protected policy of the general insurer, to meet the entitlements of protected account-holders or relevant policyholders by transferring their accounts or policies to a receiving body. Enable APRA to obtain information from third parties in relation to the FCS APRA may obtain information from APRA may obtain only from any other person (in addition to those specified persons (for example, a specified in the current law) relevant statutory manager of an ADI) to determining and paying amounts information relevant to determining under the FCS. and paying amounts under the FCS. Ensure the effective payout of FCS entitlements to third-party claimants of the policyholder of a failed general insurer when the policyholder is in liquidation Payments made by APRA under the If APRA makes payment under the FCS to an insolvent corporate FCS to an insolvent corporate policyholder and which are the policyholder, it uncertain whether a subject of claims by any third party third party claiming against the claimants against the insolvent insolvent policyholder will be policyholder are to be paid in accorded priority in liquidation, liquidation according to the priority under section 562 of the provided for under section 562 of the Corporations Act, for the amount Corporations Act. claimed and paid to the insolvent policyholder. Enable APRA to make interim payments to claimants under the FCS APRA may, in accordance with It is uncertain whether APRA can regulations, determine the total make a series of interim amount of interim claims made by a determinations allowing additional claimant of a protected policy, and to payments under the insurance FCS. make payments in response to those This may be desirable where, for interim claims. example, the losses insured by a protected policy materialise, and become payable, on multiple occasions over a period of time or where it is expedient to make an initial payment of an undisputed amount and further payments following assessors’ reports. Granting the Treasurer discretion to declare the FCS at an earlier time The Treasurer may now declare the The Treasurer may declare the FCS FCS in relation to an ADI or general in relation to an ADI only when insurer once a statutory manager has APRA has applied to wind up the taken control of the ADI or general ADI, and in relation to a general insurer, in addition to the existing insurer only when it is under judicial preconditions in the law. management or an external administrator has been appointed.
protected policy of the general insurer, to meet the entitlements of protected account-holders or relevant policyholders by transferring their accounts or policies to a receiving body. Enable APRA to obtain information from third parties in relation to the FCS APRA may obtain information from any other person (in addition to those specified in the current law) relevant to determining and paying amounts under the FCS. APRA may obtain only from specified persons (for example, a statutory manager of an ADI) information relevant to determining and paying amounts under the FCS. Ensure the effective payout of FCS entitlements to third-party claimants of the policyholder of a failed general insurer when the policyholder is in liquidation Payments made by APRA under the FCS to an insolvent corporate policyholder and which are the subject of claims by any third party claimants against the insolvent policyholder are to be paid in liquidation according to the priority provided for under section 562 of the Corporations Act. If APRA makes payment under the FCS to an insolvent corporate policyholder, it uncertain whether a third party claiming against the insolvent policyholder will be accorded priority in liquidation, under section 562 of the Corporations Act, for the amount claimed and paid to the insolvent policyholder. Enable APRA to make interim payments to claimants under the FCS APRA may, in accordance with regulations, determine the total amount of interim claims made by a claimant of a protected policy, and to make payments in response to those interim claims. It is uncertain whether APRA can make a series of interim determinations allowing additional payments under the insurance FCS. This may be desirable where, for example, the losses insured by a protected policy materialise, and become payable, on multiple occasions over a period of time or where it is expedient to make an initial payment of an undisputed amount and further payments following assessors’ reports. Granting the Treasurer discretion to declare the FCS at an earlier time The Treasurer may now declare the FCS in relation to an ADI or general insurer once a statutory manager has taken control of the ADI or general insurer, in addition to the existing preconditions in the law. The Treasurer may declare the FCS in relation to an ADI only when APRA has applied to wind up the ADI, and in relation to a general insurer only when it is under judicial management or an external administrator has been appointed.
c2017-t212012-Explanatory-Memorandum.docx