Commonwealth Coat of Arms of Australia

Insurance Laws Amendment Act 1994

No. 48 of 1994

An Act to amend the Insurance Act 1973 and the Insurance
(Agents and Brokers) Act 1984, and for related purposes

[Assented to 7 April 1994]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title

1. This Act may be cited as the Insurance Laws Amendment Act 1994.

Commencement

2.(1) Sections 1, 2, 3, 10 and 40 commence on the day on which this Act receives the Royal Assent.

(2) Section 41 is taken to have commenced on 6 January 1992.

(3) The remaining provisions of this Act commence on such day as is, or such days as are, fixed by Proclamation.

(4) If a provision of this Act referred to in subsection (3) does not commence within 6 months after the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period.

PART 2—AMENDMENTS OF THE INSURANCE ACT 1973

Principal Act

3. In this Part, “Principal Act” means the Insurance Act 19731.

Assets

3A. Section 30 of the Principal Act is amended by omitting subparagraphs (7)(a)(i) and (ii) and substituting the following subparagraphs:

“(i) the number of those units or the aggregate of the number of those units and the number of units issued by the trust to a body corporate related to the first-mentioned body corporate exceeds 25% of the total number of units issued by the trust; or

(ii) the value of those units or the aggregate of the value of those units and the value of units issued by the trust to bodies corporate related to the first-mentioned body corporate exceeds 25% of the total value of units issued by the trust; or”.

Valuation of assets

4. Section 33 of the Principal Act is amended:

(a) by omitting paragraph (a) of component B of the formula appearing in subsection (6A) and substituting the following paragraph:

“(a) if the share-issuing body is incorporated in Australia:

(i) $2,000,000; or

(ii) 20% of its premium income during its last preceding financial year; or

(iii) 15% of its outstanding claims provision as at the end of its last preceding financial year;

whichever is the greatest; or”;

(b) by omitting paragraph (b) of component B of the formula appearing in subsection (6A) and substituting the following paragraph:

“(b) if the share-issuing body is not incorporated in Australia:

(i) $2,000,000; or

(ii) 20% of its premium income in Australia during its last preceding financial year; or

(iii) 15% of its outstanding claims provision as at the end of its last preceding financial year;

whichever is the greatest; and”.

Inquiry by Commissioner and directions relating to certain assets

5. Section 51 of the Principal Act is amended by omitting paragraph (1)(b) and substituting the following paragraph:

“(b) by notice in writing served on the body corporate direct:

(i) that it not dispose of, or otherwise deal with or remove from Australia, any asset of the body corporate; or

(ii) that it not dispose of, or otherwise deal with or remove from Australia, any asset of the body corporate that is, or that is of a kind that is, specified in the notice; or

(iii) that it deal with any asset of the body corporate, or any asset of the body corporate that is, or that is of a kind that is, specified in the notice, on such terms and conditions as are specified in the notice;

during such period after service of the notice, not exceeding 6 months, as is specified in the notice.”.

Principal banker

6. Section 119 of the Principal Act is amended by omitting subsection (3).

Application of amendments—section 33 of the Principal Act

7. The amendments made by section 4 apply to a valuation of the assets of a body corporate at any time during:

(a) the third of the first 3 financial years of the body corporate commencing after 6 January 1992; or

(b) any subsequent financial year of the body corporate.

Application of amendment—section 51 of the Principal Act

8. The amendment made by section 5 does not affect any direction in force under section 51 of the Principal Act immediately before this section commences.

Transitional—phasing-in of asset valuation requirements

9.(1) In this section:

“amended Act” means the Principal Act as amended by this Act;

“insurance company” means a body corporate authorised under the Insurance Act 1973 to carry on insurance business;

“interim year”, in relation to an insurance company, means the third of the first 3 financial years of the insurance company commencing after 6 January 1992.

(2) Section 33 of the amended Act applies to an insurance company in relation to the interim year of that insurance company as if:

(a) a reference in that section to $2,000,000 were a reference to $1,500,000; and

(b) a reference in that section to 15% were a reference to 12.5%.

PART 3—AMENDMENTS OF THE INSURANCE (AGENTS AND BROKERS) ACT 1984

Principal Act

10. In this Part, “Principal Act” means the Insurance (Agents and Brokers) Act 19842.

Definitions

11. Section 9 of the Principal Act is amended:

(a) by omitting “provisional” (twice occurring) from the definition of “binder” and substituting “interim”;

(b) by inserting the following definitions:

“ ‘agency agreement’, in relation to an insurer, means a written agreement of the kind referred to in section 10 that authorises a person to arrange contracts of insurance as agent for the insurer;

‘agent’, in relation to an insurer, means a person in relation to whom an agency agreement is in force with the insurer;

‘approved form’ means a form approved under section 9C;

‘authorised officer’, when used in a particular provision of this Act, means a person authorised by the Commissioner to exercise powers or perform functions under that provision;

‘class of insurance business’ means:

(a) life insurance; or

(b) a class of insurance business prescribed for the purposes of subsection 42(2) of the Insurance Act 1973.”.

Insertion of new sections

12. After section 9A of the Principal Act the following sections are inserted in Part 1:

Meaning of acceptable contracts of professional indemnity insurance

“9B.(1) An acceptable contract of professional indemnity insurance, in relation to liabilities that are prescribed for the purposes of a nominated provision, means a contract of insurance:

(a) that is accepted by the Commissioner; and

(b) that contains a clause indicating that the parties to the contract intend that any claim under the contract will be determined according to the law of a State or Territory specified in the contract; and

(c) under which the insured is indemnified to the extent required by the regulations in respect of the prescribed liabilities arising out of or in the course of the insured’s business as an insurance intermediary.

“(2) Regulations specifying the extent to which a person is to be indemnified under an acceptable contract of professional indemnity insurance may make provision for different amounts according to the date on which the contract is entered into or renewed.

“(3) Despite section 28 of the Insurance Contracts Act 1984:

(a) a failure to comply with a duty of disclosure by a person seeking to enter into an acceptable contract of professional indemnity insurance; or

(b) a misrepresentation by such a person to an insurer before such a contract was entered into;

whether that failure or misrepresentation was fraudulent or not, is not a ground for the insurer to avoid the contract or to reduce its liability under the contract.

“(4) An acceptable contract of professional indemnity insurance in respect of liabilities that are prescribed for the purposes of a nominated provision must provide that, despite the fact:

(a) that the person entering into the contract subsequently ceases to trade as an insurance intermediary; or

(b) that the contract is cancelled under subsection (5);

that person, or any other person who becomes responsible for the liabilities of that person, is to continue to be indemnified in relation to a claim:

(d) that gives rise to such a prescribed liability;

if that claim is made within the period after entry into that last-mentioned contract of insurance that is, at the time of entry into that contract, prescribed by regulations made for the purposes of this subsection.

“(5) The insurer under an acceptable contract of professional indemnity insurance must not cancel the contract unless, at least 3 business days before the date of intended cancellation of the contract, the Commissioner is notified in writing by the insurer or by the agent of the insurer:

(a) of the insurer’s intention to cancel the contract; and

(b) of the date of the intended cancellation of the contract; and

Penalty: 150 penalty units.

“(6) For the purposes of subsection (5), the following days do not count as business days:

(a) a Saturday or a Sunday;

(b) a day that is a public holiday or a bank holiday;

(i) in the Australian Capital Territory; and

(ii) if the insured is a natural person—in the place of residence of the insured; and

(iii) if the insured is a company—in the State or Territory in which the insured is incorporated; and

(iv) if the insured is a partnership or a body corporate other than a company—in the principal place of business of the insured.

“(7) A provision in a contract of professional indemnity insurance has no effect if it purports to permit the contract to be cancelled by a person (the ‘premium funder’) who has entered into a loan agreement with the insured for the provision of all or a part of the premium payable under the contract if the insured is unable or unwilling to comply with the terms of the loan agreement.

