EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 112
Subject :Â 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.
Section 42 of the Act provides for contracts of insurance to be assigned in such manner as is prescribed where a mortgage is transferred or sold to another party.
Schedule 2 to the Housing Loans Insurance Regulations details the form of assignment. Under the previous prescribed form, a memorandum of assignment listed the name and address of both the assigner and the assignee, the number of each assigned contract and the full name and address of both the borrower and the lender.
To simplify the form of reporting assignments, the new Regulations require that the Corporation insurance contract number only be listed on the memorandum of assignment. Each of the Corporation insurance contracts has a unique number which it is considered will provide sufficient identification of cases for the protection of all parties.
The amendment to the form of assignment was considered
desirable to enable the Corporation to administer efficiently the heavy volume of assignments that could result from development of the secondary mortgage market in Australia.
Details of the Regulations are as follows:
Regulation 1 provides that the Regulations come into operation on 15 June 1985, the date of commencement of other proposed amendments to the Act and Regulations.
Regulation 2 amends Schedule 2 to the Regulations to remove references to the names and addresses of the lender and the borrower.
Authority: Section 47 of the Housing Loans Insurance Act
Overview
The Housing Loans Insurance Act 1965 was enacted to facilitate the establishment of the Housing Loans Insurance Corporation, outlining the Corporation’s powers, duties, staffing, finance, and reporting requirements. This Act was introduced to address the need for a structured approach to insuring housing loans, thereby protecting lenders and borrowers in the event of defaults. The Parliament of Australia enacted this legislation to ensure stability and reliability in the housing loan sector, providing a safeguard that encourages lending and home ownership. The explanatory statement for the Housing Loans Insurance Regulations (Amendment) 1985 further clarifies that the objective of these amendments is to streamline the process of assigning insurance contracts when mortgages are transferred or sold, aiming to enhance the efficiency of the Corporation in managing the growing number of assignments arising from the evolving secondary mortgage market in Australia.
Scope and Application
The Housing Loans Insurance Act 1965 pertains to the establishment of the Housing Loans Insurance Corporation, outlining its powers, duties, staffing, finance, and reporting requirements. It is applicable to the Corporation and the entities or persons it interacts with under its insurance schemes. The Act operates within the jurisdiction of the Commonwealth and applies to all entities and individuals engaging in transactions or conduct related to housing loans insurance in Australia. The Act includes provisions for the assignment of insurance contracts in cases where a mortgage is transferred or sold, as detailed in Schedule 2 of the Housing Loans Insurance Regulations. These Regulations, which are subordinate to the Act, can be amended to refine the processes and reporting requirements. Notably, the recent amendment to the Regulations simplifies the form of assignment by requiring only the unique insurance contract number on the memorandum of assignment, rather than the names and addresses of the lender and borrower. This change was implemented to streamline the administrative burden associated with the increasing volume of assignments in the secondary mortgage market. The Regulations, effective from 15 June 1985, are designed to facilitate efficient administration of the insurance contracts, ensuring that all parties are adequately protected.
Key Provisions
The key operative sections of the Housing Loans Insurance Regulations (Amendment) are primarily concerned with streamlining the process of assigning contracts of insurance under the Housing Loans Insurance Act 1965. Regulation 2, in particular, modifies Schedule 2 to the Regulations by altering the prescribed form of assignment for insurance contracts. Specifically, this regulation eliminates the requirement to list the names and addresses of the lender and the borrower on the memorandum of assignment. Instead, it mandates that only the unique insurance contract number issued by the Corporation be listed. This change is aimed at simplifying the assignment process, especially as the secondary mortgage market in Australia grows (Regulation 2).
The obligations imposed by these Regulations are primarily administrative. They require that all parties involved in the assignment of insurance contracts adhere to the new prescribed form. This includes mortgage lenders, borrowers, and the Corporation itself, who must ensure that all memorandums of assignment accurately reflect the unique insurance contract number. These changes are designed to facilitate the efficient administration of the heavy volume of assignments that could result from the development of the secondary mortgage market.
Breaching these Regulations could lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, it can be inferred that non-compliance with the prescribed form of assignment might result in administrative penalties. These could include fines or other sanctions imposed by the Corporation or relevant authorities. The precise nature of these penalties would typically be outlined in other sections of the Act or in further regulations. The intent behind these measures is to ensure that all parties maintain compliance with the streamlined assignment process, thereby protecting the interests of all stakeholders involved in housing loans insurance.