Insurance Contracts Regulations (Amendment) (Cth)

Statutory Rules 1997No. 226 1

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Insurance Contracts Regulations2 (Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Insurance Contracts Act 1984.

Dated 20 August 1997.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

IAN CAMPBELL

Parliamentary Secretary to the Treasurer

for the

Treasurer

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1.   Amendment

1.1   The Insurance Contracts Regulations are amended as set out in regulation 2.

[Note: These Regulations commence on gazettal: see Acts Interpretation

Act 1901, s. 48.]

2.   Regulation 32 (Prescribed rate—section 57)

2.1   Omit the regulation, substitute:

Rate of interest on withheld payment—section 57 of Act

 “32. (1) For subsection 57 (3) of the Act, the rate applicable to a day in respect of which interest is payable by an insurer, is the rate worked out under the following formula:

Y + 3%

where:

‘Y’ is the rate of:

• (a)

  10-year Treasury Bond yield at the end of the half‑financial year ending in the period that, in relation to the withheld amount, is mentioned in subsection 57 (2) of the Act, or:

• (b)

  if more than one half-financial year has ended during that period—the mean of the rates of the 10-year Treasury Bond yield at the end of each of those half‑financial years; or

• (c)

  if no half-financial year has ended during that period—the 10-year Treasury Bond yield at the end of the half‑financial year immediately preceding the commencement of that period.

 “(2) In subregulation (1), ‘10-year Treasury Bond yield’ means the rate known as the 10-year Treasury Bond yield, published by the Reserve Bank of Australia.

 “(3) In subregulation (1), ‘mean’, in relation to rates, means, if the mean of the rates is not a whole number, or does not end in .75, .50 or .25, the mean rate rounded to the nearest lower quarter of 1%.”.

3.   Transitional

3.1 The rate at which interest is payable in respect of a day included in the period referred to in subsection 57 (2) of the Act, in relation to a withheld amount, that is a day occurring before the commencement of the amendment of regulation 32 of the Insurance Contracts Regulations effected by these Regulations, is the rate prescribed by regulation 32 of those Regulations immediately before the commencement of that amendment. 

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 27 August 1997.

2. Statutory Rules 1985 No. 162 as amended by 1990 No. 444; 1994 No. 327; 1996 No. 304.