Notice imposing conditions on Authorisation to carry on insurance business
Insurance Act 1973
TO: Aioi Nissay Dowa Insurance Company Limited ABN 39 096 302 466 (the general insurer)
Level 8, 390 St. Kilda Road, Melbourne 3004 Victoria
SINCE APRA issued to the general insurer an Authorisation to carry on insurance business in Australia under subsection 12(1) of the Insurance Act 1973 (the Act), on 1 July 2002 (the Authorisation);
I, Brandon Khoo, a delegate of APRA, under paragraph 13(1)(a) of the Act, IMPOSE on the Authorisation the conditions specified in the attached Schedule.
Dated: 4 March 2015
[Signed]
Brandon Khoo
Executive General Manager Specialised Institutions Division
Interpretation Document ID: 216619
In this Notice
APRA means the Australian Prudential Regulation Authority. insurance business has the meaning given in section 3 of the Act. prudential standard has the meaning given in section 3 of the Act.
Note 1
Under subsection 13(1) of the Act, APRA may, at any time, by written notice to the general insurer
impose conditions or additional conditions or vary or revoke conditions imposed on the insurer's authorisation under section 12 of the Act. The conditions must relate to prudential matters.
Note 2
Under subsection 13(2) of the Act, a condition may be expressed to have effect despite anything in
the prudential standards.
Note 3
Under subsection 13(4) of the Act, if APRA imposes conditions on a general insurer's authorisation,
APRA must give written notice to the insurer and ensure that notice that the action has been taken is published in the Gazette.
Note 4
Under subsection 14(1) of the Act, a general insurer commits an offence if:
(a) the insurer does an act or fails to do an act; and
(b) doing the act or failing to do the act results in a contravention of a condition of the insurer's authorisation under section 12 of the Act; and
(c) there is no determination in force under subsection 7(1) of the Act, that subsection 14(1) of the Act does not apply to the insurer.
The penalty is 300 penalty units. Under subsection 14(1A) of the Act, where an individual commits an offence against subsection 14(1) of the Act, because of Part 2.4 of the Criminal Code or commits an offence under Part
2.4 of the Criminal Code in relation to an offence against subsection 14(1) of the Act, the individual is punishable, on conviction, by a penalty not exceeding 60 penalty units. Under subsection 14(2) of the Act, an offence against section 14 of the Act, is an offence of strict liability.
Note 5
Under subsection 13(6) of the Act, a decision to impose conditions, or additional conditions, on the
Authorisation is a reviewable decision to which Part VI of the Act applies. If you are dissatisfied with this decision, you may seek reconsideration of the decision by APRA in accordance with subsection 63(2) of the Act. The request for reconsideration must be in writing, must state the reasons for the request, and must be given to APRA within 21 days after the decision first comes to your notice or within such further period as APRA allows. If dissatisfied with APRA’s reconsidered decision confirming or varying the first decision, you may, subject to the Administrative Appeals 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 400, George Street, Sydney, NSW 2000.
Schedule - the conditions on the Authorisation
The general insurer may only carry on insurance business in Australia for the purpose of discharging liabilities arising under policies issued by it on or before 31 December 2013.
Overview
The Insurance Act 1973 was enacted by the Parliament of Australia to regulate the insurance industry and protect policyholders. This legislation provides a framework for the licensing and supervision of insurance businesses, including the imposition of conditions on authorisations to carry on insurance business. The Australian Prudential Regulation Authority (APRA) is responsible for administering the Act, including the ability to impose, vary, or revoke conditions on authorisations under section 13 of the Act. The policy objective is to ensure that insurance companies are financially sound and capable of meeting their obligations to policyholders, thereby protecting the interests of consumers and maintaining confidence in the insurance market. The Notice imposing conditions on Authorisation to carry on insurance business, issued by APRA delegate Brandon Khoo on 4 March 2015, demonstrates this commitment by placing specific restrictions on Aioi Nissay Dowa Insurance Company Limited’s authorisation to operate in Australia, limiting its business to discharging liabilities arising from policies issued before 31 December 2013.
Scope and Application
The Insurance Act 1973 applies to entities authorised to carry on insurance business in Australia, including Aioi Nissay Dowa Insurance Company Limited, which received an authorisation from the Australian Prudential Regulation Authority (APRA) on 1 July 2002. This Act governs the conduct and operations of general insurers within the Commonwealth of Australia, imposing various conditions to ensure compliance with prudential standards. Conditions on authorisations can be imposed, varied, or revoked by APRA, and these conditions relate to prudential matters, potentially overriding prudential standards as specified. The Act stipulates that APRA must notify the insurer in writing and publish the action in the Gazette when imposing conditions on an authorisation. Additionally, the Act outlines strict liability offences for contraventions of authorisation conditions, with penalties for corporate entities up to 300 penalty units and individuals up to 60 penalty units. Decisions by APRA to impose or vary conditions are subject to review under Part VI of the Act and the Administrative Appeals Tribunal. The attached Schedule to this Notice specifies the particular conditions imposed on Aioi Nissay Dowa Insurance Company Limited’s authorisation, restricting its insurance business activities in Australia to discharging liabilities from policies issued before 31 December 2013.
Key Provisions
Under the Insurance Act 1973, the Australian Prudential Regulation Authority (APRA) has the power to impose conditions on the authorisation of a general insurer to carry on insurance business in Australia. In this case, APRA, through its delegate Brandon Khoo, has imposed conditions on the Authorisation issued to Aioi Nissay Dowa Insurance Company Limited on 1 July 2002. According to subsection 13(1)(a) of the Act, APRA can impose these conditions on the insurer's authorisation under section 12 of the Act, as long as they relate to prudential matters.
The specific condition imposed in this instance is that the general insurer may only carry on insurance business in Australia for the purpose of discharging liabilities arising under policies issued by it on or before 31 December 2013. This means that the insurer is restricted in its business activities and can only engage in insurance activities related to the policies issued before the specified date.
The obligations and requirements imposed by this Act on the parties it governs are primarily concerned with ensuring the prudential soundness of the insurer and protecting policyholders. By imposing these conditions, APRA aims to manage potential risks and ensure that the insurer operates within the bounds set by the Act. The insurer must comply with these conditions as part of its authorisation to carry on insurance business in Australia.
Failing to comply with the conditions imposed by APRA may result in significant consequences. Under subsection 14(1) of the Act, if a general insurer commits an offence by doing an act or failing to do an act that results in a contravention of a condition of its authorisation, it commits an offence. The penalty for such an offence is 300 penalty units. Additionally, if an individual commits an offence under this subsection, they may be punishable by a penalty not exceeding 60 penalty units. These penalties are intended to enforce compliance and deter non-compliance with the conditions imposed by APRA.
If a party is dissatisfied with the decision to impose conditions on their authorisation, they may seek reconsideration by APRA in accordance with subsection 63(2) of the Act. The request for reconsideration must be in writing, state the reasons for the request, and be given to APRA within 21 days after the decision first comes to the party's notice or within any further period APRA allows. If the party remains dissatisfied with APRA's reconsidered decision, they may apply to the Administrative Appeals Tribunal for review of the decision, subject to the Administrative Appeals Act 1975. This process ensures that there is a mechanism for reviewing decisions and addressing any grievances related to the conditions imposed by APRA.