Life Insurance Regulations (Amendment) (Cth)

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Statutory Rules 1998No. 191 1

__________________

Life Insurance Regulations2 (Amendment)

I, WILLIAM PATRICK DEANE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulations under the Life Insurance Act 1995.

Dated 30 June 1998.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

ian campbell

Parliamentary Secretary to the Treasurer

for the

Treasurer

____________

1.   Commencement

1.1   Subject to subregulations 1.2 and 1.3, these regulations commence on 1 July 1998.

1.2   Regulations 9 and 20 commence on 30 June 1998.

2.   Amendment

2.1   The Life Insurance Regulations are amended as set out in these regulations.

3.   Regulation 3.02 (Time for giving notice—change of circumstances)

3.1   Omit “the Commissioner”, substitute “APRA”.

4.   New regulation 4.00A

4.1   After regulation 4.00, insert:

Charges over the assets of statutory funds: derivative contracts (Act, s 38 (3) (c))

 “4.00A. (1) A life company may give a charge over, or in relation to, an asset of a statutory fund if:

  • (a)

    the charge is given in relation to a derivatives contract entered into:

    • (i)

      by, or on behalf of, the life company; or

    • (ii)

      by a broker on the instructions, or on account, of the company; or

    • (iii)

      by a broker for the benefit of the company; and

  • (b)

    the charge is given in order to comply with the rules of an approved body (as defined in subregulation (2)) that requires the performance of obligations in relation to the derivatives contract to be secured; and

  • (c)

    the life company has in place a risk management statement that sets out:

    • (i)

      policies for the use of derivatives that include an analysis of the risks associated with the use of derivatives within the investment strategy of the company; and

    • (ii)

      controls on the use of derivatives that take into consideration the expertise of staff; and

    • (iii)

      compliance processes to ensure that the controls are effective (for example, reporting procedures, internal and external audits and staff management procedures); and

  • (d)

    the investment to which the charge relates is made in accordance with the risk management statement.

 “(2) In this regulation:

approved body means:

  • (a)

    Australian Stock Exchange Ltd;

  • (b)

    Options Clearing House Pty Ltd;

  • (c)

    Sydney Futures Exchange Ltd;

  • (d)

    Sydney Futures Exchange Clearing House Pty Ltd;

  • (e)

    a body that is an approved foreign exchange within the meaning of regulation 1.2A.02 of the Corporations Regulations;

  • (f)

    a body specified in Schedule 11 to those Regulations;

  • (g)

    a body that performs clearing house functions in relation to a body mentioned in paragraph (e) or (f) (the second body) in accordance with the rules of the second body or a law of the country where the second body is incorporated.

derivative means a financial asset or liability the value of which depends on, or is derived from, other assets, liabilities or indices.

derivatives contract means an option contract or futures contract relating to any right, liability or thing, including in particular:

  • (a)

    an option contract as defined in section 9 of the Corporations Law; and

  • (b)

    a futures contract within the meaning of section 72 of that Law; and

  • (c)

    an agreement to which section 72A or 92A of the Law applies.”.

5.   Regulation 4.01B (Ascertainment of income and outgoings of statutory funds)

5.1   Omit “Commissioner’s rules”, substitute “Prudential Rules”.

6.   Regulation 9.01 (Copy of scheme for transfer etc to be given to APRA)

6.1   Omit “the Commissioner”, substitute “APRA”.

7.   Regulation 9.02 (Notice of intention to apply for confirmation of scheme)

7.1   Subregulation 9.02 (1):

Omit “the Commissioner” (wherever occurring), substitute “APRA”.

7.2   Paragraph 9.02 (4) (b):

Omit “the Commissioner”, substitute “APRA”.

8.   Regulation 9.04 (Documents to be lodged with APRA)

8.1   Subregulations 9.04 (1) and (3):

Omit “the Commissioner”, substitute “APRA”.

8.2   Subregulation 9.04 (4):

Omit “the Commissioner” (wherever occurring), substitute “APRA”.

9. Regulation 10.03 (Division 4 of Part 10 of the Act not to apply to certain life policies (Act, s 206 (2)))

9.1   Omit the regulation.

10.   Regulation 10.05A (Unclaimed money—statements)

10.1   Subregulations 10.05A (3) and (5):

Omit “the Commissioner”, substitute “ASIC”.

11.   Regulation 10.05B (Public notice of unclaimed moneys)

11.1   Omit “The Commissioner”, substitute “ASIC”.

11.2   Omit “the Commissioner”, substitute “ASIC”.

12.   Regulation 11.00 (Form and content of Register of Life Companies)

12.1   Paragraph 11.00 (b):

Omit the paragraph, substitute:

  • “(b)

    the State or Territory where the company is incorporated and each State or Territory where the company intends to carry on business; and”.

13.   Regulation 11.01 (Fee for inspection or copying of documents)

13.1   Subregulation 11.01 (1):

Omit “the Commissioner”, substitute “APRA”.

14.   Regulation 11.02 (Financial sector supervisory agencies (Act, s 251))

14.1   Omit the regulation.

15.   Regulation 11.03 (Law enforcement agencies (Act, s 251))

15.1   Omit the regulation.

16.   Regulation 11.04 (Overseas financial sector supervisory agencies (Act, s 251))

16.1   Omit the regulation.

17.   Regulation 13.01 (Definition of eligible assets—dictionary)

17.1   Subparagraph 13.01 (2) (b) (i):

Omit “a bank”, substitute “an ADI”.

18.   Regulation 13.02 (Definition of superannuation policy—dictionary)

18.1   Omit “classes”, substitute “kinds”.

19.   Schedule 1 (Requirements for applications for registration)

19.1   Part A, paragraph (1) (b):

Omit the paragraph, substitute:

  • “(b)

    the State or Territory where the company is incorporated and each State or Territory where the company intends to carry on business;”.

20.   Schedule 2 (Modification of Division 4 of Part 10 of the Act (Surrender values, paid-up policies and non-forfeiture of policies))

20.1   Definition of relevant actuarial standard:

Add at the end:

“; and (c) in force on 29 June 1998.”.

21.   Schedule 3 (Modification of the operation of Divisions 5 and 6 of Part 4 of the Act in relation to existing life companies)

21.1   Clause 3 (substituted subsection 58 (2), definitions of balance of the revenue account and net liabilities):

Omit “Commissioner’s rules”, substitute “Prudential Rules”.

_______________________________________________________

NOTES

1. Notified in the Commonwealth of Australia Gazette on 30 June 1998.

2. Statutory Rules 1995 No. 141 as amended by 1995 Nos. 317 and 431; 1996 Nos. 89 and 305; 1997 Nos. 100, 119 and 239.

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