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INSURANCE CONTRACTS REGULATIONS (AMENDMENT) 1998 NO. 195
EXPLANATORY MEMORANDUMStatutory Rules 1998 No. 195
Minute No. 195 of 1998 - Treasurer
Subject - Insurance Contracts Act 1984
Insurance Contracts Regulations (Amendment)
Section 78 of the Insurance Contracts Act 1984 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act, prescribing, among other things, matters required or permitted to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The proposed amendments:
* replace a reference to the Insurance and Superannuation Commissioner with a reference to the Australian Securities and Investments Commission (proposed Regulation 6); and
* omit regulations which, following the repeal of the secrecy provision in the Act, are no longer required (proposed Regulations 3 - 5).
The proposed regulation amendments are consequential to the Financial Sector Reform legislation which was recently enacted. The Financial Sector Reform legislation is the Government's response to the report of the Financial System Inquiry (the Wallis Committee) and includes the Australian Prudential Regulation Authority Act 1998, the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 and the Financial Sector Reform (Consequential Amendments) Act 1998.
To the extent that it is relevant to the amendments to the Insurance Contracts Regulations, the Financial Sector Reform legislation:
* abolishes the Insurance and Superannuation Commissioner;
* establishes the Australian Prudential Regulation Authority to undertake the prudential
regulation of deposit-taking institutions, insurance companies and superannuation
entities; and
* enlarges the role of the Australian Securities Commission, which is renamed the
Australian Securities and Investments Commission, so that it oversees consumer
protection and market integrity in the financial sector (including superannuation and
insurance).
The role of the Insurance and Superannuation Commissioner is thus divided between the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission. In addition, these bodies will receive certain functions previously carried out by the Reserve Bank and the Australian Competition and Consumer Commission respectively.
Details of the proposed regulations are attached - Attachment A.
The proposed amendments will commence on 1 July 1998.
The Office of Regulation Review has advised that a Regulation Impact Statement is not needed.
This Minute recommends that the Regulations be made in the proposed form.
Authority: Section 78 of the Insurance
Contracts Act 1984
ATTACHMENT A
Proposed Regulation 1 - Commencement
Proposed Regulation 1 provides that the regulations commence on 1 July 1998.
Proposed Regulation 2 - Amendment
Proposed Regulation 2 provides that the Insurance Contracts Regulations are amended as set out in the regulations.
Proposed Regulations 3 to 5 - Regulations 36 to 38
The Insurance Contracts Regulations 36 to 38 currently prescribe particular law enforcement agencies, financial sector supervisory agencies and overseas financial sector supervisory agencies for the purposes of the secrecy provision of the Act (section 11F).
Section 11F is repealed by Item 4, Schedule 12 of the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 because the body which will, from 1 July 1998, be responsible for administering the Insurance Contracts Act 1984, the Australian Securities and Investments Commission, is subject to secrecy and disclosure of information provisions contained in the Australian Securities and Investments Commission Act 1989.
Proposed Regulations 3 to 5 will omit Regulations 36 to 38.
Proposed Regulation 6 - Schedule 2 (Consumer credit insurance)
Schedule 2 of the Insurance Contracts Regulations provides a notice regarding consumer credit insurance for the purposes of paragraph 71A(3)(a) of the Act.
The reference in this notice to the Insurance and Superannuation Commissioner is proposed to be amended to refer instead to the Australian Securities and Investments Commission, consistent with the changed regulatory arrangements outlined above.