Bills Digest no. 29 2007–08
Financial Sector Legislation Amendment (Discretionary
Mutual funds and Direct Offshore Foreign Insurers) Bill
2007
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Position of significant interest
groups
Financial implications
Key issues
Main provisions
Conclusion
Endnotes
Contact officer & copyright details
Passage history
-
bring Direct Offshore Foreign Insurers (DOFIs)
under prudential regulation
-
enable information to be collected and collated
to determine the nature and scope of Discretionary Mutual Funds
(DMFs) operations, and
-
support changes to the Corporations (National
Guarantee Fund Levies) Amendment Bill 2007.
DOFIs are foreign insurers that are not
authorised in Australia. These unauthorised insurers can sell
insurance in Australia either: [1]
-
directly by establishing a subsidiary or branch
in Australia and applying to the Australian Prudential Regulation
Authority (APRA) for authorisation under the Insurance Act
1973 (the Insurance Act) to conduct insurance business,
or
-
indirectly through an Australian Financial
Services Licence (AFSL) holder that is a general insurance agent or
broker, without having to be subject to the provisions of the
Insurance Act because they are not regarded as conducting an
insurance business in Australia.
DMFs offer discretionary cover, which is an
insurance-like product where the DMF will meet the costs of a claim
at its discretion. There is no contractual obligation on the DMF to
meet the claim. [2]
This type of cover is regarded as an
alternative to insurance. A DMF is said to cover risks for which
insurance is not generally available, and if insurance is
available, it is not affordable. [3]
DMFs are not prudentially regulated under the
Insurance Act. [4]
The Bill addresses comments made at the HIH
Royal Commission into the failure of the HIH Insurance Group.
[5]
Justice Owen recommended that prudential
regulation be extended to all discretionary insurance-like
products, to the extent possible within constitutional limits.
Justice Owen also commented upon insurance cover written offshore
but did not make any recommendations in relation to that. [6]
In response to Justice Owen s comments, the
Government commissioned a Review of Discretionary Mutual Funds
and Direct Offshore Foreign Insurers headed by Mr Gary Potts
(the Potts Review). [7]
The purpose of the review was to consider what
would be appropriate levels of prudential and consumer regulation
for DMFs and DOFIs. [8]
The key findings of the Potts Review are as
follows: [9]
-
discretionary mutual cover to be offered only
as a contract of insurance under the Insurance Act unless APRA
considers that the individual entity poses no contingent risk that
would have to be met by additional contributions by members, which
are not defined
-
APRA to collect and collate information on
business that DMFs write under the exemption, and
-
it was considered that this approach would only
target prudential regulation where it was necessary and not
penalise DMFs that fill in market gaps.
[10]
-
allow DOFIs that market insurance in Australia
to be exempted from prudential regulation if APRA considers that
those DOFIs are domiciled in countries with comparable prudential
regulation
-
DOFIs that do not meet that test would be able
to market insurance in Australia as authorised insurers, through
branches or subsidiaries
-
give APRA the enforcement and investigative
powers to perform that role
-
APRA to have an information collecting role in
relation to DOFI, and
-
it was considered that this approach would not
disrupt a market that was under strain at the time and improved
information disclosure requirements would reduce risks associated
with foreign insurers from low status jurisdictions.
The Department of Treasury (Treasury)
published a discussion paper, Regulation of Discretionary
Mutual Funds and Direct Offshore Foreign Insurers, in December
2005 (the Government s discussion paper) and invited submissions.
[11]
The Government s discussion paper sought to
address the following issues relating to prudential regulation of
DMFs and DOFIs: [12]
-
determining a mechanism to prudentially
regulate DMFs
-
how to define contingent risk
-
structuring an exemption for no contingent
risk
-
elegibility for the exemption
-
information to be collected
-
transitional arrangements
-
APRA s enforcement powers, and
-
additional consumer protection measures on
exempt DMFs.
-
defining marketing insurance in Australia
-
assessing eligibility of comparable regimes for
exemption
-
information to be collected
-
what are other possible exemptions
-
how to determine and implement the market
significance test
-
transitional issues
-
determining appropriate enforcement powers for
APRA, and
-
additional consumer protection measures on
exempt DOFIs.
Submissions reflected
a variety of responses to the proposals in the Government s
discussion paper.