“(8) In this section:

‘nominated provision’ means:

(a) paragraph 19(1)(b); or

(b) subparagraph 31B(1)(a)(ii) or (b)(ii).

Approved form

“9C.(1) In this Act, a reference to an approved form is a reference to a form that is approved, by written instrument, by the Commissioner.

“(2) The instrument by which a form is approved under subsection (1) after this section commences is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.”.

Insurance intermediaries other than brokers to operate under written agreements

13. Section 10 of the Principal Act is amended by inserting after subsection (2) the following subsection:

“(2A) An agreement referred to in this section must specify whether an insurance intermediary can appoint a person as his or her agent for the purposes of the agreement.”.

Liability for conduct of agents and employees

14. Section 11 of the Principal Act is amended:

(a) by omitting subsection (1) and substituting the following subsections:

“(1) This section applies to any conduct of an employee or agent of an insurer:

(a) on which a person in the circumstances of the insured or intending insured could reasonably be expected to rely; and

(b) on which the insured or intending insured in fact relied in good faith.

“(1A) An insurer is responsible, as between the insurer and the insured or intending insured, for the conduct of an employee of the insurer in relation to any matter relating to insurance, whether or not the employee acted within the scope of his or her employment.

“(1B) If a person is the agent of one insurer only, the insurer is responsible, as between the insurer and the insured or intending insured, for the conduct of the agent in relation to any matter relating to insurance, whether or not the agent acted within the scope of the authority granted by the insurer.

“(1C) If:

(a) a person who is the agent of more than one insurer is the agent of one insurer only in respect of a particular class of insurance business; and

(b) the person engages in the conduct in relation to any matter relating to that class of insurance business;

the insurer who granted the agency agreement in respect of that class of insurance business is responsible for the conduct, as between the insurer and the insured or intending insured, whether or not the agent has acted within the scope of the authority granted by the insurer.

“(1D) If:

(a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and

(b) the person engages in the conduct in relation to any matter relating to that class of insurance;

the insurers are jointly and severally responsible for the conduct, as between themselves and the insured or intending insured, if the agent has acted beyond the scope of the authority granted by any of the insurers.

“(1E) If:

(a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and

(b) the person engages in the conduct in relation to a matter relating to that class; and

that insurer is responsible for the conduct, as between the insurer referred to in paragraph (c) and the insured or intending insured.

“(1F) If:

(a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and

(b) the person engages in the conduct in relation to a matter relating to that class; and

the insurers referred to in paragraph (c) are jointly and severally responsible for the conduct, as between themselves and the insured or intending insured.

“(1G) If:

(a) a person is the agent of more than one insurer; and

(b) the person engages in the conduct in relation to any matter relating to a class of insurance business in which the person is not the agent of any of those insurers;

the insurers are jointly and severally liable for the conduct, as between themselves and the insured or intending insured, despite the fact that the agent acted outside the scope of the authority granted by any of the insurers.

“(1H) If:

(a) a person (the ‘principal agent’) is the agent of an insurer; and

(b) the principal agent appoints a second person (the ‘sub-agent’) to act as agent of the principal agent;

then, for the purpose of determining the ultimate responsibility of the insurer under this section, the actions of the sub-agent are to be taken to be the actions of the principal agent:

(c) whether the agency agreement entered into between the principal agent and the insurer permitted or forbade the principal agent to appoint the sub-agent; and

(d) whether or not the sub-agent acted within the scope of his or her authority.

“(1J) If:

(a) a person is the agent of at least one insurer in respect of life insurance business; and

(b) the person is the agent of at least one other insurer in respect of another class of insurance business (‘general insurance business’);

the provisions of this section do not operate:

(c) if the person engages in the conduct in relation to life insurance business—so as to make any insurer referred to in paragraph (b) responsible for the conduct; and

(d) if the person engages in conduct in relation to general insurance business—so as to make any insurer referred to in paragraph (a) responsible for the conduct.”;

(b) by omitting from subsection (2) “subsection (1)” and substituting “subsection (1A), (1B), (1C), (1D), (1E), (1F), (1G) or (1H)”;

(c) by omitting from subsection (3) “Neither subsection (1) nor (2) affects” and substituting “Subsections (1A), (1B), (1C), (1D), (1E), (1F), (1G), (1H) and (1J) and (2) do not affect”;

(d) by omitting from subsection (4) “subsection (1)” and substituting “subsection (1A), (1B), (1C), (1D), (1E), (1F), (1G), (1H), (1J)”.

Brokers not to carry on business unless registered

15. Section 19 of the Principal Act is amended:

(a) by omitting paragraph 19(1)(b) and substituting the following paragraph:

“(b) if there are liabilities prescribed for the purposes of this paragraph—unless there is in force an acceptable contract of professional indemnity insurance within the meaning of section 9B.”;

(b) by omitting from subsection (3) “acceptable” and substituting “an acceptable contract of professional indemnity insurance”.

Applications for registration

16. Section 20 of the Principal Act is amended:

(a) by omitting subsection (1) and substituting the following subsection:

“(1) A person may apply to the Commissioner:

(a) to be registered under this Part in respect of life insurance business or in respect of general insurance business; or

(b) to renew the person’s registration under this Part.”;

(b) by omitting from subsection (2) “prescribed form” and substituting “approved form”;

(c) by omitting from subsection (2A) “regulations made for the purposes of subsection (2)” and substituting “an approved form made for the purposes of subsection (2)”.

Registration of brokers

17. Section 21 of the Principal Act is amended:

(a) by omitting subsections (1) and (2) and substituting the following subsections:

“(1) Subject to subsection (2), if a person who proposes to carry on business as an insurance broker applies under section 20 for registration under this Part, the Commissioner must register the applicant and give the applicant a certificate of registration if:

(a) the Commissioner is satisfied that there is in force any contract of insurance, required under paragraph 19(1)(b); and

(b) the applicant has produced to the Commissioner a copy of each foreign agency agreement (if any) that authorises the applicant to arrange contracts as agent for an insurer; and

“(1A) Subject to subsection (2), if:

(a) a person is registered under this Part; and

(b) the person applies under section 20 to renew the registration;

the Commissioner must renew the registration and give the applicant a certificate of renewal of registration if:

(c) the Commissioner is satisfied that there is in force in respect of the applicant any contract of insurance required under paragraph 19(1)(b) ; and

(d) the applicant has produced to the Commissioner a copy of each foreign agency agreement (if any) that authorises the applicant to arrange contracts as agent for an insurer; and

(e) the applicant has produced, or produces, satisfactory audited accounts of the applicant’s business as an insurance broker, in respect of the accounting period ending on, or not more than 12 months before, the day that the registration would end if it is not renewed; and

(f) the applicant has paid the prescribed fee.

Note: A person can carry on business as an insurance broker only if the person is registered under this Part (see sections 19, 21 and 24).

“(2) If:

(a) an applicant, or a director, employee or agent of an applicant has been convicted of an offence referred to in subsection 25(1); or

(b) an applicant, or a director, employee or agent of an applicant, is bankrupt or insolvent; or

(c) an applicant, or an associated insurance intermediary within the meaning of section 41B, has failed to discharge the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A;

the Commissioner may refuse to register the applicant or renew the applicant’s registration.”;

(b) by omitting from subsection (3) “under this section” and substituting “and the renewal of a person’s registration each”;

“(3A) Within 4 months after the end of each accounting period, a registered insurance broker must produce satisfactory audited accounts for that period to the Commissioner.

Penalty: 30 penalty units.

“(3B) If, before the end of the 4 month period referred to in subsection (3A), the Commissioner grants a registered insurance broker an extension of time to produce the accounts, the broker must produce the accounts within the extended period.

