EXPLANATORY STATEMENT
Issued by the Australian Prudential Regulation Authority
Life Insurance Act 1995
Prudential Rules Number 42
Subsection 252(1) of the Life Insurance Act 1995 (the “Act”) provides that the Australian Prudential Regulation Authority (“APRA”) may, in writing, make rules prescribing all matters required or permitted by the Act to be prescribed by Prudential Rules. Subsection 252(2) of the Act provides that such Prudential Rules are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
Section 16R of the Act provides for APRA approval of amendment of approved benefit fund rules as required by APRA. Paragraph 16R(6)(b) of the Act provides that Prudential Rules may require the friendly society to notify some or all of its members of the amendment.
This Prudential Rule is made for the purposes of paragraph 16R(6)(b) of the Act. It sets out requirements for a friendly society to notify the members of the approved benefit fund whose rules have been amended of certain details once APRA has approved the amendment and the amendment has come into force. Those details are the date that the amendment to the approved benefit rules came into force and a summary or a full text of the amendment. If APRA approves, notice may be given to relevant members by virtue of advertisements in newspapers in the State or Territory in which the friendly society operates. This option may be approved where, for example, the change is relatively minor and the expense to the society in individually notifying all relevant members is considered excessive.