Revocation of authorisation to carry on insurance business
Insurance Act 1973
TO: GIO General Limited ABN 22 002 861 583 (the insurer)
SINCE
- the insurer is authorised under subsection 12(2) of the Insurance Act 1973 (the Act), to carry on insurance business in Australia (the Authorisation); and
- the insurer has asked APRA to revoke the Authorisation; and
- I am satisfied that:
(i) the insurer has no liabilities in respect of insurance business carried on by it in Australia; and
(ii) revoking the Authorisation would not be contrary to the national interest,
I, Keith Chapman , a delegate of APRA, under subsection 16(1) of the Act, REVOKE the Authorisation.
This Revocation takes effect on 30 September 2013.
Dated: 30 September 2013
[Signed]
Keith Chapman
Executive General Manager Diversified Institutions Division
Interpretation Document ID: 210513
In this Notice
APRA means the Australian Prudential Regulation Authority.
insurance business has the meaning given in section 3 of the Act.
Note 1
Under subsection 16(2) of the Act, if APRA revokes a general insurer’s authorisation, APRA must
give written notice to the insurer and ensure that notice of the revocation is published in the Gazette. By virtue
of subsection 16(3) of the Act, a revocation is not invalid merely because of a failure to comply with subsection 16(2) of the Act.
Note 2
Under section 16A of the Act, the notice of revocation of the authorisation may state that the
authorisation continues in effect in relation to a specified matter or specified period, as though the revocation had not happened, for the purposes of a specified provision of the Act or the regulations, or a specified provision of another law of the Commonwealth that is administered by APRA, or a specified provision of the prudential standards, and the statement has effect accordingly.
Overview
The Insurance Act 1973, enacted by the Parliament of Australia, was introduced to regulate insurance practices and protect policyholders by ensuring that insurance companies are appropriately authorised and compliant with regulatory standards. The Act provides the framework for the authorisation of insurance companies to carry out insurance business within Australia and mandates oversight by the Australian Prudential Regulation Authority (APRA). The policy objective of the Act is to maintain the stability and integrity of the insurance industry, thereby safeguarding the interests of policyholders and the broader financial system. This particular revocation of authorisation, as documented in the Gazette and executed by a delegate of APRA, addresses the specific situation where GIO General Limited, previously authorised to conduct insurance business, has requested the revocation of its authorisation. The revocation is permissible under the Act provided that the insurer has no outstanding liabilities related to its insurance activities and that such revocation does not conflict with the national interest.
Scope and Application
The Insurance Act 1973 governs the insurance industry in Australia and applies to authorised insurers, including GIO General Limited, who are authorised to carry on insurance business within the country. The Act provides the Australian Prudential Regulation Authority (APRA) with the authority to revoke an insurer's authorisation under specific circumstances, such as when the insurer has no liabilities in respect of insurance business and the revocation does not conflict with the national interest. In this case, Keith Chapman, a delegate of APRA, has exercised this power to revoke GIO General Limited's authorisation, effective from 30 September 2013. The revocation process requires APRA to notify the insurer and publish the revocation in the Gazette, though failure to comply does not invalidate the revocation. Additionally, the notice of revocation may include provisions that allow the authorisation to continue in effect for specific matters, periods, or provisions of the Act, regulations, or prudential standards.
Key Provisions
The primary operative sections of this legislation include subsections 12(2) and 16(1) of the Insurance Act 1973. Subsection 12(2) provides the authorisation for GIO General Limited to carry on insurance business in Australia, while subsection 16(1) grants the authority to revoke this authorisation. The document includes a formal revocation of the authorisation granted to GIO General Limited, effective from 30 September 2013, following a request from the insurer and after ensuring that the insurer has no liabilities in Australia and that revocation would not be against the national interest.
The Act imposes specific obligations on GIO General Limited and APRA. For the insurer, the primary obligation is to ensure that it has no outstanding liabilities related to insurance business in Australia before requesting the revocation of its authorisation. APRA, on the other hand, is mandated to notify the insurer in writing of the revocation and publish the notice in the Gazette, as per subsection 16(2) of the Act. However, the Act clarifies in subsection 16(3) that failure to comply with subsection 16(2) does not render the revocation invalid. Additionally, the notice of revocation may specify that the authorisation remains in effect for certain purposes, as permitted under section 16A of the Act.
Breaches of the conditions outlined in the Act may lead to various civil and criminal consequences. While the document does not specify maximum penalties, it is understood that failure to meet the obligations or conditions set out by the Act could result in legal action against the insurer or regulatory penalties against APRA. The Act’s provisions ensure that the revocation process is carried out in a manner that maintains the integrity of the regulatory framework governing insurance businesses in Australia.