There was general agreement with the proposals
in the Government s discussion paper.
However, while some submissions provided
in-principle support for the proposals in the Government s
discussion paper, those submissions also expressed concerns
regarding aspects of those proposals such as costs of
implementation [13]
and the difficulty of implementing the measures proposed. [14]
A view was also expressed that the objectives
of the Potts Review and the Government s discussion paper to
prohibit commercial arrangements that had worked satisfactorily and
to target areas of highest risk were not met by the proposals
outlined in the Government s discussion paper. [15]
On 3 May 2007, the Government announced
reforms relating to DOFIs and DMFs after consulting with
stakeholders. [16]
According to the Government, the purpose of
these reforms is to protect consumers and businesses buying
insurance and to ensure that Australian insurance businesses remain
internationally competitive. [17]
APRA stated that it would modify its current
prudential framework to clarify how it will apply to different
categories of insurers according to their risk profiles and
undertook to release a discussion paper and to consult with the
insurance industry. [18]
On 21 June 2007, the Bill was introduced into
the House of Representatives by the Parliamentary Secretary to the
Treasurer, the Hon. Mr Chris Pearce, MP and the Bill was referred
to the Senate Standing Committee on Economics (the Committee) for
inquiry and report. [19]
Most of the submissions to the Committee s
inquiry indicated support for the Bill in principle. However,
concerns were expressed regarding:
-
ability of professions to obtain adequate
levels of professional indemnity insurance
[20]
-
access of Australian companies to DOFIs,
[21] and
-
lack of clarity regarding exemption provisions
in the Bill.
[22]
The Committee also noted evidence that
Treasury is planning further consultation with stakeholders
regarding exemptions and that it aims to achieve a balance between
maintaining prudential standards with exemptions that are
practical, of minimal costs to government and customers, as well as
being flexible in adapting to insurance market cycles. [23]
In its report released on 1 August 2007, the
Committee stated that it is:
satisfied that the consultative mechanism to be
implemented by Treasury with regard to DOFI exemptions will produce
a set of regulatory provisions that will satisfy the requirements
of Australian businesses for access to suitable insurance products,
while still maintaining the required prudential standards for the
insurance industry. The Committee supports the closure of
regulatory gaps identified by the HIH Royal Commission, and the
International Monetary Fund. The Committee does not share the fears
expressed by some witnesses as to possible significant negative
market effects from changes to regulation. Nonetheless, Treasury
and APRA should actively monitor market effects to be certain of
this. [24]
The Committee recommended that the Bill be
passed. [25]
Back to top
The following organisations positions on the
Bill are contained in their submissions to the Committee s inquiry
on this Bill.
UAC represents more than 65 full members who
are underwriting agencies in Australia. [26] These agencies manage insurance
transactions on behalf of principal insurers, many of whom are
based overseas. [27]
UAC agrees that
under-capitalised insurers that may be domiciled
in jurisdictions that are unregulated or insufficiently regulated
are a risk and should not be supported.
[28]
However, UAC pointed out that:
Australian insurance buyers need to be able to
access offshore markets because the products and services they
require are often unavailable in the Australian market, or
unavailable at an affordable price
[29]
and expressed concern that:
Some UAC members place only small portions of
premium income with DOFIs and it is unlikely those DOFIs would
agree to fund the cost of being regulated in Australia when their
premium income derived from domestic business is very low [D]espite
the fact that these insurers may offer innovative products,
underwriting expertise and capacity, if they view the burden of
regulation under the Insurance Act 1973 as too onerous, their
skills and abilities will be lost to the Australian market.
[30]
The Association of Consulting Engineers of
Australia (ACEA) is an industry body representing firms that
provide engineering technology and management consulting services.
[31]
ACEA expressed concern about the effect of the
Bill on the ability of the consulting engineering industry to
obtain professional indemnity insurance cover, without which,
engineering and consultancy services would be unavailable to
governments, industry and consumers. [32]
According to ACEA:
the proposal in the DOFI Bill will be
detrimental for consumers because decreased competition from DOFIs
coupled with the requirement to buy locally means that insurers are
less likely to provide cover at commercially competitive rates or
to insure an adequate range of risks, because they have a captive
market. Even if local insurers do attempt to manage larger and more
complex risks, previously insured overseas, they will look to
spread that risk by increasing the cost of premiums.
