Notice imposing additional condition on NOHC registration 2021 – Challenger Limited

Administered by Department of the Treasury

Legislation au C2021G00610 In force Gazette

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Notice imposing additional condition on NOHC registration 2021 – Challenger Limited

Life Insurance Act 1995

 

To: Challenger Limited ABN 85 106 842 371 (the NOHC) Since:

  1. the NOHC is registered as a NOHC (the NOHC registration) under the Life Insurance Act 1995 (the Act); and

 

B.            the NOHC registration is subject to the conditions specified in the schedule (existing conditions),

 

I, Brandon Kong Leong Khoo, a delegate of APRA, under paragraph 28B(1)(a) of the Act, impose an additional condition on the NOHC registration, as specified in the schedule.

 

The conditions which apply to the NOHC registration when this instrument commences (the consolidated conditions) are specified in the schedule.

 

This instrument commences on 31 July 2021. Dated: 29 July 2021

 

 

 

Brandon Kong Leong Khoo Executive Director Insurance Division

 

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority.

NOHC has the meaning given in the Dictionary in the Schedule of the Act.

NOHC registration has the meaning given in the Dictionary in the Schedule of the Act.

 

Notes

APRA is required to publish this instrument in the Gazette.

A decision to impose conditions or additional conditions, or vary the conditions, on a NOHC registration is a reviewable decision under the Act. You may request APRA reconsider the decision in accordance with section 236 of the Act. The request for reconsideration must be made in writing, must state the reasons for the request, and must be given to APRA within 21 days after the day on which you first received notice of this decision, or within such further period as APRA allows. If you are dissatisfied with the outcome of APRA’s reconsideration of the decision, you may, subject to the Administrative Appeals Tribunal Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision. The address where written notice may be given to APRA is Level 12, 1 Martin Place, Sydney NSW 2000.

 

 

Schedule – existing conditions

The existing conditions are:

 

Level 3 Head Conditions

 

  1. The NOHC must confine itself to the following activities:

(a)   hold investments in subsidiaries;

(b)   raise funds to invest in, or to provide support to, subsidiaries;

(c)   hold properties used by other Level 3 institutions in the Level 3 group;

(d)   raise funds to conduct its own limited activities;

(e)   invest funds (all capital held within the NOHC other than investments in other Level 3 institutions in the Level 3 group) on behalf of the Level 3 group;

(f)     provide executive leadership across the group; and

(g)   any activities that must be undertaken by a Level 3 Head to meet its obligations under APRA’s Prudential Standards.

 

2.        The NOHC must seek APRA’s agreement prior to undertaking activities that relate to undertaking a ‘corporate centre’ role, such as group treasury activities, risk management, reinsurance management, settlements, information technology, human resources, financial reporting and other group services such as company secretarial services.

 

3.        The NOHC must not undertake any activities other than those outlined in conditions 1 and 2 unless agreed to by APRA.

 

Interpretation

In this schedule:

Level 3 group has the meaning given in Prudential Standard 3PS 001 Definitions. Level 3 Head has the meaning given in Prudential Standard 3PS 001 Definitions. Level 3 institution has the meaning given in Prudential Standard 3PS 001 Definitions.

 

Schedule – additional condition imposed

The following additional condition is imposed:

 

4.        The NOHC must ensure that:

(a)          the funds and other assets of the Challenger banking subsidiaries are not used to directly or indirectly fund, or provide security for, the purchase of financial products issued or underwritten by a member of the Challenger group that is not also a Challenger banking subsidiary; and

(b)          the funds and other assets of the Challenger group and its subsidiaries are not used to directly or indirectly fund, or provide security for, the purchase of financial products issued or underwritten by the Challenger banking subsidiaries other than as common equity injections into the Challenger banking subsidiaries (either directly or indirectly via a wholly owned holding structure),

except with the written agreement of APRA.

 

Interpretation

In this schedule:

Challenger banking subsidiaries means MyLifeMyFinance Limited ABN 54 087 651 750 and its subsidiaries from time to time.

Challenger group means the NOHC and its subsidiaries (within the meaning of section 50 of the Corporations Act 2001).

 

 

Schedule – consolidated conditions

The existing conditions are:

 

Level 3 Head Conditions

 

  1. The NOHC must confine itself to the following activities:

(a)   hold investments in subsidiaries;

(b)   raise funds to invest in, or to provide support to, subsidiaries;

(c)   hold properties used by other Level 3 institutions in the Level 3 group;

(d)   raise funds to conduct its own limited activities;

(e)   invest funds (all capital held within the NOHC other than investments in other Level 3 institutions in the Level 3 group) on behalf of the Level 3 group;

(f)     provide executive leadership across the group; and

(g)   any activities that must be undertaken by a Level 3 Head to meet its obligations under APRA’s Prudential Standards.

 

2.        The NOHC must seek APRA’s agreement prior to undertaking activities that relate to undertaking a ‘corporate centre’ role, such as group treasury activities, risk management, reinsurance management, settlements, information technology, human resources, financial reporting and other group services such as company secretarial services.

 

3.        The NOHC must not undertake any activities other than those outlined in conditions 1 and 2 unless agreed to by APRA.