Penalty: 30 penalty units.”;

(d) by omitting subsection (5) and substituting the following subsections:

“(5) If the Commissioner:

(a) registers an applicant; or

(b) renews the registration of an applicant; or

(d) cancels the registration of an insurance broker under subsection (4);

the Commissioner must publish notice of it in the Gazette.

“(6) If:

(a) a broker provides audited accounts to the Commissioner under this section; and

(b) those accounts do not meet the requirement specified in paragraph (a), (b), (c), (d) or (e) of the definition of ‘satisfactory audited accounts’ in subsection (7); and

(c) the broker, at the request of the Commissioner, gives the Commissioner a written explanation why the requirement has not been met;

the Commissioner may renew the broker’s registration if the Commissioner is satisfied, having regard to the explanation, that the failure of the accounts to meet that request is not attributable to the dishonesty, recklessness or financial mismanagement of the broker.

“(7) In this section:

‘satisfactory audited accounts’, in relation to a broker, include, but are not limited to, the following:

(a) accounts that are in an approved form;

(b) accounts that are arithmetically correct;

(i) the amount of an account maintained by the broker under subsection 26(1); and

(ii) the amount of prescribed investments by the broker; and

(iii) amounts due to the broker from insurance debtors;

is equal to, or exceeds, all the broker’s insurance liabilities;

(d) accounts that indicate that the broker is able to meet the broker’s financial obligations as they fall due;

(e) accounts that contain such other information as is required by the approved form;

(f) accounts that are audited by an approved auditor.”.

Suspension or cancellation of registration

18. Section 25 of the Principal Act is amended by inserting after subsection (1) the following subsections:

“(1A) If:

(a) a person registered under this Part, or a director, employee or agent of such a person, becomes bankrupt or insolvent; or

(b) a person registered under this Part fails to discharge the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A;

the Commissioner may:

(d) cancel the registration of the person.

“(1B) If:

(a) the Commissioner renews the registration of a broker after having regard to the audited accounts provided for a particular accounting period; and

(b) during the period of the continued registration audited accounts for the next accounting period are provided to the Commissioner; and

(c) the Commissioner is satisfied that those accounts are such that a further application for the renewal of registration would be refused;

the Commissioner may, despite the fact that the period of renewed registration has not ended:

(d) suspend registration of the broker for such period as the Commissioner considers appropriate; or

(e) cancel the registration of the broker.”.

Annual return

19. Section 25A of the Principal Act is amended:

(a) by omitting paragraph (2)(a) and substituting the following paragraph:

“(a) must be in an approved form;”;

(b) by omitting from paragraphs (2)(b) and (c) “shall” and substituting “must”;

(d) by omitting paragraph (2)(d) and substituting the following paragraphs:

“(d) unless paragraph (e) applies—must be lodged within 4 months after the end of the accounting period to which it relates; and

(e) if, before the end of the lodgment period referred to in paragraph (d), the Commissioner grants an extension of the lodgment period—must be lodged within the extended period.”.

Insertion of new section

20. After section 25B of the Principal Act the following section is inserted:

Accounting records to be kept by registered brokers

“25C.(1) A registered insurance broker must keep records that record and explain:

(a) the transactions engaged in by the broker to carry on business as an insurance broker; and

(b) the financial position of the broker.

“(2) The records must be kept so that the broker’s accounts can be properly prepared and audited.

“(3) A broker must not, without reasonable excuse, contravene a requirement under this section.

Penalty: 100 penalty units.”.

Insurance broking accounts

21. Section 26 of the Principal Act is amended:

(a) by omitting from paragraph (1)(a) “arranged or effected or to be arranged or effected by the broker” and substituting “or proposed contract of insurance”;

(b) by adding after subsection (1A) the following subsection:

“(1B) If money referred to in subsection (1) is paid to a person who is the agent of a registered insurance broker, the money is taken to have been paid to the broker at the time when it is received by the agent, whether or not the agent acted within the scope of authority granted by the broker.”;

(d) by omitting from subsection (4) “arranged or effected or to be arranged or effected by the broker”.

Debts of brokers in relation to premiums etc.

22. Section 27 of the Principal Act is amended by omitting subsection (9) and substituting the following subsections:

“(9) If:

(a) a registered insurance broker receives money from, or on behalf of, an insured or intending insured in connection with a contract of insurance or proposed contract of insurance; and

(b) at the end of 30 days after the day on which the money was received, the risk, or a part of the risk, to which the contract or proposed contract relates has not been accepted;

subsection (9A) or (9B) applies to the broker.

“(9A) If the risk to which the contract or proposed contract relates has not been accepted, the broker must, within 7 days after the end of the 30 day period:

(a) give notice in the approved form (if any) to the insured or intending insured that the risk has not been accepted; and

(b) return the money to the insured or intending insured.

“(9B) If a part of the risk to which the contract or proposed contract relates has not been accepted, the broker must, within 7 days after the end of the 30 day period:

(a) give notice in the approved form (if any) to the insured or intending insured of the extent to which the risk has not been accepted; and

(b) return that part of the money that relates to the part of the risk that has not been accepted to the insured or intending insured.”.

Foreign insurance agents not to carry on business unless registered

23. Section 31B of the Principal Act is amended:

(a) by omitting subparagraph (1)(a)(ii) and substituting the following subparagraph:

“(ii) if there are liabilities prescribed for the purposes of this subparagraph—there is in force an acceptable contract of professional indemnity insurance within the meaning of section 9B; or”;

(b) by omitting subparagraph (1)(b)(ii) and substituting the following subparagraph:

“(ii) if there are liabilities prescribed for the purposes of this subparagraph—there is in force an acceptable contract of professional indemnity insurance within the meaning of section 9B.”;

(c) by omitting from subsection (2) “acceptable” and substituting “an acceptable contract of professional indemnity insurance”.

Registration of foreign insurance agents

24. Section 31D of the Principal Act is amended:

(a) by omitting subsection (2) and substituting the following subsection:

“(2) If:

(a) an applicant, or a director, employee or agent of an applicant has been convicted of an offence referred to in subsection 31H(1); or

(b) an applicant, or a director, employee or agent of an applicant, is bankrupt or insolvent; or

the Commissioner may refuse to register the applicant.”;

(b) by inserting after paragraph (5)(a) the following paragraph:

“(aa) refuses to renew the registration of an applicant under this section; or”;

Suspension or cancellation of registration

25. Section 31H of the Principal Act is amended by inserting after subsection (1) the following subsection:

“(1A) If:

(a) a person registered under this Part, or a director, employee or agent of such a person, becomes bankrupt or insolvent; or

(b) a person registered under this Part fails to discharge the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A;

the Commissioner may:

(d) cancel the registration of the person.”.

Annual return

26. Section 31J of the Principal Act is amended:

(a) by omitting paragraph (2)(a) and substituting the following paragraph:

“(a) must be in an approved form;”;

(b) by omitting from paragraphs (2)(b) and (c) “shall” and substituting “must”;

(d) by omitting paragraph (2)(d) and substituting the following paragraphs:

“(d) unless paragraph (e) applies—must be lodged within 4 months after the end of the accounting period to which it relates; and

(e) if, before the end of the lodgment period referred to in paragraph (d), the Commissioner grants an extension of the lodgment period—must be lodged within the extended period.”.

Insertion of new section

27. After section 33 of the Principal Act the following section is inserted:

Insurance intermediaries to notify insurers of multiple agency arrangements

“33A.(1) This section applies to an insurance intermediary other than an insurance broker.

“(2) If, when this section commences, an insurance intermediary is the agent of more than one insurer, the intermediary must, within 60 days after this section commences, give written notice to each insurer of the name of each other insurer.

