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MOTOR ACCIDENT INSURANCE ACT 1994 - SECT 96

Inducement for CTP insurance business prohibited

96 Inducement for CTP insurance business prohibited

(1) A licensed insurer or other person acting for a licensed insurer must not give, or offer to give, to an entity, including an entity acting for the insurer, an inducement for directing CTP insurance business to the licensed insurer.
Penalty—
Maximum penalty—300 penalty units
(2) A licensed insurer or other person does not contravene subsection (1) if—
(a) the inducement is given or offered to be given to an entity only on the basis that the entity will direct an associate of the entity—
(i) to enter into or renew a CTP insurance policy with the licensed insurer; and
(ii) to ask the licensed insurer, on each occasion the associate pays a premium to the licensed insurer, to make a particular donation to—
(A) a particular registered charity; or
(B) a particular road safety research entity; or
(C) an entity prescribed under a regulation; and
Note—
‘Direct’ has a meaning that corresponds to the defined term
"directing CTP insurance business" .
(b) the inducement is the donations made by the licensed insurer on every occasion the associate makes the request mentioned in paragraph (a) (ii) ; and
(c) the licensed insurer does not intend to, and does not, establish or treat the cost of the inducement as a cost, expense or charge under or against the insurer’s CTP insurance policies or CTP business generally.
(3) Also, a licensed insurer or other person does not contravene subsection (1) in relation to a CTP insurance policy if—
(a) the entity to whom the inducement is given, or offered to be given, is the person who is to enter or renew the CTP insurance policy (the
"policy holder" or
"proposed policy holder" ); and
(b) the licensed insurer does not intend to, and does not, establish or treat the cost of the inducement as a cost, expense or charge under or against the insurer’s CTP insurance policies or CTP business generally.
(4) However, subsection (3) does not apply if—
(a) the policy holder or proposed policy holder conducts the business of selling motor vehicles; and
(b) the CTP insurance policy is for a motor vehicle that will be sold in the ordinary course of the business, even if the vehicle is not for sale when the inducement is given or offered; and
(c) the entering or renewal of the CTP insurance policy by the policy holder or proposed policy holder would effectively direct CTP insurance business to the licensed insurer when the vehicle is sold.
(5) Subsections (2) , (3) and (4) provide for exemptions under the Justices Act 1886 , section 76 .
(6) A court that convicts a licensed insurer of an offence against subsection (1) may, by order, withdraw the licence.
(7) In this section—

"associate" includes member, employee or supporter.

"directed CTP insurance business" means the CTP insurance business directed to, or obtained for, a licensed insurer because of an inducement.

"directing CTP insurance business" , to a licensed insurer, includes—
(a) obtaining CTP business for a licensed insurer; and
(b) giving any form of advice, encouragement or suggestion intended to direct CTP business to a licensed insurer.

"inducement" means any reward, consideration or benefit, including, for example, the following—
(a) a commission;
Examples—
• commissions based on any premium for CTP insurance policies resulting from directed CTP insurance business
• commissions paid on insurance products not involving CTP insurance business but based on directed CTP insurance business
(b) an administration payment;
Example—
• a fee payable to a motor dealer based on the cost to the motor dealer for work done in directing the directed CTP insurance business to the licensed CTP insurer
(c) general financial support.
Examples (where the directed CTP insurance business is being directed to a CTP insurer by a motor dealer)—
• discounts or subsidies applying to premiums for insurance relating to the motor dealer’s business or business connected to the motor dealer’s business
• contributions made to the motor dealer’s general operating expenses, including floor plan charges, entertainment, sponsorship, memberships, sales incentive awards and associated functions

"registered charity" means—
(a) a charity registered under the Collections Act 1966 ; or
(b) a charity registered under a law of another State—
(i) that is prescribed under a regulation for this section; or
(ii) if a law is not prescribed under subparagraph (i) —with objects similar to the Collections Act 1966 and that provides for the registration of charities.

"road safety research entity" means an entity that is, or is conducting, a research program, affiliated with a university, relating to—
(a) the causes of motor vehicle accidents and their prevention; or
(b) rehabilitation of persons injured in motor vehicle accidents.



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