Commonwealth Numbered Regulations - Explanatory Statements

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INSURANCE (AGENTS AND BROKERS) REGULATIONS (AMENDMENT) 1995 NO. 57

Statutory Rules 1995 No. 57

Issued by the Authority of the Treasurer

Insurance (Agents and Brokers) Act 1984

Insurance (Agents and Brokers) Regulations (Amendment)

Section 48 of the Insurance (Agents and Brokers) Act 1984 provides that the Governor-General may make regulations, not inconsistent with the Act, that are required or permitted by the Act or are necessary or convenient to be prescribed for giving effect to the Act.

Section 4 of the Acts Interpretation Act 1901 provides for the exercise of certain powers between the passing and the commencement of an Act.

The Act provides that registered insurance intermediaries should hold professional indemnity insurance cover in respect of prescribed liabilities. The Insurance (Agents and Brokers) Regulations (Amendments) which came into effect on 1 October 1994 were intended, inter alia, to increase the minimum level of cover required from $500,000 to $1,000,000 for all registered insurance intermediaries.

The intention was that the minimum prescribed liability of $1,000,000 was to be applied only to the new and small business. For larger on-going business the level of cover required was to increase in proportion with the level of premiums received. However, the present drafting of regulation 3 could result in intermediaries being insured to a maximum of only $1,000,000.

The amending regulation clarifies the level of professional indemnity insurance required.