“(3) If an insurance intermediary:

(a) is the agent of an insurer (an ‘existing principal’); and

(b) proposes to enter into an agency agreement with another insurer (the ‘intended principal’);

the intermediary must not enter that agreement unless:

(d) the intended principal is given written notice of the name of each existing principal.

“(4) If an insurance intermediary:

(a) is the agent of more than one insurer (the ‘existing principals’); and

(b) proposes to renew or cancel one of the agency agreements concerned;

the intermediary must not renew or cancel that agreement until each existing principal (other than the principal with whom the agreement is to be cancelled or renewed) is given written notice of that intention.

“(5) If an insurance intermediary:

(a) is the agent of more than one insurer (the ‘existing principals’); and

(b) one of the agency agreements concerned expires or is terminated by force of the agreement or at the initiative of one of the existing principals;

the intermediary must, within 7 days of the expiration or termination of that agreement, give written notice to each other existing principal of that expiration or termination.

Penalty: 50 penalty units.”.

Insertion of new sections

28. After section 34 of the Principal Act the following sections are inserted:

Commissioner may direct an insurance intermediary to provide information

“34A.(1) If, in the Commissioner’s opinion, an insurance intermediary:

(a) has not met the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A; or

(b) is not meeting those obligations; or

the Commissioner may direct an insurance intermediary, or a director, employee or agent of the insurance intermediary, to do all or any of the following:

(d) to provide the Commissioner with such information as the Commissioner requires;

(e) to attend and give evidence before the Commissioner or an authorised officer;

(f) to produce to the Commissioner any documents in the custody or under the control of the person;

for the purpose of enabling the Commissioner to investigate all or any of the matters mentioned in paragraphs (a), (b) and (c).

“(2) The Commissioner may direct that:

(a) the information or answers to questions be given either orally or in writing; and

(b) the information or answers to questions be verified or given on oath or affirmation.

“(3) The Commissioner or an authorised officer may administer the oath or affirmation.

“(4) The oath to be taken or affirmation to be made by a person for the purposes of this section is an oath or affirmation that the information or answers the person will give will be true.

“(5) The regulations may prescribe scales of expenses to be allowed to persons who are required to attend under this section.

“(6) If:

(a) information is provided to the Commissioner under paragraph (1)(d) in a document; or

(b) evidence is given to the Commissioner under paragraph (1)(e) in a document; or

the Commissioner may inspect, audit, examine, make copies of, or take extracts from any such document.

“(7) A person must not, without reasonable excuse, fail to comply with a requirement under subsection (1).

Penalty: 30 penalty units.

“(8) It is a reasonable excuse for a person to refuse or fail to provide information, to answer a question or to produce a document on the ground that to do so would tend to incriminate the person.

“(9) A person must not, intentionally or recklessly:

(a) make a statement to the Commissioner or an authorised officer, either orally or in writing, that is false or misleading in a material particular; or

(b) present a document to the Commissioner or an authorised officer that is false or misleading in a material particular.

Penalty: imprisonment for 1 year.

“(10) If documents are produced to the Commissioner:

(a) the Commissioner may retain possession of the documents for such period as is necessary and reasonable for the purposes of the investigation; and

(b) during that period the Commissioner must permit a person who would be entitled to inspect a document if it were not in the Commissioner’s possession to inspect that document at any reasonable time.

Production of documents

“34B.(1) The Commissioner may, by written notice, require an insurance intermediary or a director, employee or agent of the insurance intermediary to produce any information or documents kept by the insurance intermediary for the purpose of carrying on business as an insurance intermediary.

“(2) If:

(a) information is provided to the Commissioner under subsection (1) in a document; or

(b) documents are produced to the Commissioner under that subsection;

the Commissioner may inspect, audit, examine, make copies of, or take extracts from any such document.

“(3) A person must not, without reasonable excuse, fail to comply with a requirement under subsection (1).

Penalty: 30 penalty units.

“(4) It is a reasonable excuse for a person to refuse or fail to produce a document on the ground that to do so would tend to incriminate the person.

Identity cards

“34C.(1) The Commissioner may issue to each authorised officer an identity card.

“(2) An identity card must:

(a) be in an approved form; and

(b) incorporate a recent photograph of the person.

“(3) As soon as practicable after a person ceases to be an authorised officer, he or she must return his or her identity card to the Commissioner.

“(4) A person must not, without reasonable excuse, fail to return his or her identity card.

Penalty: one penalty unit.

Offence powers—entry and search of premises with occupier’s consent

“34D.(1) If:

(a) an authorised officer has reasonable grounds for suspecting that there is on or in any premises a particular thing, including information, that may afford evidence of the commission of an offence against this Act; and

(b) the occupier of the premises consents to the officer entering the premises;

the officer may, after producing his or her identity card for inspection by the occupier:

(d) search the premises for the thing; and

(e) seize the thing; and

(f) if the thing is or includes information in a written or electronic form—do the things set out in subsections (2), (3) and (4) in respect of the thing.

“(2) If the thing referred to in subsection (1) is or includes information in a written or electronic form, an authorised officer may operate equipment at the premises to see whether:

(a) the equipment; or

(b) a disk, tape or other storage device that:

(i) is at the premises; and

(ii) can be used with or is associated with the equipment;

contains the information.

“(3) If an authorised officer, after operating equipment at the premises, finds that the equipment, or that a disk, tape or other storage device at the premises, contains the information, he or she may:

(a) seize the equipment or the disk, tape or other storage device; or

(b) if the information can, by using facilities at the premises, be put in documentary form—operate the facilities to put the information in that form and seize the documents so produced; or

(i) is brought to the premises; or

(ii) is at the premises and the use of which for the purpose has been agreed to in writing by the occupier of the premises;

operate the equipment or other facilities to copy the information to the storage device and remove the storage device from the premises.

“(4) An authorised officer may seize equipment under paragraph (3)(a) only if:

(a) it is not practicable to put the information in documentary form as mentioned in paragraph (3)(b) or to copy the information as mentioned in paragraph (3)(c); or

(b) possession of the equipment by the occupier of the premises could constitute an offence.

“(5) If, in the course of searching for a particular thing:

(a) an authorised officer finds a thing that he or she believes, on reasonable grounds to be another thing that will afford evidence as to the commission of an offence against this Act; and

(b) he or she believes on reasonable grounds, that it is necessary to seize that thing:

(i) in order to prevent its concealment, loss or destruction, or its use in committing, continuing or repeating an offence against this Act; and

(ii) without the authority of a warrant under section 34E because the circumstances are so serious and urgent;

he or she may seize that thing.

“(6) The authorised officer must leave the premises if the occupier asks the authorised officer to do so.

Offence-related warrants

“34E.(1) An authorised officer may apply to a magistrate for a warrant under this section in relation to particular premises.

“(2) Subject to subsection (3), a magistrate may issue the warrant if satisfied, by information on oath or affirmation, that there are reasonable grounds for suspecting that there is on the premises a particular thing, including information, that may afford evidence of the commission of an offence against this Act.

“(3) A magistrate must not issue the warrant unless the authorised officer or someone else has given the magistrate, either orally (on oath or affirmation) or by affidavit, any further information the magistrate may require about the grounds on which the issue of the warrant is being sought.

“(4) The warrant must:

(a) authorise any authorised officer named in the warrant, with such assistance and by such force as is necessary and reasonable:

(i) to enter the premises; and

(ii) to search the premises for the thing; and

(iii) to seize the thing; and

(iv) if the thing is or includes information in a written or electronic form—to do the things set out in subsections (5), (6) and (7) in respect of the thing; and

(b) state whether the entry is authorised to be made at any time of the day or night or during specified hours of the day or night; and

(c) specify the day (not more than 7 days after the issue of the warrant) on which the warrant ceases to have effect; and

(d) state the offence in respect of which the warrant is issued.