[33]
In addition, ACEA recommended that:
1. the Bill be amended to reflect the preferred approach set out
in the Potts Review, that is:
Allow DOFIs marketing insurance in Australia to be exempt from
prudential regulation in Australia if they are domiciled in a
country APRA considers to have comparable prudential regulation,
subject to a market significance threshold to prevent established
authorised insurers moving offshore. DOFIs not meeting this test
would be able to market insurance in Australia as an authorised
insurer, through a branch or subsidiary.
2. If the DOFI Bill progresses unamended then Professional
Indemnity Insurance must be exempt from the requirements in the
Bill through the regulations.
3. ACEA also recommends that the issues surrounding the
contractual behaviour of public and private sector clients and
their understanding of risk must be addressed. The adoption of more
appropriate risk management processes must be enforced in order to
encourage the re-entry of Australian insurers back into the PI
market. [34]
The National Insurance Brokers Association
(NIBA) represents insurance brokers in Australia, who handle
approximately 90 per cent of insurance premium transactions by
insurance brokers across Australia. [35]
According to NIBA, insurance brokers in
Australia must hold an Australian Financial Services (AFS) Licence
and the Australian Securities and Investments Commission (ASIC)
regulates them. [36]
NIBA supports the provisions of the Bill
relating to DMFs. [37]
However, NIBA expressed several concerns about
provisions relating to the DOFIs. These concerns are: [38]
-
the exemption details, one of the most
important aspects of the proposed DOFI requirements, have yet to be
determined and there is considerable doubt as to just how extensive
they will be and to whom they will apply
-
NIBA would not want to see any limiting of
access to foreign insurers leading to restricted availability,
higher premiums and a significantly lower level of competition in
the Australian insurance market, and
-
under the Bill, insurance brokers are prevented
by law from performing functions that their clients are legally
able to perform, namely placing insurance with overseas insurance
companies not authorised by APRA. The extent of NIBA s concerns in
this regard will very much depend on the extent and nature of the
exemptions that are put in place.
In addition, NIBA stated that, in relation to
larger businesses, global markets:
provide these businesses with consistency of
cover particularly for more complex risks and in a hard market
cycle are often the only markets offering meaningful cover.
[39]
The Law Council of Australia (the Law Council)
is the peak national representative body of the legal profession in
Australia. [40]
The Law Council pointed out that DOFIs offer
greater scope and specialisation of cover particularly in relation
to complex risks and expressed concern that:
the Bill will have an unnecessarily disruptive
effect on the insurance markets and its members. It is an effect
likely to become even more pronounced upon a return to a hard
market cycle.
[41]
In addition, the Law Council submitted that
the proposed exemption provisions would increase the industry s
bureaucratic compliance burdens and administration costs, pointing
out that this is at odds with the Government s stated aim to
streamline compliance costs and burdens of Australian businesses.
[42]
According to the Law Council:
The Bill will increase costs for DOFIs. DOFIs not presently
subject to the requirements of the Insurance Act 1973 will incur
significant costs ensuring that their arrangements are not caught
to come within the proposed regime. Where their practices do bring
them within the scope of the Bill s regime, DOFIs will face costs
in ensuring their compliance with the new requirements
However, where the DOFI has already organised its capital and
investment strategy and its systems and procedures in compliance
with its own regulatory requirements, any changes required to
comply with Australia law would be likely to be significant.
[43]
As a result, the Law Council also expressed
concern that DOFIs that do not seek to become authorised in
Australia may no longer make their products available. [44]
The Law Council argued that the loss of access
to these DOFIs will have several detrimental effects including:
Reduce access to global markets that offer diversity,
specialisation of products and consistency of cover across market
cycles. Such markets also allow sophisticated consumers to develop
risk analysis and management skills required to transact
globally;
Local cover would in an environment of reduced competition
become more expensive. The presence of overseas insurers in the
market place increases the competitiveness and efficiency of local
insurers;
Clients at times require their legal advisors to carry high
levels of insurance cover. If such cover were not available locally
on appropriate terms, it could affect the ability of Australian law
firms to act for such clients; [45]
The Insurance Council of Australia (the
Insurance Council), which is the representative body of Australia s
general insurance industry, [46] agreed with the general objectives of the Bill
but emphasised that consumer protection and level regulation are
paramount. [47]
However, the Insurance Council expressed
concern that the proposed exemption regime would not give force to
what it considers as being paramount objectives. [48]
According to the Insurance Council:
Exemptions should be minimal and only where
there is a demonstrated inability of Australian insurers to provide
cover.
