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
Overview
The Life Insurance Regulations (Amendment) Statutory Rules 1983 No 240 were enacted to amend the Life Insurance Regulations, which govern the administrative system for the supervision of life insurance business in Australia as established under the Life Insurance Act 1945. This legislative instrument was introduced to address the need for more meaningful and updated statistics to be collected and published by the Life Insurance Commissioner. The regulations were issued by authority of the Treasurer and represent a response to inflation and the need to align the regulations with contemporary legislative drafting practices. By updating the monetary limits specified in certain sections of the Act and revising the forms and methods for the collection and submission of statistics, the amendments aim to ensure that the regulatory framework remains effective and relevant in the current economic environment.
Scope and Application
The Life Insurance Regulations (Amendment) Statutory Rules 1983 No 240, issued by the authority of the Treasurer, serve to update and refine the administrative framework established by the Life Insurance Act 1945 for the oversight of life insurance business in Australia by registered life insurance companies. The regulations apply to all registered life insurance companies, ensuring they comply with updated requirements for the collection and reporting of statistical data. These regulations are applicable on a national level, impacting the conduct of life insurance companies across the Commonwealth of Australia. They exclude any entities not registered under the Life Insurance Act 1945 and do not apply to entities conducting non-life insurance business. The regulations include adjustments to monetary limits specified in certain sections of the Act to reflect the effects of inflation and other minor amendments to align with contemporary legislative drafting practices. Additionally, the regulations extend their application through subordinate instruments by updating the forms and methods for collecting and reporting statistics, ensuring the information remains relevant and useful for regulatory purposes.
Key Provisions
The primary operative sections of the Life Insurance Regulations (Amendment) involve the collection and dissemination of updated statistical information by the Life Insurance Commissioner. Section 145(1) of the Life Insurance Act 1945 requires the Commissioner to collect specified statistics on life insurance business at prescribed times. Section 145(2) mandates that every company must furnish these particulars to the Commissioner at prescribed intervals and in a prescribed form. The amendment regulations aim to refine these processes by providing more meaningful and timely statistical information. Regulation 2, for example, repeals and replaces existing regulations that specify the collection and furnishing of statistics, introducing new regulations that clarify the nature and timing of these activities (Regulations 12 to 15). These changes facilitate the Commissioner's ability to publish updated and relevant statistical information on life insurance.
The obligations imposed by these regulations include the requirement for life insurance companies to provide updated statistical information to the Commissioner. This obligation is detailed in the new regulations 12 and 13, which prescribe the specific times and content for statistical collection. Regulation 14 and 15 further specify the forms and times for furnishing these statistics, ensuring that companies comply with the updated administrative framework. Additionally, Regulation 5 introduces a requirement for forms in Schedule 1 to be completed in accordance with the specified instructions, ensuring consistency and accuracy in the information provided.
The regulations also introduce several monetary adjustments to reflect inflation and current economic conditions. Regulation 3 includes new regulations 26, 26A, 26B, and 26C to update the monetary limits and interest rates specified in sections 103, 103A, 108, and 119 of the Act. These amendments ensure that the safeguards and administrative provisions remain effective under current economic conditions. Failure to comply with these obligations can result in legal consequences, although specific penalties are not outlined in the explanatory statement. The regulations, however, maintain the integrity of the life insurance statistical reporting system by ensuring it aligns with modern requirements and practices.