“(5) If the thing referred to in subsection (2) is or includes information in a written or electronic form, an authorised officer acting under the warrant may operate equipment at premises referred to in the warrant to see whether:

(a) the equipment; or

(b) a disk, tape or other storage device that:

(i) is at the premises; and

(ii) can be used with or is associated with the equipment;

contains the information.

“(6) If an authorised officer acting under the warrant, after operating equipment at the premises, finds that the equipment contains the information or that a disk, tape or other storage device at the premises contains the information, he or she may:

(a) seize the equipment or the disk, tape or other storage device; or

(b) if the information can, by using facilities at the premises, be put in documentary form—operate the facilities to put the information in that form and seize the documents so produced; or

(i) is brought to the premises; or

(ii) is at the premises and the use of which for the purpose has been agreed to in writing by the occupier of the premises;

operate the equipment or other facilities to copy the information to the storage device and remove the storage device from the premises.

“(7) An authorised officer acting under the warrant may seize equipment under paragraph (6)(a) only if:

(a) it is not practicable to put the relevant information in documentary form as mentioned in paragraph (6)(b) or to copy the information as mentioned in paragraph (6)(c); or

(b) possession of the equipment by the occupier of the premises could constitute an offence.

“(8) If, in the course of searching for a particular thing in relation to a particular offence, an authorised officer acting under the warrant finds another thing that the officer believes, on reasonable grounds, to be:

(a) a thing that will afford evidence as to the commission of an offence (although not the thing specified in the warrant); or

(b) a thing that will afford evidence as to the commission of another offence against this Act;

and the officer believes, on reasonable grounds, that it is necessary to seize that thing in order to prevent its concealment, loss or destruction, or its use in committing, continuing or repeating the offence or the other offence, the warrant is to be taken to authorise the officer to seize that thing.

Announcement before entry under warrant

“34F.(1) The authorised officer named in a warrant issued under section 34E must, before any person enters premises under the warrant:

(a) announce that he or she is authorised by the warrant to enter the premises; and

(b) give any person at the premises an opportunity to allow entry to the premises.

“(2) The authorised officer is not required to comply with subsection (1) if he or she believes on reasonable grounds that immediate entry to the premises is required to ensure that the effective execution of the warrant is not frustrated.

Details of warrant to be given to occupier etc.

“34G.(1) If a warrant issued under section 34E is being executed and the occupier of the premises is present at the premises, the authorised officer named in the warrant must make available to that person a copy of the warrant.

“(2) The authorised officer must identify himself or herself to the person at the premises.

“(3) The copy of the warrant need not include the signature of the magistrate who issued the warrant.

Continuance of warrants in certain circumstances

“34H.(1) If a warrant issued under section 34E is being executed, the authorised officer named in the warrant and any officers assisting that officer may, if the warrant is still in force, complete the execution of the warrant after temporarily ceasing its execution and leaving the premises:

(a) for not more than one hour; or

(b) for a longer period if the occupier of the premises consents in writing.

“(2) If:

(a) the execution of a warrant is stopped by an order of a court; and

(b) the order is later revoked or reversed on appeal; and

the execution of the warrant may be completed.

Use of expert assistance in executing warrants

“34J.(1) If the authorised officer named in a warrant issued under section 34E believes on reasonable grounds that:

(a) evidential material may be accessible by operating electronic equipment at the premises to which the warrant relates; and

(b) expert assistance is required to operate the equipment; and

(c) if he or she does not take action under this subsection, the material may be destroyed, altered or otherwise interfered with;

he or she may do whatever is necessary to secure the equipment, whether by locking it up, placing a guard or otherwise.

“(2) The authorised officer must give notice to the occupier of the premises of his or her intention to secure equipment and of the fact that the equipment may be secured for up to 24 hours.

“(3) The equipment may be secured:

(a) for a period not exceeding 24 hours; or

(b) until the equipment has been operated by the expert;

whichever happens first.

“(4) If the authorised officer believes on reasonable grounds that the expert assistance will not be available within 24 hours, he or she may apply to a magistrate for an extension of that period.

“(5) The authorised officer must give notice to the occupier of the premises of his or her intention to apply for an extension, and the occupier is entitled to be heard in relation to the application.

“(6) The provisions of section 34E relating to the issue of a warrant apply, with such modifications as are necessary, to the issuing of an extension.

Warrants may be granted by telephone etc.

“34K.(1) If, because of circumstances of urgency, an authorised officer thinks it necessary to do so, the officer may apply for a warrant under section 34E by telephone, telex, facsimile or other electronic means under this section.

“(2) Before making such an application, an authorised officer must prepare information of the kind mentioned in subsection 34E(2) that sets out the grounds on which the issue of the warrant is being sought, but may, if it is necessary to do so, make the application before the information has been sworn.

“(3) If a magistrate to whom an application under this section is made is satisfied:

(a) after having considered the terms of the information prepared under subsection (2); and

(b) after having received any further information that the magistrate may require about the grounds on which the issue of the warrant is being sought;

that there are reasonable grounds for issuing the warrant, the magistrate must complete and sign a warrant that is the same as the warrant that the magistrate would issue under section 34E if the application had been made under that section.

“(4) If a magistrate signs a warrant under subsection (3):

(a) the magistrate must inform the authorised officer of the terms of the warrant, the day and time when it was signed, and the day on which it ceases to have effect, and record on the warrant the reasons for issuing it; and

(b) the officer must complete a form of warrant in the terms given to the officer by the magistrate and write on it the magistrate’s name and the day and time when the warrant was signed.

“(5) If an authorised officer completes a form of warrant, the officer must, not later than the day after:

(a) the day on which the warrant ceases to have effect; or

(b) the day on which the warrant is executed;

whichever happens first, send the magistrate who signed the warrant the form of warrant completed by the officer and the information duly sworn in connection with the warrant.

“(6) Upon receipt of the documents mentioned in subsection (5), the magistrate must attach to them the warrant signed by the magistrate and deal with the documents in the same way that the magistrate would have dealt with the information if the application for the warrant had been made under section 34E.

“(7) The form of warrant completed by an authorised officer under subsection (4) is, if it is in accordance with the terms of the warrant signed by the magistrate, authority for any entry, search, seizure or other exercise of a power that the warrant so signed had authorised.

“(8) If:

(a) in any proceedings, the court must be satisfied that an entry, search, seizure, or other exercise of power, was authorised under this section; and

(b) the warrant signed by a magistrate under this section authorising the entry, search, seizure, or other exercise of power, is not produced in evidence;

the court must assume (unless the contrary is proved) that the entry, search, seizure, or other exercise of power, was not authorised by such a warrant.

Discovery of evidence

“34L.(1) If:

(a) an authorised officer who enters premises under section 34D or under a warrant under section 34E finds the thing (the ‘evidence’) which the officer entered the premises to find; and

(b) the officer seizes the evidence;

the officer:

(d) if proceedings are instituted within 60 days after the seizure and the evidence may be used in the proceedings—may keep the evidence so seized until the proceedings (including any appeal to a court in relation to the proceedings) are terminated; and

(e) must allow it to be inspected at any reasonable time by anyone who would be entitled to inspect it if it were not in the officer’s possession.

“(2) If, in the course of searching premises entered under section 34D or under a warrant under section 34E, the authorised officer:

(a) finds a thing that he or she believes, on reasonable grounds, to be:

(i) a thing (other than the evidence mentioned in subsection (1)) that will afford evidence of the commission of the offence in relation to which the search was undertaken; or

(ii) a thing that will afford evidence of the commission of another offence against this Act; and

(b) the officer believes, on reasonable grounds, that it is necessary to seize the thing to prevent its concealment, loss or destruction;

subsection (1) applies to the thing as if it were the evidence mentioned in that subsection.

“(3) An authorised officer may apply to a magistrate to extend the periods of time referred to in paragraphs (1)(c) and (d).