[49]
There are likely to be
costs implications for all stakeholders of this Bill, including
Australian insureds that use DOFIs and Australian authorised
insurers. However, those costs are difficult to estimate at this
stage.
The Digest will focus
on costs to DFOIs and APRA.
There would be significant financial costs to
DOFIs as any DOFI wishing to carry on a business in Australia must
comply with requirements.
The current application fee for APRA
authorisation as a general insurer is $68 200. [50]
In addition, there would be ongoing reporting
costs and for those DOFIs providing professional indemnity cover, a
National Claims and Policy Database levy. [51]
There would be significant administrative
costs relating to:
It is stated that APRA s costs in modifying
its prudential framework are estimated at between $500 000 and $1
000 000. [52]
In addition, there would be the costs involved
in monitoring the exemptions and data gathering. [53]
Several key issues have been identified
through the consultation process regarding this Bill. These are the
need to:
-
protect consumers of insurance and
insurance-like products
-
ensure that Australian businesses remain
internationally competitive
-
minimise administration costs of compliance
with proposed requirements
-
ensure that the industries and professions in
Australia faced with more complex risks have access to adequate
types and levels of cover, and
-
ensure that the implementation of proposed
provisions of the Bill is not overly burdensome.
Back to top
Schedule 1 of the Bill proposes amendments to
the Financial Sector (Collection of Data) Act 2001.
The proposed provisions in Schedule
1 enable APRA to collect information about and monitor
DMFs.
Item 4 of Schedule
1 sets out what is and is not a DMF. A DMF is a fund to
make discretionary payments when a specified event happens, in
circumstances where it is uncertain whether or when that event will
happen. A DMF is either:
-
a fund to which more than one person
contribute. Payments out of a DMF may be made in relation to
contributors liabilities, losses damages or expenses, or
-
declared to be a DMF, or is included in a class
of funds declared as being DMFs, by regulations.
-
a contributor has a legal or equitable right to
payment for liabilities, losses damages or expenses, or
-
regulations declare that the fund is not a DMF
or that the class of funds in which the fund is included are not
DMFs.
Item 6A of the Bill proposes
that, in relation to DMFs, the Act would not apply to State
insurance that does not extend beyond the limits of that State.
This is because under the Constitution, Federal Parliament s
legislative power does not extend to intra State insurance.
Schedule 2 of the Bill
relates to DOFIs and proposes amendments to the Corporations
Act 2001 (the Corporations Act) and the Insurance Act.
Item 1 proposes a
new section 985D to be inserted
in the Corporations Act prohibiting Australian Financial Services
Licensees and their authorised representatives from dealing in
general insurance products that are not obtained from authorised
insurers, unless it does not constitute insurance business as
defined in section 3A of the Insurance Act.
An insurer is authorised if that insurer
is:
-
a general insurer or Lloyd s underwriter under
the Insurance Act, or
-
as otherwise determined by the Insurance
Act.
According to the proposed
Note in section 985D(2), the
defendant had the evidentiary burden of proving that it, he or she
was not engaged in insurance business as defined. According to
subsection 13.3(6) of Schedule 1 of the Criminal Code Act
1995 (the Criminal Code)
"evidential burden",
in relation to a matter, means the burden of adducing or pointing
to evidence that suggests a reasonable possibility that the matter
exists or does not exist.
According to the proposed section
985D(4), failure to comply is a strict liability offence.
Strict liability is defined in section 6.1 of the Criminal Code as
liability in which there are no fault elements (in other words, the
mere fact that the event has occurred is sufficient to establish
liability) and the defence of mistake is available.
This Committee noted that the Explanatory
Memorandum to the Bill does not refer to subsection
985D(4) nor explain why it was necessary to create a
strict liability offence. [54]
The Committee has sought the Treasurer s
advice as to whether matters in Part 4.5 of the Framing of
Commonwealth Offences, Civil Penalties and Enforcement Powers
were considered when creating this provision. [55]
In addition, the Committee stated that:
Pending the Treasurer s advice, the Committee
draws Senators attention to the provision, as it may be considered
to trespass unduly on personal rights and liberties, in breach of
principle 1(a)(i) of the Committee s terms of reference. [56]
Item 3 proposes amendments to
the definition of authorised person in subsection
3(1) of the Insurance Act relating to the definition of
authorised person. Except for the new Part VA of
the Insurance Act, authorised person would refer to a person
authorised in writing by APRA under section 3(1A) of the Insurance
Act. For the purposes of Part VA, authorised
person would refer to APRA or a person authorised in writing by
APRA for the purposes of Part
VA.