 

4.        The NOHC must ensure that:

(a)          the funds and other assets of the Challenger banking subsidiaries are not used to directly or indirectly fund, or provide security for, the purchase of financial products

issued or underwritten by a member of the Challenger group that is not also a Challenger banking subsidiary; and

(b)          the funds and other assets of the Challenger group and its subsidiaries are not used to directly or indirectly fund, or provide security for, the purchase of financial products issued or underwritten by the Challenger banking subsidiaries other than as common equity injections into the Challenger banking subsidiaries (either directly or indirectly via a wholly owned holding structure),

except with the written agreement of APRA.

 

Interpretation

In this schedule:

Challenger banking subsidiaries means MyLifeMyFinance Limited ABN 54 087 651 750 and its subsidiaries from time to time.

Challenger group means the NOHC and its subsidiaries (within the meaning of section 50 of the Corporations Act 2001).

Level 3 group has the meaning given in Prudential Standard 3PS 001 Definitions. Level 3 Head has the meaning given in Prudential Standard 3PS 001 Definitions. Level 3 institution has the meaning given in Prudential Standard 3PS 001 Definitions.

Overview

The Notice imposing additional condition on NOHC registration 2021, published under the Life Insurance Act 1995, addresses the need to impose an additional regulatory condition on the registration of Challenger Limited as a Non-Operating Holding Company (NOHC). This Act was enacted by the Australian Parliament to regulate the activities of non-operating holding companies in the life insurance sector, ensuring they do not engage in activities that could jeopardise the financial stability of their operating subsidiaries. The policy objective is to safeguard the interests of policyholders and maintain the financial health of the institutions within the NOHC group. This specific notice, issued by a delegate of the Australian Prudential Regulation Authority (APRA), introduces a condition that restricts the use of funds and assets of Challenger banking subsidiaries for certain financial activities without APRA's written agreement, aiming to prevent potential conflicts of interest and financial risks within the group.

Scope and Application

The "Notice imposing additional condition on NOHC registration 2021 – Challenger Limited" applies specifically to Challenger Limited, a non-operating holding company (NOHC) registered under the Life Insurance Act 1995. This legislation, which comes into effect on 31 July 2021, imposes an additional condition on the NOHC registration of Challenger Limited, as delegated by Brandon Kong Leong Khoo, an Executive Director of the Australian Prudential Regulation Authority (APRA). The Act applies to the activities that Challenger Limited is permitted to undertake, ensuring that it confines itself to specific activities such as holding investments in subsidiaries, raising funds, and providing executive leadership across the group. It also mandates that Challenger Limited must seek APRA’s agreement prior to undertaking certain corporate centre activities and prohibits it from undertaking any activities outside of these conditions unless expressly agreed to by APRA. The additional condition specifically restricts the use of funds and assets of Challenger banking subsidiaries and other entities within the Challenger group, ensuring they are not used for the purchase of financial products issued or underwritten by other entities within the Challenger group without APRA’s written agreement. This legislative instrument extends the existing conditions on the NOHC registration, reinforcing regulatory oversight on the financial activities of Challenger Limited.

Key Provisions

The Notice imposing additional condition on NOHC registration 2021 – Challenger Limited, published under the Life Insurance Act 1995, specifies the main operative sections that outline the requirements and permissions for Challenger Limited (NOHC) in its registration as a Non-Operating Holding Company (NOHC). This notice, dated 29 July 2021, imposes an additional condition on the NOHC registration, effective from 31 July 2021. The additional condition restricts the use of funds and assets of the Challenger banking subsidiaries, specifically MyLifeMyFinance Limited and its subsidiaries, from being used to purchase financial products issued or underwritten by non-banking subsidiaries within the Challenger group, unless it has been approved in writing by the Australian Prudential Regulation Authority (APRA). The consolidated conditions, as specified in the schedule, now include this new requirement alongside the existing conditions that limit the NOHC's activities to those specified in the Prudential Standards and require APRA's consent for certain corporate centre roles. Challenger Limited is obligated to adhere to these consolidated conditions, ensuring that it confines its activities to those permitted under the Life Insurance Act 1995 and the Prudential Standards. These obligations include holding investments in subsidiaries, raising funds for investments or support to subsidiaries, managing properties used by other Level 3 institutions within the group, and providing executive leadership. The NOHC must also seek APRA's agreement before engaging in any activities that constitute a 'corporate centre' role, such as risk management or financial reporting. Any deviation from these activities without APRA’s approval is strictly prohibited, reinforcing the regulatory framework designed to maintain financial stability and protect stakeholders. Failure to comply with the conditions set forth in this notice may result in legal consequences. While the specific penalties are not detailed in the notice, breaches of the Life Insurance Act 1995 can typically lead to both civil and criminal penalties, including fines and imprisonment, depending on the severity of the breach. The notice also provides avenues for review and reconsideration of the decision by APRA, followed by the possibility of an appeal to the Administrative Appeals Tribunal if dissatisfied with the outcome. These provisions underscore the importance of strict adherence to regulatory requirements and the potential ramifications for non-compliance.

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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.