EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 111
Subject: HOUSING LOANS INSURANCE ACT 1965
 HOUSING LOANS INSURANCE REGULATIONS (AMENDMENT)
Issued by Authority of the Minister for Housing and Construction
The Housing Loans Insurance Act 1965 (the Act) provides for the establishment of the Housing Loans Insurance Corporation (the Corporation) and details the powers and duties of the Corporation and its staffing, finance and reporting.
Sub-section 47(1) of the Act provides that the Governor-General may make Regulations, not inconsistent with the Act, prescribing all matters which are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Paragraph 47(2) (ab) of the Act which is inserted by the Housing Loans Insurance Amendment Act 1985 (Act No 34 assented to 27 May 1985) provides for the specification of losses to be covered by the Corporation’s insurance contracts issued pursuant to paragraph 17(2) (b) and specified in Regulations. Such Regulations are required to be in accordance with a recommendation made to the Minister by the Corporation.
Paragraph 17(2)(b) of the Act provides power for the Corporation to enter into contracts of insurance in respect of securities issued in the secondary mortgage market.
The Regulations which were recommended to the Minister by the Corporation provide for the Corporation to enter into insurance contracts covering loss that derives from default of a mortgagor on a loan forming part of a pool of mortgage loans securing an instrument traded in the secondary mortgage market. By contributing to investor confidence, the provision of such insurance protection
is expected to support and complement recent State initiatives directed towards development of the secondary mortgage market. It is considered that such a market offers significant potential to attract additional funds for housing.
It is considered that the Regulations meet the immediate requirements of the market. The need for more extensive definition of losses to be covered by the Corporation will be kept under review.
Details of the Regulations are as follows:
After existing Regulation 5 a new Regulation 5A is inserted. The new Regulation specifies a loss for the purposes of paragraph 17(2)(b) of the Act as being a loss directly or indirectly attributable to default by a mortgagor in respect of an approved security relating to a negotiable mortgage security issued by an approved dealer.
The Regulations were made in reliance on Section 4 of the Acts Interpretation Act 1901 which provides that where an Act has not yet come into operation Regulations may be made under that Act but they shall not commence until the Act comes into operation. The Housing Loans Insurance Amendment Act 1985 came into operation on 15 June 1985.
Authority: Section 47 of the Housing Loans Insurance Act