EXPLANATORY STATEMENT
STATUTORY RULES 1983 No 240
LIFE INSURANCE REGULATIONS (AMENDMENT)
ISSUED BY AUTHORITY OF THE TREASURER
The Life Insurance Act 1945 (the Act) establishes an administrative system for the supervision of the conduct of life insurance business in Australia by registered life insurance companies.
The main purpose of the regulations is to allow the Life Insurance Commissioner to publish in a more meaningful and up to date manner the statistics which he is required to collect under section 145 of the Act. Sub-section 145(1) requires the Commissioner to collect at such times as are prescribed such statistics in relation to life insurance business as are prescribed. Sub-section 145(2) requires every company to furnish to the Commissioner in accordance with the prescribed form and at such times as are prescribed such particulars as are specified in that form. The regulations also increase the monetary amounts specified in certain sections of the Act to take account of the erosion in value of those amounts due to inflation and effects a number of minor amendments to bring the regulations into line with current legislative drafting practice.
Details of the regulations are set out below:
Regulation 1 amends existing regulation 3 of the Life Insurance Regulations to insert a definition whereby the term “quarter” means the period of 3 months commencing on 1 January, 1 April, 1 July and 1 October in any year.
Regulation 2 repeals regulations 12 to 20 (inclusive) of the existing Regulations which prescribed the nature, method, form and times for collection and furnishing of statistics for the purposes of section 145, and substitutes new regulations 12 to 15 of the Life Insurance Regulations. New regulations 12 and 13 prescribe the times at which statistics are to be collected and the substance of those statistics. New regulations 14 and 15 prescribe the forms in which statistics are to be furnished and the times at which they are to be furnished.
Regulation 3 inserts new regulations 26, 26A, 26B and 26C into the Regulations to provide for increases in the monetary amounts specified for the purposes of sections 103, 103A, 108 and 119 to take account of the effects of inflation on those amounts, and to provide for an increase in the rate of interest specified in section 108 to bring it more closely into line with the higher rates of return currently available on moneys invested. These sections enable these changes to be prescribed in regulations.
Sections 103 and 103A of the Act facilitate the payment or transfer of benefits under policies below specified limits to those entitled to the benefits, without production of probate or letters of administration. New regulations 26 and 26A have the effect of extending the provisions of these sections to the increased limits specified.
Section 108 together with related provisions in the Act impose a limit on the amount which a life office may contract to pay on the death of a child under ten years of age, the limit being designed to protect children from unscrupulous acts by parents/guardians. New regulation 26B enables an increased monetary limit and an increased interest rate to be applied for the purpose of keeping these safeguards in line with present conditions.
Section 119 of the Act lightens the administrative burden on life offices associated with the issue of special policies in substitution of small policies below a specified monetary limit which have been either lost or destroyed. New regulation 26C specifies an increased monetary limit to which the provisions of this section can be applied.
Regulation 4 amends existing regulation 29 by omitting reference to forms 3A, 4 and 5 which are discontinued.
Regulation 5 inserts regulation 29A to provide that a form in Schedule 1 shall be completed in accordance with instructions specified on or relating to the form.
Regulation 6 amends the First Schedule by omitting Forms 3 to 7 (inclusive) and substituting new Forms 3, 6 and 7. These new forms have been designed to provide the Commissioner with statistical information in a more useful form and will also permit him to publish more meaningful and up to date information on life insurance.
Regulation 7 further amends the Regulations as set out in the Schedule. That Schedule outlines a number of minor amendments which are designed to bring the Regulations into line with current legislative drafting practice.
The Treasury
CANBERRA ACT