Items 4-6 proposes amendments
to the definition of insurance business subsection
3(1).
According to item 5,
reinsurance business conducted by foreign reinsurers that are not
general insurers would not be included in the definition of
insurance business.
Item 6 proposes new
subsections 3(5), 3(6) and 3(7), which clarify what is
meant by a business incidental to insurance business and to carry
on insurance business in Australia .
A person s business is incidental to insurance
business to the extent that it involves:
-
inducing others to enter into insurance
contracts with that person as insurer
-
publishing or distributing statements that the
person is willing to enter into insurance contracts as insurer,
and/or
-
getting such a statement published or
distributed.
A person carries on an insurance business in
Australia if that person carries on a business outside Australia,
which if it was carried on within Australia, would be regarded as
insurance business under the Insurance Act and a second person in
Australia acts either:
-
directly or indirectly on behalf of the first
person
-
as an insurance broker of insurance provided by
the first person, or
-
directly or indirectly on behalf of that
insurance broker.
In addition, in determining whether a person
carries on insurance business in Australia, the following acts done
outside of Australia are taken to occur in Australia to the extent
that it has effect in Australia:
-
inducing others to enter into insurance
contracts with that person as insurer
-
publishing or distributing statements that the
person is willing to enter into insurance contracts as insurer,
and/or
-
getting such a statement published or
distributed.
Item 7 proposes transitional
provisions. Item 6 amendments would not apply to
entities or a class or entities specified in the regulations for a
period of time specified in the regulations, which would be less
than two years.
Item 8 proposes a new
section 3A, which refers to the regulations that would
specify when insurance contracts do not constitute insurance
business. This relates to the exemptions that will be covered by
regulations.
The Committee noted that proposed para
3A(3)(a) provides that a determination that would be made
under the regulations pursuant to para 3A(1)(b) is
not a legislative instrument and that the Explanatory Memorandum to
the Act did not address this provision. [57]
The Committee sought the Treasurer s advice as
to whether: [58]
-
the provision is declaratory or substantive,
and
-
this information with a rationale for a
substantive exemption could be included in the Explanatory
Memorandum.
According to the Committee:
it may be considered to insufficiently subject
the exercise of legislative power to parliamentary scrutiny, in
breach of principle 1(a)(v) of the Committee s terms of reference.
[59]
Item 9 proposes a new
section 11A that would enable APRA to seek an injunction
restraining unauthorised insurance business activity. This
includes:
Injunctions may be varied or discharged.
APRA is protected from having to give
undertaking as to damages as a condition of granting an interim
injunction.
The Court may make an order for damages
instead of issuing a restraining injunction.
The effect of these proposed amendments is
that DOFIs that carry on insurance business in Australia directly
or through agents or brokers will be captured by the Insurance Act.
Unless they are subject to an exemption, these DOFIs must become
authorised under sections 9 and 10 of the Insurance Act in order to
carry on an insurance business in Australia.
Item 12 proposes a
new Part VA,
dealing with investigations of unauthorised insurance. These new
provisions would give additional powers enabling APRA to
investigate alleged instances of unauthorised insurance business,
as well as the aiding and abetting thereof. This includes access to
premises, as well as securing the co-operation of another in
producing documents and providing assistance.
The Committee noted that proposed
subsection 62D(2) would negate the privilege
against self incrimination for a person who must provide
information or produce a document under proposed section
62C. [60]
The Committee recognises that public benefit
in obtaining information may outweigh any breach of civil rights
and notes that the circumstances in which such information is
admissible as evidence in proceedings is limited. However, the
Committee also notes that such limitation only applies to
information directly provided by the person, not to information
that is obtained indirectly. [61]
The Committee sought an explanation from the
Treasurer about this and warned that:
Pending the Treasurer s advice, the Committee
draws Senators attention to the provisions, as they may be
considered to trespass unduly on personal rights and liberties, in
breach of principle 1(a)(i) of the Committee s terms of reference.