“(4) The magistrate may extend the periods of time for so long as the magistrate considers necessary.

Compensation for damage to electronic equipment

“34M.(1) If:

(a) damage is caused to equipment as a result of it being operated as mentioned in section 34D or 34E; and

(b) the damage was caused as a result of:

(i) insufficient care being exercised in selecting the person who was to operate the equipment; or

(ii) insufficient care being exercised by the person operating the equipment;

compensation for the damage is payable to the owner of the equipment.

“(2) Compensation is payable out of money appropriated by the Parliament for the purpose.

“(3) In determining the amount of compensation payable, regard is to be had to whether the occupier of the premises and his or her employees and agents, if they were available at the time, had provided any warning or guidance as to the operation of the equipment that was appropriate in the circumstances.

Copies of seized things to be provided

“34N.(1) Subject to subsection (2), if an authorised officer seizes under section 34D or 34E:

(a) a document, film, computer file or other thing that can be readily copied; or

(b) a storage device the information in which can be readily copied;

the officer must, if requested to do so by the occupier of the premises, give a copy of the thing or the information to the person as soon as practicable after the seizure.

“(2) Subsection (1) does not apply if:

(a) the thing that has been seized was seized under paragraph 34D(3)(b) or (c) or 34E(6)(b) or (c); or

(b) possession by the occupier of the document, film, computer file, thing or information could constitute an offence.

Power to require persons to provide information etc.

“34P.(1) If an authorised officer is on or in premises because the occupier of the premises consented to the officer’s entry—the officer may direct the occupier to:

(a) answer any questions put by the officer; and

(b) produce any records or documents requested by the officer.

“(2) An authorised officer who is on or in any premises that he or she has entered under a warrant may require any person on or in the premises to:

(a) answer any questions put by the officer; and

(b) produce any records or documents requested by the officer.

“(3) A person must not, without reasonable excuse, fail to comply with a requirement under subsection (2).

Penalty: 30 penalty units.

“(4) It is a reasonable excuse for a person to refuse or fail to provide information, to answer a question or to produce a document on the ground that to do so would tend to incriminate the person.

“(5) A person must not, intentionally or recklessly:

(a) make a statement to an authorised officer, either orally or in writing, that is false or misleading in a material particular; or

(b) present a document to an authorised officer that is false or misleading in a material particular.

Penalty: Imprisonment for 1 year.

Consent

“34Q.(1) Before obtaining the consent of a person for the purposes of section 34D, the authorised officer must inform that person that he or she may refuse to give consent.

“(2) An entry by an authorised officer by virtue of the consent of a person is not lawful unless the person voluntarily consented to the entry.

Persons to assist authorised officers

“34R.(1) An authorised officer may request the occupier of any premises entered:

(a) by the officer under section 34D; or

(b) under a warrant under section 34E;

to provide reasonable assistance to the officer, at any time while the officer is entitled to remain on the premises, for the purpose of the exercise of the officer’s powers under those sections in relation to the premises.

“(2) A person mentioned in subsection (1) must not, without reasonable excuse, fail to comply with an authorised officer’s request.

Penalty: 30 penalty units.

“(3) It is a reasonable excuse for a person whose premises are being searched under a warrant issued under section 34E to refuse to assist an authorised officer on the ground that to do so would tend to incriminate the person.

Offence for making false statements in applications for warrants

“34S. A person must not make, in an application for a warrant, a statement that the person knows to be false or misleading in a material particular.

Penalty: Imprisonment for 2 years.

Offences relating to telephone warrants

“34T. A person must not:

(a) state in a document that purports to be a form of warrant under section 34E the name of a magistrate unless that magistrate issued the warrant; or

(b) state on a form of warrant under that section a matter that, to the person’s knowledge, departs in a material particular from the form authorised by the magistrate who issued the warrant; or

(c) purport to execute, or present to a person, a document that purports to be a form of warrant under that section that the person knows:

(i) has not been approved by a magistrate under that section; or

(ii) departs in a material particular from the terms authorised by a magistrate under that section; or

(d) give a magistrate a form of warrant under that section that is not the form of warrant that the person purported to execute.

Penalty: Imprisonment for 2 years.

Secrecy

“34U.(1) The object of this section is to create duties of non-disclosure for the purposes of section 70 of the Crimes Act 1914.

“(2) Subject to subsections (3), (4) and (6), a person who is or has been:

(a) the Commissioner; or

(b) a member of the staff assisting the Commissioner;

must not, either directly or indirectly, communicate to any person any information concerning the affairs of any other person if the information has been acquired by him or her:

(d) in the performance or the purported performance of the duties under or for the purposes of this Act.

“(3) Subsection (2) does not apply to a person who communicates the information in the performance of a duty in connection with this Act.

“(4) Subsection (2) does not prevent the communication of information or the production of a document by the Commissioner, or by a member of the staff assisting the Commissioner authorised by the Commissioner:

(a) to the Minister; or

(b) to a court for the purposes of this Act; or

(c) to a person to whom, in the Minister’s opinion, it is in the public interest that the information be communicated or the document produced.

“(5) A person who is or has been:

(a) the Commissioner; or

(b) a member of the staff assisting the Commissioner;

is not required:

(d) to produce in a court any document;

acquired by him or her, in the exercise or the purported exercise of powers, or the performance or the purported performance of duties, for the purposes of this Act, except when it is necessary to do so for the purposes of this Act.

“(6) Subsection (2) does not prevent the communication of information or the production of a document by the Commissioner, or by a member of the staff assisting the Commissioner authorised by the Commissioner:

(a) to the Secretary to a Department of the Commonwealth; or

(b) to an officer of a Department of the Commonwealth, approved, in writing, by the Secretary to that Department;

for the purpose of advising the Minister administering that Department in connection with a submission:

(d) relating to the administration of this Act.

“(7) If information is communicated under subsection (6) to the Secretary to a Department of the Commonwealth or to an officer of a Department of the Commonwealth, the Secretary or the officer must not, either directly or indirectly, except for the purpose mentioned in subsection (6), divulge or communicate that information to any person.

“(8) For the purposes of this section, if a person appointed under an Act (the ‘first Act’) has all the powers of, or exercisable by, a Secretary of a Department of the Australian Public Service under the Public Service Act 1922, so far as those powers relate to a particular branch of the Australian Public Service:

(a) the person is taken to be a Secretary to a Department of the Commonwealth; and

(b) an officer in that branch is taken to be an officer of that Department; and

Certain money to be trust money

29. Section 37 of the Principal Act is amended:

(a) by inserting after subsection (1) the following subsection:

“(1A) If money referred to in subsection (1) is paid to a person (the ‘sub-agent’) who is the agent of an insurance agent, the money is taken to have been paid to the insurance agent at the time when it is received by the sub-agent, whether or not the sub-agent acted within the scope of authority granted by the agent.”;

(b) by omitting subsection (3) and substituting the following subsections:

“(2A) Subject to subsections (2C) and (2D), if money referred to in subsection (1) is paid to the person as a premium under a contract of insurance or a proposed contract of insurance, the person must pay the money to the insurer not more than 37 days after the day on which the money is received.

“(2B) Subject to subsections (2C) and (2D), if money referred to in subsection (1) is paid as an instalment of a premium under a contract of insurance or a proposed contract of insurance, the person must pay the money to the insurer not more than 37 days after the day on which the money is received.

“(2C) If, at the time when money referred to in subsection (1) is received on behalf of an insurer in respect of insurance business, the person is, under section 37A, exempt from the requirements of

subsections (2A) and (2B) so far as that insurer and that insurance business are concerned, that money need not be paid to the insurer within the time limits specified in those subsections but must be paid to the insurer as soon as is reasonably practicable.

