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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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