Revocation of existing approval to hold a stake in a financial sector company of more than 15%
Approval to hold a stake in a financial sector company of more than 15%
Financial Sector (Shareholdings) Act 1998
To: RenaissanceRe Holdings Ltd. (RenRe) and RenaissanceRe Specialty Holdings (UK) Limited (RRSUKL) (the applicants)
SINCE
- RenRe and RRSUKL have applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act) for approval to hold a 100% stake in Tokio Millennium Re AG (TMR AG) ABN 12 146 546 661, a financial sector company under the Act;
B. RenRe has applied to the Treasurer under section 13 of the Act for approval to hold a 100% stake in RRSUKL, a financial sector company under the Act;
C. Approval was previously granted on 1 March 2011 to Tokio Marine Holdings Inc., Tokio Marine & Nichido Fire Insurance Co. Ltd., Kiln Group Limited, Philadelphia Consolidated Holdings Corp., Tokio Marine Asia Pte. Ltd., Tokio Marine & Nichido Life Insurance Co. Ltd., Tokio Marine & Nichido Financial Life Insurance Co. Ltd., Tokio Millennium Re (UK) Limited and Tokio Marine Technologies LLC (the current holders) under subsection 14(1) of the Act to hold a 100% stake in Tokio Millennium Re Ltd. (now named TMR AG) (the existing approval);
D. The current holders have requested that the existing approval be revoked from the time RRSUKL acquires a 100% stake in TMR AG (the Effective Time);
E. I am satisfied that it is in the national interest to:
- Revoke the existing approval with effect from the Effective Time;
- Approve the applicants to hold a 100% stake in TMR AG; and
- Approve RenRe to hold a 100% stake in RRSUKL;
I, Nigel Boik, a delegate of the Treasurer:
(a) Under subsection 18(3) of the Act, REVOKE the existing approval granted on 1 March 2011 with effect from the Effective Time; and
(b) under section 14(1) of the Act, APPROVE:
(i) the applicants to hold a 100% stake in TMR AG; and
(ii) RenRe to hold a 100% stake in RRSUKL.
This instrument comes into force from the date it is signed and remains in force indefinitely.
Dated 21 February 2019
[Signed]
………………………
Nigel Boik
General Manager
Diversified Institutions Division
Interpretation
In this Notice:
100% subsidiary has the meaning given in section 3 of the Act.
authorised insurance company has the meaning given in section 3 of the Act.
financial sector company has the meaning given in section 3 of the Act.
holding company has the meaning given by section 4 of the Act.
stake in relation to a company, has the meaning given in clause 10 of Schedule 1 to the Act.
unacceptable shareholding situation has the meaning given in section 10 of the Act.
Note 1 Under paragraph 16(2)(a) of the Act, the Treasurer may, by written notice given to a person who holds an Approval under section 14, impose one or more conditions or further conditions to which the Approval is subject. Under paragraph 16(2)(b) of the Act, the Treasurer may revoke or vary any conditions imposed under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s powers under subsection 16(2) may be exercised on the Treasurer’s own initiative or an application made to the Treasurer in accordance with the requirements of subsection 16(4) of the Act, by the person who holds the Approval (see subsection 16(3) of the Act).
Note 2 A person who holds an Approval under section 14 of the Act may apply to the Treasurer under subsection 17(1) of the Act, to vary the percentage specified in the Approval.
Note 3 Under subsection 17(6) of the Act, the Treasurer may, on the Treasurer’s own initiative, by written notice given to a person who holds an Approval under section 14, vary the percentage specified in the Approval if the Treasurer is satisfied it is in the national interest to do so.
Note 4 The circumstances in which the Treasurer may revoke a person’s Approval under section 14 are set out in subsection 18(1) of the Act.
Note 5 Section 19 of the Act provides for flow-on approvals. If an Approval has been granted for the holding of a stake in a financial sector company and the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company, then an approval is taken to exist for the holding of a stake of equal value in each financial sector company that is a 100% subsidiary of the holding company.
Note 6 Under section 14 of the Act, the Treasurer must give written notice of this Approval to the applicants and financial sector company concerned and must publish a copy of this notice in the Gazette.
Note 7 Under section 11 of the Act, a person or 2 or more persons under an arrangement are guilty of an offence if the person(s) acquires shares in a company and the acquisition has the result, in relation to a financial sector company, that:
(i) an unacceptable shareholding situation comes into existence; or
(ii) if an unacceptable shareholding situation already exists in relation to the company and in relation to a person – there is an increase in the stake held by the person in the company;
and the person(s) was reckless as to whether the acquisition would have that result. A maximum penalty of 400 penalty units applies or by virtue of subsection 4B(3) of the Crimes Act 1914, in the case of a body corporate, a penalty not exceeding 2,000 penalty units. By virtue of section 39 of the Act, an offence against section 11 is an indictable offence.
Note 8 Under section 32(3) of the Act, if a person has engaged in or is proposing to engage in any conduct in contravention of a condition to which an approval under section 14 is subject, the Federal Court may, on the application of the Treasurer, grant an injunction:
(i) restraining the person engaging in the conduct; and
(ii) if in the court’s opinion, it is desirable to do so, requiring the person to do something.