“(2D) If the person ceases to be exempt from the requirement of subsections (2A) and (2B) so far as a particular class of insurer and particular insurance business are concerned:

(a) any money received by the person on behalf of that insurer in respect of that insurance business before the day on which the person ceased to be so exempt must be paid to the insurer within 30 days after that day; and

(b) any money applied in settlement of a claim against the insurer before the day on which the person ceased to be so exempt is to be treated, for the purposes of paragraph (a), to have been paid to the insurer when it was so applied.

“(3) If:

(a) money referred to in subsection (2A) or (2B) is paid to the person; and

(b) the money is paid by cheque (other than a cheque payable to the insurer);

the money is taken to have been paid to the person when the cheque was received by the person.”;

(d) by omitting from subsection (3B) “subsection (3)” and substituting “subsection (2A), (2B), (2C) or (2D)”;

(e) by omitting from subsection (4) “or (3)” and substituting “, (2A), (2B), (2C) or (2D)”.

Insertion of new section

30. After section 37 of the Principal Act the following section is inserted:

Commissioner may grant exemptions from certain requirements under section 37

“37A.(1) An insurance intermediary who is the agent of an insurer in respect of a class of insurance business may apply to the Commissioner to be granted an exemption from the requirements of subsections 37(2A) and (2B) in respect of money received in relation to contracts of insurance with that insurer in respect of a class of insurance business to which the agency agreement relates.

“(2) An insurance intermediary is not entitled to be granted such an exemption in relation to an insurer and a class of insurance business unless the Commissioner is satisfied:

(a) that the intermediary will be acting under a binder given by the insurer in respect of the insurance business; and

(b) that the nature of the business of the intermediary is such that it is not commercially practicable for the intermediary to comply with the requirements of subsections 37(2A) and (2B); and

“(3) An application by an insurance intermediary for an exemption in relation to an insurer and a class of insurance business must:

(a) be made in writing; and

(b) be in an approved form; and

(i) particulars of the binder given by the insurer; and

(ii) a statement of the reasons why the intermediary contends that the relationship between the intermediary and the insurer is such that it is not commercially practicable to comply with the requirements of subsections 37(2A) and (2B); and

(iii) such other particulars as the approved form requires; and

(d) be accompanied by:

(i) a copy of the agency agreement with the insurer; and

(ii) a statement by the insurer to the effect that the insurer has no objection to the grant of the exemption.

“(4) If the Commissioner decides, having regard to the application and to the accompanying documents, to grant the insurance intermediary the exemption sought:

(a) the Commissioner must inform the insurance intermediary:

(i) of the granting of the exemption and of the date on which it is granted; and

(ii) of any terms and conditions to which the exemption is subject; and

(b) the Commissioner must, as soon as practicable, notify the granting of the exemption, in relation to the insurer and insurance business in the Gazette.

“(5) If the Commissioner decides, having regard to the application and to the accompanying documents, not to grant the exemption, the Commissioner must inform the insurance intermediary of the Commissioner’s decision and of the reasons for that decision.

“(6) An exemption granted to an insurance intermediary in respect of an insurer and a class of insurance business applies to all money received by the intermediary on behalf of that insurer in respect of that business on or after the day it is granted and while it remains in force.

“(7) The Commissioner may, by notice in writing, revoke an exemption granted to an insurance intermediary in respect of a particular insurer and particular insurance business:

(a) if:

(i) the intermediary, or a director, employee or agent of the intermediary, has, whether before or after the grant of the exemption and whether before or after the commencement of this section, been convicted of an offence against this Act or against any other law, whether of the Commonwealth, of a State or Territory, or of another country, in respect of conduct relating to insurance;

(ii) the Commissioner is of the opinion that the offence renders the intermediary unfit to be exempt from the requirements of subsections 37(2A) and (2B); or

(b) if the intermediary, or a director, employee or agent of the intermediary, becomes bankrupt or insolvent; or

(c) if the intermediary ceases to be an agent of the insurer, or ceases to be an agent of the insurer in respect of that class of business; or

(d) if the insurer indicates to the Commissioner that it no longer consents to the intermediary being so exempted; or

(e) if, for any other reason, the Commissioner considers it no longer appropriate for the intermediary to continue to be so exempted.

“(8) If the Commissioner revokes the exemption of an insurance intermediary in relation to a particular insurer, and a particular class of insurance business:

(a) the Commissioner must inform the insurance intermediary of the revocation and of the reasons for the revocation; and

(b) the Commissioner must, as soon as practicable, notify that revocation in the Gazette.”.

Broker to notify insured of association with insurer

31. Section 38 of the Principal Act is amended by omitting subsection (3) and substituting the following subsection:

“(3) The question whether corporations are related to each other for the purposes of this section is determined in the same way as the question whether bodies corporate are related bodies corporate would be determined under Division 6 of Part 1.2 of Chapter 1 of the Corporations Law if, in section 46 of that law:

(a) the reference to a body corporate that is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of another body corporate were a reference to a body corporate that is in a position to cast, or control the casting of, more than one-quarter of that number of votes; and

(b) the reference to a body corporate holding more than one-half of the issued share capital of another body corporate were a reference to a body corporate holding more than one-quarter of the issued share capital of another body corporate.”.

Insertion of new sections

32. After section 40 of the Principal Act the following sections are inserted:

Decision-making principles

“41A.(1) The Commissioner may, by signed instrument, formulate principles (‘decision-making principles’) to be complied with by him or her in making a decision under section 21, 25, 31D, 31H or 34A.

“(2) In making a decision under any of those sections, the Commissioner must comply with any relevant decision-making principles.

“(3) Decision-making principles are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

Insurance intermediaries taken to be associated because of prior conduct of personnel

“41B.(1) For the purposes of section 21 or 31D, an insurance intermediary (the ‘subject intermediary’) is taken to be an associated insurance intermediary in respect of another insurance intermediary (the ‘failed intermediary’) that has failed to discharge the ordinary obligations of an insurance intermediary if;

(a) a director of the subject intermediary:

(i) was a director, principal, employee or agent of the failed intermediary; and

(ii) if the director of the subject intermediary was an employee or agent of the failed intermediary—was in a position of influence or control over the operations of the failed intermediary; or

(b) the principal of the subject intermediary:

(i) was a director, principal, employee or agent of the failed intermediary; and

(ii) if the principal of the subject intermediary was an employee or agent of the failed intermediary—was in a position of influence or control over the operations of the failed intermediary; or

(i) was a director, principal, employee or agent of the failed intermediary; and

(ii) is in a position of influence or control over the operations of the subject intermediary; and

(iii) if the employee of the subject intermediary was an employee or agent of the failed intermediary—was in a position of influence or control over the operations of the failed intermediary; or

(d) an agent of the subject intermediary:

(i) was a director, principal, employee or agent of the failed intermediary; and

(ii) is in a position of influence or control over the operations of the subject intermediary; and

(iii) if the agent of the subject intermediary was an employee or agent of the failed intermediary—was in a position of influence or control over the operations of the failed intermediary.

“(2) In subsection (1):

(a) a reference to a principal of an insurance intermediary is a reference to the principal of an insurance intermediary that is not a corporation and includes a sole trader; and

(b) a reference to an employee or agent of an insurance intermediary includes a reference to an employee or agent of an insurance intermediary that is not a corporation.”.

Insertion of new section

33. After section 46 of the Principal Act the following section is inserted:

Time for bringing proceedings

“46A.(1) Despite anything in any other Act, proceedings for the summary prosecution of an offence against this Act may be brought at any time within the period of 3 years after the commission of the offence.

“(2) If the Attorney-General consents in writing proceedings may be brought at any later time.”.

Further amendments of the Principal Act

34. The Principal Act is further amended as set out in the Schedule.

Application of amendments—section 21 of the Principal Act

35. The amendment of section 21 of the Principal Act that requires the production of satisfactory audited accounts to the Commissioner applies only in relation to accounting periods that start on or after the day on which section 16 of this Act commences.

