Insurance (Agents and Brokers) Regulations (Amendment) (Cth)

Statutory Rules 1994

No. 325 1

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Insurance (Agents and Brokers) Regulations 2(Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council and under section 4 of the Acts Interpretation Act 1901, make the following Regulations under the Insurance (Agents and Brokers) Act 1984.

Dated 16 September 1994.

 BILL HAYDEN

 Governor-General

By His Excellency’s Command,

PAUL ELLIOTT

Parliamentary Secretary to the Treasurer

for the Treasurer

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1.   Commencement

1.1 These Regulations commence on the day of commencement of section 12 of the Insurance Laws Amendment Act 1994.

2.   Amendment

2.1   The Insurance (Agents and Brokers) Regulations are amended as set out in these Regulations.

3.   New regulations 2B

3.1   After regulation 2A, insert:

Extent of indemnity under contract of insurance-paragraph 9B (1) (c) of the Act

“2B.

(1) For the purposes of paragraph 9B (1) (c) of the Act, the following provisions of this regulation apply in regard to the extent to which a person is to be indemnified under a contract of insurance in respect of the prescribed liabilities arising out of or in the course of the person's business as an insurance intermediary.

“(2)

Subject to subregulation (3), the maximum amount payable as indemnity to a person under a contract of insurance referred to in subregulation (1):

• (a)

  if the person did not carry on business as an insurance intermediary in the financial year (in this regulation referred to as the ‘previous financial year’) immediately before the financial year in which the contract is entered into—must be not less than $1,000,000; or

• (b)

  if:

  • (i)

    paragraph (a) does not apply; and

  • (ii)

    15% of the total amount of the premiums entered in the accounting records of the person in respect of his or her business as an insurance intermediary in the previous financial year does not exceed $1,000,000;

 must be not less than:

• (iii)

  $1,000,000; or

• (iv)

  the amount equal to 15% of the total amount referred to in subparagraph (ii);

 whichever is the greater; or

• (c)

  if:

  • (i)

    paragraph (a) does not apply; and

  • (ii)

    15% of the total amount of the premiums entered in the accounting records of the person in respect of his or her business as an insurance intermediary in the previous financial year exceeds $1,000,000;

 must be not less than $1,000,000.

“(3)

If a contract of insurance referred to in subregulation (1) makes provision for an excess or deductible:

• (a)

  the amount of the excess or deductible must not, except with the approval of the Commissioner, exceed:

  • (i)

    if paragraph (2) (a) applies in relation to that person—$10,000; or

  • (ii)

    if paragraph (2) (b) or (c) applies in relation to that person:

    • (A)

      $10,000; or

    • (B)

      an amount equal to 2.5% of the insurance brokerage income of that person in respect of the previous financial year;

 whichever is the greater; and

• (b)

  in calculating, for the purposes of subregulation (2), the maximum amount payable as indemnity to a person under a contract of insurance, the amount of the excess or deductible must be subtracted from the amount that would otherwise be the maximum amount payable as indemnity under the contract.

“(4)

In subregulation (3), ‘insurance brokerage income’, in relation to a person, means:

• (a)

  moneys received as brokerage fees or as commission by the person in relation to the person's business as an insurance intermediary; and

• (b)

  interest, dividends or other income received by the person from:

  • (i)

    any account maintained under subsection 26 (1) of the Act;

  • (ii)

    any investment made under subsection 26 (4) of the Act.

[NOTE: Regulation 2B applies only to contracts entered into or renewed after the commencement of section 12 of the Insurance Laws Amendment Act 1994.]”.

4.   Regulation 3A (Extent of indemnity under contract of insurance—paragraph 19 (1) (b) of the Act)

4.1   Omit the regulation.

5.  Regulation 4 (Prescribed form—sub–section 20 (2) of the Act)

5.1   Omit the regulation.

6.   New regulation 6A

6.1   After regulation 6, insert:

Prescribed investments by broker—subparagraph 21 (7) (c) (ii) of the Act

“6A.

For the purposes of subparagraph 21 (7) (c) (ii) of the Act, the investments referred to in subregulation 10 (2) are prescribed.”

7.  Regulation 9A (Prescribed form—paragraph 25A (2) (a) of the Act)

7.1   Omit the regulation.

8.   Regulation 10B (Extent of indemnity under contract of insurance—subparagraph 31B (1) (a) (ii) of the Act)

8.1   Omit the regulation.

9.   Regulation 10C (Extent of indemnity under contract of insurance—subparagraph 31B (1) (b) (ii) of the Act)

9.1   Omit the regulation.

10.  Regulation 10K (Prescribed form—paragraph 31J (2) (a) of the Act

10.1   Omit the regulation.

11.   Schedule (Forms)

11.1   Schedule:

Omit Forms 1 and 2.

12.   Transitional

12.1   The amendments made by regulations 3, 4, 8 and 9 apply only in relation to contracts entered into or renewed on or after the date of commencement of those regulations.

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 23 September 1994.

2. Statutory Rules 1985 No. 367 as amended by 1985 Nos. 368; 1986 No. 351; 1987 No. 339; 1989 No. 277; 1990 No. 447.