Varying conditions on an authorisation to carry on insurance business in Australia - Commonwealth Steamship Insurance Company Proprietary Limited

Administered by Department of the Treasury

Legislation au C2021G00022 In force Gazette

Legislation content

 

Varying conditions on an authorisation to carry on insurance business in Australia

 

Insurance Act 1973

 

To: Commonwealth Steamship Insurance Company Proprietary Limited ABN 86 004 127 431 (the body corporate)

 

SINCE:

  1. APRA issued to the body corporate an Authorisation to carry on insurance business in Australia under subsection 12(1) of the Insurance Act 1973 (the Act) on 26 June 2002 (the Authorisation); and

 

B.       the Authorisation is subject to conditions,

 

I, Brandon Kong Leong Khoo, a delegate of APRA, under paragraph 13(1)(b) of the Act, VARY the conditions imposed on the Authorisation in the manner specified in the attached Schedule.

 

 

Dated: 23 December 2020

 

[Signed]

 

Brandon Kong Leong Khoo 1

Executive Director Insurance Division

 

 

Interpretation

 

Act means the Insurance Act 1973.

APRA means the Australian Prudential Regulation Authority.

insurance business has the meaning given in subsection 3(1) of the Act.

 


1 A delegate of APRA.

Note 1 Under subsection 13(1) of the Act, APRA may, at any time, by written notice to a general insurer, impose conditions or additional conditions or vary or revoke conditions imposed on the insurer’s authorisation.

Note 2 Under subsection 13(2) of the Act, APRA may impose conditions or additional conditions on a general insurer’s authorisation provided the conditions relate to prudential matters.

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 Applicant and ensure that notice of the action is published in the Gazette.

Note 4 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 24, 535 Bourke Street Melbourne VIC 3000 and by email to the relevant APRA Supervisor.

Schedule – the condition(s) on Authorisation which are to be varied

 

The existing condition(s) which are to be varied:

 

2)      The body corporate shall:

 

a)      maintain minimum capital as calculated under Prudential Standard GPS 110 Capital Adequacy (GPS110) of two times MCR, where MCR is calculated as the greater of:

 

(i)      the amount determined in accordance with paragraph 15 of GPS 110; or

(ii) $2,000,000; or

 

b)      have in place a bank guarantee, the structure of which is to be approved by APRA, that would provide the same level of capital cover,

 

and in this regard the body corporate shall not be obliged to comply with paragraph 16 of GPS 110.

 

The condition(s) as varied

 

2)        The body corporate shall:

 

a)       maintain a PCR as calculated under Prudential Standard GPS 110 Capital Adequacy (GPS110) where PCR is calculated as the greater of:

 

(i)      the amount determined in accordance with paragraph 22 of GPS 110; or

(ii) $2,000,000;

 

and in this regard the body corporate shall not be required to comply with paragraph 23(a) of GPS 110.

 

 

 

 

Interpretation

 

In this schedule:

 

body corporate means the general insurer

PCR means Prudential Capital Requirement as defined in paragraph 20 of GPS 110.

Schedule of consolidated conditions

The conditions that apply to the body corporate’s authorisation:

 

1)      The body corporate may only conduct insurance business in Australia for the sole purpose of discharging liabilities that arose under policies entered into prior to 20 February 1992.

 

2)      The body corporate shall:

 

a)       maintain a PCR as calculated under Prudential Standard GPS 110 Capital Adequacy (GPS110) where PCR is calculated as the greater of:

 

(i)      the amount determined in accordance with paragraph 22 of GPS 110; or

(ii) $2,000,000;

 

and in this regard the body corporate shall not be required to comply with paragraph 23(a) of GPS 110.

 

 

Interpretation

 

In this schedule:

 

body corporate means the general insurer

PCR means Prudential Capital Requirement as defined in paragraph 20 of GPS 110.

Overview

The Insurance Act 1973, enacted by the Parliament of Australia, serves to regulate the insurance industry, ensuring that insurance companies maintain sufficient capital and comply with prudential standards to protect policyholders. This legislation aims to address issues related to financial stability and consumer protection within the insurance sector. The Act empowers the Australian Prudential Regulation Authority (APRA) to impose, vary, or revoke conditions on authorisations granted to insurance companies, thereby enabling the enforcement of prudential requirements and the maintenance of market confidence. This particular gazette, C2021G00022, outlines a variation in the conditions imposed on the Commonwealth Steamship Insurance Company Proprietary Limited’s authorisation to carry on insurance business in Australia, reflecting APRA’s role in adjusting regulatory requirements to align with evolving market conditions and insurer circumstances. The policy objective remains focused on ensuring the financial robustness of insurers and safeguarding policyholder interests.

Scope and Application

The Insurance Act 1973 applies to entities carrying on insurance business in Australia, including the Commonwealth Steamship Insurance Company Proprietary Limited, which is subject to conditions on its authorisation issued by the Australian Prudential Regulation Authority (APRA). This legislation operates within the Commonwealth jurisdiction, and its conditions can be varied by APRA to address prudential matters, as outlined in the Act. The authority to vary these conditions is explicitly provided under subsection 13(1)(b) of the Act, with any changes being subject to review under Part VI of the Act and potentially the Administrative Appeals Tribunal if necessary. The varied conditions now require the entity to maintain a Prudential Capital Requirement (PCR) as calculated under Prudential Standard GPS 110 Capital Adequacy, with exemptions from certain compliance requirements. These changes are communicated through the Gazette and any other means APRA deems appropriate, ensuring transparency and adherence to regulatory standards.

Key Provisions

The main operative sections of the legislation concern the varying of conditions on the Authorisation to carry on insurance business in Australia, specifically under the Insurance Act 1973 (the Act) (sections 12 and 13). The legislation grants APRA the authority to impose, vary, or revoke conditions on an insurer’s authorisation, provided the conditions relate to prudential matters (section 13(1) and (2)). This particular legislation details a variation to the conditions of the authorisation issued to the Commonwealth Steamship Insurance Company Proprietary Limited (the body corporate) on 26 June 2002. The variation pertains to the capital adequacy requirements, modifying the minimum capital requirement from two times the Minimum Capital Requirement (MCR) to a Prudential Capital Requirement (PCR), as defined under Prudential Standard GPS 110 Capital Adequacy (GPS110). The obligations imposed by the Act on the body corporate include maintaining a PCR as stipulated under GPS 110. Specifically, the body corporate must maintain a PCR calculated as the greater of the amount determined in accordance with paragraph 22 of GPS 110 or $2,000,000. The body corporate is also exempted from complying with paragraph 23(a) of GPS 110. Additionally, the authorisation is restricted to conducting insurance business in Australia solely for discharging liabilities that arose under policies entered into prior to 20 February 1992. The Act imposes civil and administrative penalties for breaches of its provisions. While the specific penalties for non-compliance are not detailed in the text, under the Administrative Appeals Act 1975, non-compliance could result in actions such as fines or other administrative penalties as prescribed by the Act. Furthermore, the decision to impose, vary, or revoke conditions on the authorisation is subject to review under Part VI of the Act. If a party is dissatisfied with a reviewable decision, they may seek reconsideration by APRA within 21 days of becoming aware of the decision or within any further period allowed by APRA. If still dissatisfied, they may apply to the Administrative Appeals Tribunal for further review. These provisions ensure that any changes to the authorisation are subject to appropriate oversight and potential legal recourse in case of disputes.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.