holds more than 50 per cent of the issued share capital of the company. issued share capital of the company. In contrast, under the Banking Act and Life Insurance Act, the threshold percentage is 50 per cent. Insurance and Life Insurance Acts to have effect despite the Corporations Act The Insurance and Life Insurance It is unclear whether the Insurance Acts have effect despite the Act or Life Insurance Act have Corporations Act there is a priority over the Corporations Act conflict between the provisions of there is a conflict between the those Acts. provisions of those Acts. By contrast, the Banking Act states that in the event of an inconsistency between the Banking Act and Corporations Act, the provisions in the Banking Act will prevail to the extent of the inconsistency. Detailed explanation of new law General provisions The Bill expands the existing statutory management regime for ADIs to apply to related bodies corporate of the regulated entity in certain circumstances. This expanded statutory management regime under the Banking Act is then adapted into the Insurance and Life Insurance Act (see 2.41 to 2.43) so that a statutory manager can now be appointed to a regulated entity, its authorised NOHC, and a subsidiary of the authorised NOHC or a subsidiary of the regulated entity. For ease of reading, the Explanatory Memorandum will first address the amendments applying the statutory management regime to related bodies corporate in the Banking Act, followed by an explanation of how the newly expanded Banking Act statutory management regime is transposed into the Insurance and Life Insurance Acts. Cross-references to the equivalent new provisions of the Insurance and Life Insurance Acts in the Schedules to the Bill are included below for ease of reference. Statutory management of group entities Definitions related body corporate – The Bill inserts a new definition of body corporate’. It is ‘related defined as a body corporate that is related to the first-mentioned body corporate. For the purposes of the Banking Act, this is determined in the same way as the Corporations Act. [Schedule 1, item 10, Schedule 2, item 9, Schedule 3, item 99, subsection 5(1) of the Banking Act, subsection 3(1) of the Insurance Act, and the Schedule Dictionary of the Life Insurance Act]
holds more than 50 per cent of the issued share capital of the company. issued share capital of the company. In contrast, under the Banking Act and Life Insurance Act, the threshold percentage is 50 per cent. Insurance and Life Insurance Acts to have effect despite the Corporations Act The Insurance and Life Insurance Acts have effect despite the Corporations Act there is a conflict between the provisions of those Acts. It is unclear whether the Insurance Act or Life Insurance Act have priority over the Corporations Act there is a conflict between the provisions of those Acts. By contrast, the Banking Act states that in the event of an inconsistency between the Banking Act and Corporations Act, the provisions in the Banking Act will prevail to the extent of the inconsistency. Detailed explanation of new law General provisions The Bill expands the existing statutory management regime for ADIs to apply to related bodies corporate of the regulated entity in certain circumstances. This expanded statutory management regime under the Banking Act is then adapted into the Insurance and Life Insurance Act (see 2.41 to 2.43) so that a statutory manager can now be appointed to a regulated entity, its authorised NOHC, and a subsidiary of the authorised NOHC or a subsidiary of the regulated entity. For ease of reading, the Explanatory Memorandum will first address the amendments applying the statutory management regime to related bodies corporate in the Banking Act, followed by an explanation of how the newly expanded Banking Act statutory management regime is transposed into the Insurance and Life Insurance Acts. Cross-references to the equivalent new provisions of the Insurance and Life Insurance Acts in the Schedules to the Bill are included below for ease of reference. Statutory management of group entities Definitions – related body corporate The Bill inserts a new definition of ‘related body corporate’. It is defined as a body corporate that is related to the first-mentioned body corporate. For the purposes of the Banking Act, this is determined in the same way as the Corporations Act. [Schedule 1, item 10, Schedule 2, item 9, Schedule 3, item 99, subsection 5(1) of the Banking Act, subsection 3(1) of the Insurance Act, and the Schedule Dictionary of the Life Insurance Act]
c2017-t212012-Explanatory-Memorandum.docx