Transitional—applications for registration and renewal of registration

36.(1) If:

(a) an application for registration under Part III of the Principal Act was made before the day on which section 16 of this Act commences; and

(b) the Commissioner had not registered the applicant or had refused to register the applicant before that day;

the Principal Act as in force immediately before that day continues to apply in relation to the application on and after that day.

(2) If:

(a) an application for renewal of registration under Part III of the Principal Act was made before the day on which section 16 of this Act commences; and

(b) the Commissioner had not renewed or had refused to renew the registration before that day;

the Principal Act as in force immediately before that day continues to apply in relation to the application on and after that day.

(3) If:

(a) an application for renewal of registration is made under Part III of the Principal Act as amended by this Act on or after the day on which section 16 of this Act commences; but

(b) the accounting period referred to in paragraph 21(1A)(e) of the Principal Act as so amended starts before, and ends after, that day;

the reference in that paragraph to satisfactory audited accounts is to be read as a reference to audited accounts that would, had the Principal Act as in force immediately before that day continued to apply, have been satisfactory to the Commissioner under section 21 of the Principal Act as so in force.

Transitional

37. Regulations prescribing liabilities for the purpose of paragraph 19(1)(b) or subparagraph 31B(1)(a)(ii) or 31B(1)(b)(ii) continue in force despite the repeal and re-enactment of those provisions as if made for the purpose of those provisions as so re-enacted.

Transitional—trust money

38. If:

(a) money referred to in section 37 of the Principal Act as in force immediately before the day on which section 29 of this Act commences was paid to a person as agent of an insurer before that day; and

(b) the person had not paid the money to the insurer before that day;

section 37 of the Principal Act as in force immediately before that day continues to apply to the person on and after that day.

Application

39.(1) Subsections 37(2A) and (2B) of the Principal Act as amended by this Act apply to:

(a) money paid to a person as a premium under a contract of insurance or a proposed contract of insurance if:

(i) the money is paid on or after the day on which section 29 of this Act commences; and

(ii) the cover provided by the insurer under the contract commences on or after that day; and

(b) money paid as an instalment of a premium under a contract or a proposed contract of insurance if:

(i) the money is paid on or after the day on which section 29 of this Act commences; and

(ii) the first day of the period to which the instalment relates occurs on or after that day.

(2) If:

(a) money is paid to a person as a premium under a contract of insurance or a proposed contract of insurance on or after the day on which section 29 of this Act commences; and

(b) the cover provided by the insurer under the contract commenced before that day;

section 37 of the Principal Act as in force immediately before that day continues to apply in relation to the money.

(3) If:

(a) money is paid to a person as an instalment of a premium under a contract of insurance or a proposed contract of insurance on or after the day on which section 29 of this Act commences; and

(b) the first day of the period to which the instalment relates was a day before that day;

section 37 of the Principal Act as in force immediately before that day continues to apply in relation to the money.

PART 4—AMENDMENT OF THE INSURANCE LAWS
AMENDMENT ACT 1991

Principal Act

40. In this Part, “Principal Act” means the Insurance Laws Amendment Act 19913.

Phasing-in of capital and solvency requirements

41. Section 47 of the Principal Act is amended by omitting from subsection (2) “Section 19A of the Life Insurance Act 1945 applies to a company registered under that Act” and substituting “If a company is registered under the Life Insurance Act 1945 before the day on which this Act receives the Royal Assent, section 19A of the Life Insurance Act 1945 applies”.

SCHEDULE Section 34

FURTHER AMENDMENTS OF THE INSURANCE (AGENTS AND
BROKERS) ACT 1984

1. Subsection 10(6):

Omit the penalty, substitute:

“Penalty: Imprisonment for 6 months.”.

2. Subsection 11(5):

Omit the penalty, substitute:

“Penalty: 150 penalty units.”.

3. Subsection 13(5):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

4. Subsection 16(1):

Omit the penalty, substitute:

“Penalty: 60 penalty units.”.

5. Subsection 16(1 A):

Omit the penalty, substitute:

“Penalty: 60 penalty units.”.

6. Subsection 17(1):

Omit the penalty, substitute:

“Penalty: 60 penalty units.”.

7. Subsection 19(1):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

8. Subsection 20(3):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

9. Subsection 25(4):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

SCHEDULE—continued

10. Subsection 25A(1):

Omit the penalty, substitute:

“Penalty: 30 penalty units.”.

11. Subsection 25B(1):

Omit the penalty, substitute:

“Penalty: 30 penalty units.”.

12. Subsection 26(11):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

13. Subsection 27(12):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

14. Subsection 29(5):

Omit the penalty, substitute:

“Penalty: Imprisonment for 1 year.”.

15. Subsection 30(3):

Omit the penalty, substitute:

“Penalty: Imprisonment for 6 months.”.

16. Subsection 31(2):

Omit the penalty, substitute:

“Penalty: 60 penalty units.”.

17. Subsection 31B(1):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

18. Subsection 31C(4):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

19. Subsection 31H(4):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

SCHEDULE—continued

20. Subsection 31J(1):

Omit the penalty, substitute:

“Penalty: 30 penalty units.”.

21. Subsection 31K(1):

Omit the penalty, substitute:

“Penalty: A fine not exceeding 30 penalty units.”.

22. Subsection 32(7):

Omit the penalty, substitute:

“Penalty: 60 penalty units.”.

23. Subsection 33(6):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

24. Subsection 34(1):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

25. Subsection 35(3):

Omit the penalty, substitute:

“Penalty: Imprisonment for 1 year.”.

26. Subsection 37(4):

Omit the penalty, substitute:

“Penalty: Imprisonment for 2 years.”.

27. Subsection 38(5):

Omit the penalty, substitute:

“Penalty: 60 penalty units.”.

28. Subsection 39(3):

Omit the penalty, substitute:

“Penalty: Imprisonment for 6 months.”.

29. Section 40:

Omit “knowingly”, substitute “intentionally or recklessly”.

SCHEDULE—continued

30. Section 40:

Add at the end:

“(2) If a director of a company or an employee or agent of a corporation intentionally or recklessly permits or authorises a contravention by the company or corporation, the reference in subsection (1) to the penalty provided in respect of the contravention is a reference to:

(a) the penalty that would apply to an individual in respect of the contravention; or

(b) if there is no penalty provided for an individual—a penalty not exceeding one-fifth of the penalty applying to the company or corporation in respect of that contravention.

“(3) If:

(a) a company or corporation is the agent of an individual; and

(b) a director of the company or an employee or agent of the corporation intentionally or recklessly permits or authorises a contravention of this Act by the company or corporation in its capacity as agent of the individual;

then, despite subsection (1), the offence committed by the company or corporation as agent is punishable by a penalty not exceeding 5 times the penalty applying to the individual.”.

31. Subsection 48(1):

Omit “$500”, substitute “10 penalty units”.

NOTES

1. No. 76, 1973, as amended. For previous amendments, see No. 216, 1973; No. 157, 1976; No. 31, 1977; Nos. 92 and 177 (as amended by No. 26, 1982), 1981; Nos. 54 and 129 (as amended by No. 72, 1984; and No. 16, 1989), 1983; No. 72, 1984; No. 187, 1985; No. 168, 1986; No. 99, 1987; Nos. 38 and 87, 1988; No. 16, 1989; Nos. 32 and 149, 1991; Nos. 1, 6 and 210, 1992; and No. 88, 1993.

2. No. 75, 1984, as amended. For previous amendments, see Nos. 76 and 168, 1986; No. 99, 1987; No. 38, 1988; No. 16, 1989; No. 149, 1991; and No. 210, 1992.

3. No. 1, 1992.

[Minister’s second reading speech made in—

Senate on 16 December 1993

House of Representatives on 23 March 1994]