Insurance Regulations (Amendment)

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Insurance Regulations (Amendment) 1997 No. 235

EXPLANATORY STATEMENT

STATUTORY RULES 1997 NO. 235

Issued by the authority of the Assistant Treasurer

Insurance Act 1973

Insurance Regulations (Amendment)

The Insurance Act 1973 (the Act) and the Insurance Regulations (the Principal Regulations) establish a scheme of prudential supervision of the general insurance industry.

Section 132 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.

Section 126 of the Act provides for secrecy in respect of information acquired for purposes of the Act. The Financial Laws Amendment Act 1997, which commenced on 30 June 1997, amended Section 126 such that information may be disclosed to prescribed financial sector supervisory agencies, law enforcement agencies and overseas financial sector supervisory agencies.

The regulations amend the Principal Regulations to prescribe financial sector supervisory agencies, law enforcement agencies and overseas financial sector supervisory agencies to whom a compliance officer, pursuant to Section 126 of the Act, may disclose protected information or documents acquired in the course of performing his or her duties.

Section 126 and the amendments to the Principal Regulations are aimed at facilitating the ability of the Insurance and Superannuation Commission to act quickly to exchange information to prevent and/or manage a crisis situation within financial conglomerates.

The regulations are described in detail in the attachment.

ATTACHMENT

Regulation 1- Amendment

Regulation 1 is explanatory, and includes a note that these regulations commence on gazettal.

Regulation 2 - New Regulations 30, 31 and 32

Regulation 2 inserts three new regulations, 30, 31 and 32 into the Principal Regulations, for the purposes of Section 126 of the Act.

Regulation 30 - Financial sector supervisory agency

Section 126 of the Act generally prohibits a compliance officer from disclosing protected information or producing protected documents, other than for the purposes of the Act or any other Act administered by the Insurance and Superannuation Commissioner, that have been acquired by the compliance officer in the course of performing his or her duties as a compliance officer.

Certain exceptions to this general rule are provided for in section 126. Paragraph 126(4)(c) provides that protected information may be disclosed, or protected documents produced, to a financial sector supervisory agency for the purposes of the performance of any of the agency's functions or the exercise of any of its powers.

'Financial sector supervisory agency' is defined in subsection 126(1) of the Act as meaning 'a person or body declared by the regulations to be a financial sector supervisory agency for the purposes of this section'.

Regulation 30 prescribes the financial sector supervisory agencies for the purposes of subsection 126(1) of the Act.

Regulation 31 - Law enforcement agency

Section 126 of the Act generally prohibits a compliance officer from disclosing protected information or producing protected documents, other than for the purposes of the Act or any other Act administered by the Insurance and Superannuation Commissioner, that have been acquired by the compliance officer in the course of performing his or her duties as a compliance officer.

Certain exceptions to this general rule are provided for in section 126. Paragraph 126(5)(a) and subsection 126(6) provide that protected information may be disclosed, or protected documents produced, to a law enforcement agency for the purposes of the performance by the agency of its functions in relation to an offence or alleged offence against a law of the Commonwealth, of a State or of a Territory.

'Law enforcement agency' is defined in subsection 126(1) of the Act as meaning 'a, person or body declared by the regulations to be a law enforcement agency for the purposes of this section'.

Regulation 31 prescribes the law enforcement agencies for the purposes of subsection 126(1) of the Act.

Regulation 32 - Overseas financial sector supervisory agency

Section 126 of the Act generally prohibits a compliance officer from disclosing protected information or producing protected documents, other than for the purposes of the Act or any other Act administered by the Insurance and Superannuation Commissioner, that have been acquired by the compliance officer in the course of performing his or her duties as a compliance officer.

Certain exceptions to this general rule are provided for in section 126. Paragraph 126(4)(d) provides that protected information may be disclosed, or protected documents produced, to an overseas financial sector supervisory agency for the purposes of the performance of any of the agency's functions or the exercise of any of its powers.

'Overseas financial sector supervisory agency' is defined in subsection 126(1) of the Act as meaning 'a person or body declared by the regulations to be an overseas financial sector supervisory agency for the purposes of this section'.

Regulation 30 prescribes the financial sector supervisory agencies for the purposes of subsection 126(1) of the Act.

 

Overview

The Insurance Regulations (Amendment) 1997 No. 235, enacted by the Australian Parliament, addresses the need to enhance the regulatory framework governing the disclosure of protected information within the insurance sector. These regulations amend the Insurance Regulations 1997 under the Insurance Act 1973, which establishes the prudential supervision of the general insurance industry. The primary objective of these amendments is to facilitate the exchange of information among financial sector supervisory agencies, law enforcement agencies, and overseas financial sector supervisory agencies, thereby enabling the Insurance and Superannuation Commission to respond swiftly to potential crisis situations within financial conglomerates. The Financial Laws Amendment Act 1997, which commenced on 30 June 1997, introduced changes to Section 126 of the Insurance Act 1973, allowing for the disclosure of protected information to prescribed agencies. The Insurance Regulations (Amendment) 1997 No. 235, issued under the authority of the Assistant Treasurer, operationalise these legislative changes by specifying which agencies are authorised to receive such disclosures.

Scope and Application

The Insurance Regulations (Amendment) 1997 No. 235 amends the Insurance Regulations made under the Insurance Act 1973, focusing on the disclosure of protected information by compliance officers. This amendment applies to compliance officers who have acquired protected information or documents in the course of their duties within the general insurance industry. The regulations are designed to facilitate the swift exchange of information among financial sector supervisory agencies, law enforcement agencies, and overseas financial sector supervisory agencies to prevent and manage crisis situations within financial conglomerates. The amendments are applicable nationally, given the broad scope of the Insurance Act 1973 which operates across Australia. The exceptions and disclosures outlined in the regulations are intended to balance the secrecy provisions of Section 126 of the Act with the need for information sharing among relevant agencies. The regulations extend the application of the Act by detailing specific agencies that can receive protected information, thus clarifying and expanding the circumstances under which such information may be disclosed.

Key Provisions

The Insurance Regulations (Amendment) 1997 No. 235 introduces several key provisions to the existing framework established by the Insurance Act 1973. Section 126 of the Act, which generally prohibits a compliance officer from disclosing protected information or producing protected documents except for specific purposes, has been amended to allow for disclosure to certain agencies. This amendment facilitates the ability of the Insurance and Superannuation Commission to act swiftly to exchange information and prevent or manage crisis situations within financial conglomerates. Regulation 30 specifies the financial sector supervisory agencies, Regulation 31 details the law enforcement agencies, and Regulation 32 identifies the overseas financial sector supervisory agencies that can receive such information. The obligations imposed by these regulations on compliance officers are primarily focused on maintaining the confidentiality of protected information and documents. However, they are permitted to disclose such information to the agencies listed in Regulations 30, 31, and 32, provided the disclosure is for the purposes of those agencies' functions or powers. The regulations ensure that the disclosure is still subject to the purposes specified in Section 126, maintaining a balance between confidentiality and the need for information exchange. Breaches of these regulations, particularly the unauthorized disclosure of protected information or documents, can result in serious consequences. While the specific penalties are not detailed in the explanatory statement, breaches of the Insurance Act 1973 generally attract penalties that can include substantial fines and, in some cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any applicable judicial discretion. These provisions underscore the importance of adhering to the regulations to avoid severe civil or criminal repercussions.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.