australia
179AO. Termination of Life Insurance Act statutory manager's appointment
179AP. Effect on directors of Life Insurance Act statutory manager taking control of a body corporate's business
179AQ. Effect on external administrator of Life Insurance Act statutory manager taking control of a body corporate's business
179AR. Moratorium--effect of Life Insurance Act statutory management on court and tribunal proceedings
179AS. Moratorium--effect of Life Insurance Act statutory management on enforcement process regarding property
179AT. Moratorium--effect of Life Insurance Act statutory management on disposal of property
179AU. Moratorium--Restrictions on exercise of third party property rights
179AV. Moratorium--effect of Life Insurance Act statutory management on supply of essential services
179AW. Moratorium--effect of Life Insurance Act statutory management on annual general meeting
179AX. Life Insurance Act statutory manager being in control not grounds for denial of obligations
179AY. Application of other provisions
179AZ. Costs of statutory management
179AZA. APRA must report to Minister and publish information about statutory management
179AZB. Exceptions to Part IV of the Competition and Consumer Act 2010

Division 1A--Other external administration

179B. Relationship of this Division with Chapter 5 of the Corporations Act 2001
179C. Involving APRA in proposed appointment of external administrators of life companies and NOHCs

Division 2--Winding-up

180. Winding - up of life companies
181. Order on application by APRA
182. Operation of Corporations Act
183. Notification to APRA regarding applications by liquidator
183A. Application by liquidator for directions--voluntary winding up of friendly society
183B. Application by APRA--voluntary winding up of friendly society
184. Application by APRA for directions
185. APRA's power to ask for information
186. Determination of amounts to be treated as liabilities of life company
187. Application of statutory fund assets
188. Liability of directors for loss to statutory fund

PART 9--TRANSFERS--AND AMALGAMATIONS OF LIFE INSURANCE BUSINESS

189. Interpretation
190. Transfer or amalgamation of life insurance business
191. Steps to be taken before application for confirmation
192. Actuarial report on scheme
193. Application to Court
194. Confirmation of scheme
195. Effect of confirmation etc.
196. Costs of actuary's report
197. Documents to be given to APRA in case of transfer or amalgamation

PART 10--PROVISIONS--RELATING TO POLICIES

Division 1--Issue of policies

198. Alteration of proposal and policy forms
199. Capacity of young persons to insure etc.

Division 2--Assignments and mortgages

200. Assignment of policy
201. Mortgages and trusts
202. Effect of notice of trust etc.
203. Transfer of policy after change of trustee

Division 2A--Restriction on assignment or commutation of payments under structured settlements and structured orders

203A. Definitions
203B. Application of Division to tax - exempt annuities and lump sums
203C. Assignments or commutations of tax - exempt annuities are generally not effective
203D. Assignments or commutations of tax - exempt lump sums are not effective
203E. Relationship with Division 2

Division 3--Protection of policies

204. Protection of interest of insured
205. Protection of policy money on person's death

Division 4--Surrender values, paid-up policies and non-forfeiture of policies

206. Application of Division
207. Surrender of policies
208. Relaxation of company's obligations to surrender
209. Paid - up policies
210. Non - forfeiture of policies in certain cases of non - payment of premiums

Division 5--Payment of policy money

211. Probate or administration not necessary in certain cases--a single policy
212. Probate or administration not necessary in certain cases--2 or more policies
213. Death of policy owner who is not the life insured
214. Company not bound to see to the application of money paid by it
215. Power to pay money into Court
216. Unclaimed money
216AA. Publication etc. of information in unclaimed money register
216A. Disclosure of information relating to unclaimed money
217. No deduction in respect of other policies

Division 6--Children's advancement policies

218. Interpretation
219. Property in child's advancement policy
220. Death or bankruptcy of policy owner

Division 7--Lost or destroyed policy documents

221. Lost or destroyed policy--issue of replacement policy document
222. Form of replacement policy document
223. Other matters relating to certain replacement policy documents
224. Claim under policy where policy document lost or destroyed
225. Application of sections 221, 222, 223 and 224 to replacement policy document

Division 8--General

226. Registers
227. Registration of policies
228. Effect of suicide on policy
229. Condition as to war risk void
230. Policies not invalidated by contraventions of the Act

PART 10A--PRUDENTIAL--STANDARDS AND DIRECTIONS

Division 1--Prudential standards

230A. APRA may make prudential standards for life companies, registered NOHCs and subsidiaries
230AAA. Obligation to comply with the prudential standards

Division 1A--Conversion and write-off provisions

230AAB. Definitions
230AAC. Conversion and write - off provisions
230AAD. Conversion or write - off etc. not grounds for denial of obligations

Division 2--Directions

Subdivision A--Recapitalisation directions

230AA. Who this Subdivision applies to
230AB. Recapitalisation direction by APRA
230AC. Additional contents of a recapitalisation direction
230AD. Compliance with a recapitalisation direction
230AE. APRA must obtain expert's report on the fair value of shares etc.
230AF. Determination of the fair value of shares by an expert
230AG. Determination of the fair value of rights by an expert
230AH. Ascertaining the fair value of other capital instruments
230AI. Contravention of certain provisions does not affect the validity of recapitalisation direction etc.
230AJ. Recapitalisation direction not grounds for denial of obligations
230AK. Supply of information about issue and revocation of recapitalisation directions
230AL. Non - compliance with a recapitalisation direction
230AM. Exceptions to Part IV of the Competition and Consumer Act 2010

Subdivision B--Other directions

230B. APRA may give directions in certain circumstances
230C. Direction not grounds for denial of obligations
230D. Supply of information about issue and revocation of directions
230F. Non - compliance with a direction

Subdivision C--Secrecy and disclosure provisions relating to all directions

231. APRA may determine that a direction is covered by secrecy provision
231A. Secrecy relating to directions
231B. Disclosure of publicly available information
231C. Disclosure allowed by APRA
231D. Disclosure to legal representative for purpose of seeking legal advice
231E. Disclosure allowed by APRA Act secrecy provision
231F. Disclosure in circumstances set out in the regulations
231G. Disclosure for purpose
231H. Exceptions operate independently

PART 11--MISCELLANEOUS

233. Operation of State and Territory laws
233A. Transfer by life insurance company to statutory fund
234. Prohibition of mixed insurance business
235. Injunctions
236. Review of certain decisions
237. Constitution and procedure of Tribunal
240. Register of Life Companies and Non - Operating Holding Companies
241. Inspection of Register etc.
242. Non - shareholder members of life company--voting by post
245. Disqualified persons not to be directors, principal executive officers etc. of life companies
245A. Court power of disqualification
245B. Court power to revoke or vary a disqualification etc.
245C. Privilege against exposure to penalty--disqualification under section 245A
246. Principal executive officer
246A. Protection from liability--general
246B. Protection from liability--directions and secrecy
246C. Protection from liability--provisions do not limit each other
247. Protection of person who discloses information etc. under compulsion
248. Offences
250. Conduct by directors, employees and agents
251. Compensation for acquisition of property
251AA. Act has effect despite the Corporations Act
251A. Authorising contracts etc. for protecting policy owners' interests and financial system stability
251B. Borrowing funds for payments under authorised contracts etc.
253. Regulations

PART 12--HOW--THIS ACT AFFECTS EXISTING LIFE COMPANIES ETC.

254. Companies registered under Life Insurance Act 1945
264. Saving provision: sections 83, 84 and 94 of the Life Insurance Act 1945
265. Transitional provision--industrial policies
SCHEDULE 1 Dictionary
SCHEDULE 2 Modifications relating to friendly societies

AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback