Revocation of authorisation to carry on insurance business 2022 – Professional Insurance Australia Pty Ltd
Insurance Act 1973
To: Professional Insurance Australia Pty Ltd ABN 90 050 266 307 (‘the general insurer’) Since:
(a) the general insurer was authorised under section 12 of the Insurance Act 1973 (the Act) to carry on insurance business in Australia (‘the authorisation’);
(b) the general insurer has asked APRA to revoke the authorisation; and
(c) APRA is satisfied the general insurer has no liabilities in respect of insurance business carried on by it in Australia and revoking the authorisation would not be contrary to the national interest,
I, Sean Carmody, a delegate of APRA, under subsection 16(1) of the Act, revoke the general insurer’s authorisation.
The revocation takes effect on the date it is made. Dated: 28 June 2022
Sean Carmody Executive Director Insurance Division
Interpretation
In this instrument:
APRA means the Australian Prudential Regulation Authority.
insurance business has the meaning given in subsection 3(1) of the Act.
Overview
The Insurance Act 1973, enacted by the Parliament of Australia, addresses the regulation of insurance businesses within the country. This legislation provides a framework for the authorisation and supervision of insurance companies, ensuring that they operate within a regulated environment that protects policyholders and maintains financial stability. The Revocation of Authorisation to Carry on Insurance Business 2022 specifically targets Professional Insurance Australia Pty Ltd, authorising the Australian Prudential Regulation Authority (APRA) to revoke the company's insurance business authorisation under certain conditions. The policy objective of this revocation, as stated in the instrument, is to ensure that the general insurer has no outstanding liabilities related to its insurance operations and that revoking the authorisation does not harm the national interest. This revocation mechanism allows APRA to effectively manage and mitigate risks associated with insurance businesses in Australia.
Scope and Application
The Insurance Act 1973 applies to entities authorised to carry on insurance business in Australia, including the revocation of such authorisations. Specifically, this Act governs Professional Insurance Australia Pty Ltd, identified by its Australian Business Number 90 050 266 307, which was previously authorised to operate under section 12 of the Act. The Act’s jurisdictional reach is national, covering all of Australia, and its provisions are applicable to any insurance business conducted within the country’s borders. The revocation of authorisation is executed by a delegate of the Australian Prudential Regulation Authority (APRA) if certain conditions are met, including the absence of liabilities and the consideration that revocation would not be contrary to the national interest. The authority to revoke such authorisation is outlined under subsection 16(1) of the Act, with the revocation taking immediate effect upon issuance. The Act does not explicitly state exclusions or exemptions, but its subordinate instruments and guidelines may provide further clarification on specific circumstances or additional criteria for revocation.
Key Provisions
The key provisions of the revocation of authorisation under the Insurance Act 1973 (the Act) pertain to the authority of the Australian Prudential Regulation Authority (APRA) to revoke the authorisation granted to a general insurer. Under section 12 of the Act, Professional Insurance Australia Pty Ltd (the general insurer) was authorised to carry on insurance business in Australia. However, the revocation process is detailed under section 16(1) of the Act, whereby a delegate of APRA, such as Sean Carmody, can revoke this authorisation if certain conditions are met. In this case, the general insurer requested the revocation, and APRA determined that the insurer has no outstanding liabilities related to its insurance business and that the revocation would not be contrary to the national interest.
The Act imposes several obligations and requirements on the parties involved in the insurance business. Primarily, it mandates that the general insurer must not carry on insurance business without the necessary authorisation. Additionally, APRA must ensure that the insurer has no outstanding liabilities before revoking the authorisation and must consider whether such revocation would be in the national interest. The Act also requires that the revocation be communicated formally and effectively, as evidenced by the dated and signed instrument by Sean Carmody, a delegate of APRA.
In terms of consequences for breach, the Act does not explicitly outline specific offences or penalties for the general insurer failing to comply with the revocation. However, operating without the required authorisation can lead to civil and criminal consequences under other sections of the Act, potentially including fines and imprisonment. The maximum penalties would be in line with those specified in the Act for similar regulatory breaches, although the exact figures are not detailed in this revocation instrument.
The revocation instrument specifies that once the authorisation is revoked, it takes immediate effect. This means that from the moment the instrument is made and dated, the general insurer loses its legal authority to conduct insurance business in Australia. The clear and definitive language used in the instrument ensures there is no ambiguity about the timing and effect of the revocation.