Authorisation to be a NOHC of a general insurer 2021
– RACT Investment Holdings Pty Ltd
Insurance Act 1973
To: RACT Investment Holdings Pty Ltd ABN 17 651 441 548 (the body corporate)
I, Brandon Kong Leong Khoo, a delegate of APRA, under section 18(3) of the Insurance Act 1973 (the Act) authorise the body corporate as a NOHC.
Under section 19(1)(a) of the Act, I impose the condition set out in the schedule on the NOHC authorisation.
This authorisation commences on the day it is made. Dated: 26 November 2021
[Signed]
Brandon Kong Leong Khoo Executive Director Insurance Division
Interpretation
In this notice:
APRA means the Australian Prudential Regulation Authority. general insurer has the meaning given by section 11 of the Act. NOHC has the meaning given in section 3(1) of the Act.
NOHC authorisation has the meaning given in section 3(1) of the Act.
subsidiary has the meaning given in section 4 of the Act.
Notes
Note 1 A notice of authorisation must be published in the Gazette.
Note 2 This NOHC authorisation operates as an authorisation in relation to the body corporate and any general insurers that are subsidiaries of the body corporate from time to time.
Note 3 Part VI of the Act applies to a decision to refuse to authorise and a decision to impose conditions on an authorisation. Note 4 You may request APRA reconsider the decision to impose the condition on the NOHC authorisation in accordance with subsection 63(2) of the Act. The request for reconsideration must be made in writing, must set out the reasons for making the request, and must be given to APRA within 21 days after the day on which you first received notice of this decision, or within such further period as APRA allows. If you are dissatisfied with the outcome of APRA’s reconsideration of the decision, you may, subject to the Administrative Appeals Tribunal Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision.
Schedule – condition
The NOHC must not hold any other subsidiary company (other than RACT Insurance Pty. Ltd. ABN 96 068 167 804) without APRA’s prior written agreement.
Overview
The Insurance Act 1973 was enacted to regulate the insurance industry in Australia, ensuring that it operates in a manner that is fair and efficient, and that protects the interests of policyholders. The Act was introduced to address gaps in the regulation of insurance companies, particularly those that posed systemic risks to the financial system. The Australian Prudential Regulation Authority (APRA) is responsible for administering the Act and ensuring compliance with its provisions. The policy objective of the Act is to maintain a stable and sound insurance market, by regulating the activities of insurance companies and their related entities, and by promoting sound risk management practices. The Act provides APRA with powers to authorise, supervise and regulate insurance companies and related entities, and to take action in cases of non-compliance or systemic risk.
Scope and Application
This legislative document, titled "Authorisation to be a NOHC of a general insurer 2021– RACT Investment Holdings Pty Ltd", pertains to the Insurance Act 1973 and concerns the authorisation of RACT Investment Holdings Pty Ltd, an Australian body corporate, as a non-operating holding company (NOHC) of a general insurer. The authorisation is granted by Brandon Kong Leong Khoo, an executive director and delegate of the Australian Prudential Regulation Authority (APRA), under the authority vested in him by section 18(3) of the Act. This authorisation applies specifically to RACT Investment Holdings Pty Ltd and any general insurers that may be its subsidiaries, as defined by section 4 of the Act. The NOHC authorisation is subject to a condition outlined in the attached schedule, which restricts the NOHC from holding any subsidiary company other than RACT Insurance Pty. Ltd without prior written agreement from APRA. The authorisation extends to the Commonwealth of Australia and adheres to the conditions set forth in the Insurance Act 1973, with recourse to reconsideration and review as provided for under the Act and the Administrative Appeals Tribunal Act 1975.
Key Provisions
The primary sections of this legislation, specifically the Insurance Act 1973, detail the authorisation for RACT Investment Holdings Pty Ltd as a Non-Operating Holding Company (NOHC) for a general insurer. Section 18(3) allows a delegate of the Australian Prudential Regulation Authority (APRA), in this case Brandon Kong Leong Khoo, to grant such authorisation, while section 19(1)(a) imposes conditions on this authorisation. The authorisation, which comes into effect on the date it is issued, mandates that RACT Investment Holdings Pty Ltd can operate as a NOHC, subject to certain conditions outlined in the accompanying schedule.
RACT Investment Holdings Pty Ltd, as a NOHC, is bound by several obligations and requirements under the Act. Firstly, it must adhere to the condition set out in the schedule, which specifies that it cannot hold any subsidiary company (other than RACT Insurance Pty Ltd) without APRA’s prior written consent. This ensures that the NOHC’s operations and holdings are regulated and approved by APRA, maintaining a level of oversight over the financial and operational stability of the insurer.
Failure to comply with the conditions imposed by APRA can result in significant consequences. The Act does not specify exact penalties within the document, but breaches of conditions set by APRA under the Insurance Act 1973 can lead to severe civil or criminal penalties, including fines and potential disqualification from holding the authorisation. Additionally, if dissatisfied with APRA’s decision to impose conditions, RACT Investment Holdings Pty Ltd has the right to request reconsideration within 21 days, as outlined in subsection 63(2) of the Act. If the reconsideration outcome is still unsatisfactory, further review can be sought through the Administrative Appeals Tribunal under the Administrative Appeals Tribunal Act 1975.
This authorisation is intended to ensure that RACT Investment Holdings Pty Ltd operates within the regulatory framework established by APRA, thereby safeguarding the interests of policyholders and maintaining the stability of the insurance market. The conditions and obligations serve to prevent undue risk and ensure that the NOHC’s activities do not compromise the financial health of the general insurer.