Insurance Regulations (Amendment) (Cth)

Statutory Rules 1997No. 172 1

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Insurance 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 Act 1973.

Dated 25 June 1997.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

C. R. KEMP

Assistant Treasurer

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1.   Amendment

1.1   The Insurance Regulations are amended as set out in these Regulations.

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

Act 1901, s. 48.]

2.   Schedule (Forms)

2.1   Form 4, Part A:

Omit: “Name of Director, Secretary or Agent Signature Date”,

substitute:

“MINIMUM SOLVENCY REQUIREMENTS
Name of Body Corporate
ISC Company No
Balance Date
Inside Australia $’000	Total   $’000
Total Assets—see adp code 93	________	_______
less Total Liabilities—see adp code 124	________	_______
Sub-Total	________	_______
Add Overseas reinsurance assets deemed as inside Australia assets	________
Net Assets	________	_______
less statutory exclusions
(1) premiums outstanding more   than 3 months—see adp codes 4 & 5	________	________
(2) future income tax benefit (tax  losses)—see adp code 34	________	________
(3) intangible assets—see adp code 36	________	________
(4) loans to directors—see adp code 79	________	________
(5) unsecured loans to employees  exceeding $1000—see adp code 80	________	________
(6) related body assets not  accepted for solvency purposes	________	________
(7) other statutory exclusions	________	________
total statutory exclusions	________	_______
Net Assets less Statutory Exclusions	________	_______

SCHEDULE—continued

FORM 4—continued

Inside Australia $’000	Total   $’000
Premium Income	________	________
Net Outstanding Claims Provision
(Outstanding Claims Provision from Form 4 adp code 95 less reinsurance recoverables in respect of claims from Form 4 adp code 9)	________	________
Minimum Solvency Requirements
The value of accepted assets (as defined in the Act) must exceed liabilities by the greatest of:
Minimum Margin; or	__2000__	__2000__
20% of Premium Income; or	________	________
15% of Net Outstanding Claims  Provision	________	________

NOTE: Minimum statutory solvency requirements under the Insurance Act 1973 provide a buffer of surplus net assets over and above commercial solvency. Other factors need to be considered in assessing the overall strength of an authorised insurer including, for example, access to additional capital, reinsurance, managerial and systems strength and whether the insurer has sought approval for all eligible related body assets.

Name of Director, Secretary or Agent Signature Date”.

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 30 June 1997.

2. Statutory Rules 1974 No. 141 as amended by 1976 Nos. 90, 126, 139 and 288; 1977 No. 213; 1980 No. 107; 1981 No. 209; 1985 No. 189; 1987 No. 340; 1990 No. 446; 1992 No. 177; 1994 No. 277; 1995 No. 140; 1996 Nos. 45 and 302.