Notice varying conditions on authorisation to carry on insurance business - ANZcover Insurance Pty Ltd

Administered by Department of the Treasury

Legislation au C2013G00226 In force Gazette

Legislation content

 

 

 

Notice varying conditions on Authorisation to carry on insurance business

 

Insurance Act 1973

 

 

 

TO: ANZcover Insurance Pty Ltd ABN 97 082 275 125 (the general insurer) Level 9, 833 Collins Street, Melbourne 3000 Victoria

 

SINCE

 

A. 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 25 June

2002  (the Authorisation); and

B. the Authorisation is subject to conditions,

 

I, Keith Chapman, a delegate of APRA:

(i) under paragraph 13(1)(b) of the Act, REVOKE those conditions on the Authorisation, specified in the attached Schedule; and

(ii) under paragraph 13(1)(a) of the Act, IMPOSE those conditions on the Authorisation,

specified in the attached Schedule.

 

When this Notice takes effect, the conditions which apply to the Authorisation are set out in the attached Schedule of consolidated conditions.

 

This Notice takes effect on the date of execution of this Notice.

 

 

 

Dated: 8 January 2013

 

[Signed]

 

 

Keith Chapman

Executive General Manager

Diversified Institutions Division

Interpretation Document ID: 207146

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, varies or revokes the 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, or to

vary the conditions on the Authorisation are reviewable decisions to which Part VI of the Act applies. If you are dissatisfied with a reviewable 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 Level 26, 400 George St, Sydney NSW 2000.

Schedule - the conditions which are being revoked

 

1.  The insurer may only underwrite the insurable risks of the Australia and New Zealand Banking Group Limited (“ANZ”) and any of its subsidiaries. A body corporate is a subsidiary of ANZ if ANZ holds more than one-half of the issued share capital of the body corporate (excluding any part of that issued share capital that carried no right to participate beyond a specified amount in distribution of either profits or capital) or the body corporate is a subsidiary of a subsidiary of ANZ.

Schedule - the conditions being imposed

 

  1. Insurance business conducted in Australia by the general insurer can only be conducted

for the sole purpose of discharging liabilities that arose under insurance contracts entered into prior to 1 December 2012.

Schedule of consolidated conditions

 

1.   Insurance business conducted in Australia by the general insurer can only be conducted for the sole purpose of discharging liabilities that arose under insurance contracts entered into prior to 1 December 2012.

 

Overview

The Insurance Act 1973 was enacted by the Australian Parliament to regulate the insurance industry and protect the interests of policyholders. It provides a framework for the authorisation and oversight of insurance businesses operating in Australia. The Act allows the Australian Prudential Regulation Authority (APRA) to impose, vary, or revoke conditions on the authorisation of general insurers, ensuring that these entities adhere to prudential standards and maintain adequate financial resources. The policy objective of the Act is to promote stability and soundness within the insurance sector, safeguarding the interests of policyholders and maintaining public confidence in the industry. This legislation serves as a critical tool for APRA to manage the conduct of authorised general insurers, ensuring compliance with regulatory requirements and promoting the orderly operation of the insurance market.

Scope and Application

The Insurance Act 1973 applies to general insurers, such as ANZcover Insurance Pty Ltd, which is subject to the authorisation and conditions imposed by the Australian Prudential Regulation Authority (APRA). This Act regulates the conduct of insurance business across Australia, ensuring that the insurer adheres to prudential standards. The Act allows APRA to impose, vary, or revoke conditions on an insurer's authorisation to carry on insurance business, and these conditions can override any conflicting prudential standards. For ANZcover Insurance Pty Ltd, the authorisation to carry on insurance business is subject to specific conditions, which have been revoked and replaced as per the attached Schedule. The revocation and imposition of these conditions are effective from the date of execution of the Notice. This regulatory framework ensures that the insurer's operations align with prudential requirements, with penalties for non-compliance, including strict liability offences. The conditions on ANZcover Insurance Pty Ltd's authorisation now strictly limit its business to discharging liabilities from pre-existing insurance contracts, reflecting a targeted scope of operations.

Key Provisions

The Notice, executed on 8 January 2013, revokes specific conditions and imposes new conditions on the Authorisation granted to ANZcover Insurance Pty Ltd by the Australian Prudential Regulation Authority (APRA) under section 12(1) of the Insurance Act 1973. The revoked conditions limited ANZcover Insurance's underwriting to the risks of Australia and New Zealand Banking Group Limited and its subsidiaries, as defined in the Schedule (subsection 13(1)(b)). The new conditions, specified in the attached Schedule, allow ANZcover Insurance to conduct insurance business in Australia solely for the purpose of discharging liabilities from insurance contracts entered into before 1 December 2012 (subsection 13(1)(a)). The Insurance Act 1973 imposes obligations on the general insurer, ANZcover Insurance, to comply with the conditions specified in the Authorisation. These conditions, which are detailed in the attached Schedule, must be adhered to as they are integral to the continued operation of the insurer's business. Failure to comply with these conditions could result in legal repercussions, including the potential revocation of the Authorisation. In the event that ANZcover Insurance breaches the conditions outlined in the Authorisation, it may face significant consequences. Under section 14(1) of the Act, the insurer commits an offence if it fails to comply with the conditions of its authorisation, which results in a contravention. The penalty for such an offence is 300 penalty units. Furthermore, under section 14(1A), individuals associated with the insurer who commit such offences are punishable by a penalty not exceeding 60 penalty units. These offences are considered strict liability offences, meaning intent or negligence is not required for a conviction to occur. ANZcover Insurance has the right to seek reconsideration of any decision made by APRA regarding the imposition, variation, or revocation of conditions under section 13(6) of the Act. Any request for reconsideration must be submitted in writing within 21 days of the decision coming to the insurer's notice, or within any extended period allowed by APRA. If the insurer remains dissatisfied with the reconsidered decision, they may apply to the Administrative Appeals Tribunal for further review in accordance with the Administrative Appeals Act 1975.

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