[62]
Items 13-28 propose
amendments to section 63 relating to the review of
certain decisions. These amendments are in particular:
-
new definition of decision maker
-
new definitions of person affected by a
reviewable decision and reviewable decision , and
-
repealed definition of person affected by a
reviewable decision of the Treasurer or APRA and reviewable
decision of the Treasurer .
A reviewable decision would mean a decision of
the decision maker, in other words, the Treasurer, APRA or whoever
makes a determination under proposed subsection
3A(3).
Items 29-33 propose
amendments to section 64 in relation to Statements
accompanying notification of decisions. These amendments correspond
to the new definition of decision maker in section
63.
Item 36 proposes new
sections 115AA and 115AB that would enable APRA to access
information relating to alleged instances of unauthorised insurance
business activities.
The Committee expressed concern about the
possible abrogation of the privilege of self incrimination in the
proposed subsection 115AB(2).
[63]
Please refer to the same discussion above
regarding proposed subsection 62D(2).
Items 37 and 38 propose
changes to the procedure relating to obtaining of warrants.
Items 39-52 propose
amendments to section 118 relating to the
clarification of the requirements and role of agents in
Australia.
In particular, an agent appointed under
section 118 would have to be:
-
an individual Australian resident
-
a body corporate that is incorporated in
Australia, or
-
an entity that is specified in the regulations
as agent for the purposes of section 118.
Item 1 of Schedule
3 proposes a small change to the note at
subsection 889J(2) of the Corporations Act, specifying a limit on
the amount of levy payable to the Securities Exchanges Guarantee
Corporation in a financial year under the Corporations
(National Guarantee Fund Levies) Act 2001.
This proposed amendment supports the
amendments proposed in the Corporations (National Guarantee Fund
Levies) Amendment Bill 2007. [64]
Conclusion
The Government has stated that these proposed
amendments will
enhance the protection for Australians buying
insurance and will encourage competition and innovation in the
Australian general insurance market.
[65]
[1]. See: The Hon.
Peter Dutton, Minister for Revenue and Assistant Treasurer,
Enhancing the Integrity of Insurance in Australia, media
release, Parliament House, Canberra, 3 May 2007 p. 2 at
http//assistant.treasurer.gov.au/pcd/content/pressreleases/2007/042.asps
accessed 25 July 2007; Gary Potts, Review of Discretionary
Mutual Funds and Direct Offshore Foreign Insurers, review
prepared for the Commonwealth Government, Treasury, Canberra, May
2004 at http//dmfreview.treasury.gov.au, accessed on 25 July
2007.
[2]. See: The Hon.
Peter Dutton MP, Minister for Revenue and Assistant Treasurer, op
cit; Gary Potts, op. cit.
[3]. See: The Hon.
Peter Dutton MP, Minister for Revenue and Assistant Treasurer, op
cit; Gary Potts, op. cit.
[4]. See: The Hon.
Peter Dutton MP, Minister for Revenue and Assistant Treasurer, op
cit; Gary Potts, op. cit.
[5]. The Hon. Peter
Costello MP, Treasurer, Government s Response to the
Recommendations of the HIH Royal Commission, media release,
Parliament House, Canberra, 12 September 2003, at
http//www.treasurer.gov.au/tsr/content/pressreleases/2003/082.asp,
accessed on 25 July 2007.
[7]. ibid. p. 2; Gary
Potts, Review of Discretionary Mutual Funds and Direct Offshore
Foreign Investors Background Information and Public
Submissions, review prepared for the Commonwealth Government,
Treasury, Canberra, May 2004, p. 1 at:
http//dmfreview.treasury.gov.au .
[9]. Gary Potts,
Review of Discretionary Mutual Funds and Direct Offshore
Foreign Investors Key Findings of the Review of Discretionary
Mutual Funds and Direct Offshore Foreign Insurers, review
prepared for the Commonwealth Government, Treasury, Canberra, May
2004, pp. 2 and 3 at http//dmfreview.treasury.gov.au .
[11]. Department of
Treasury, Regulation of Discretionary Mutual Funds and Direct
Offshore Foreign Insurers, discussion paper, December
2005.
[12]. ibid., pp. 4
and 5.
[13]. See Victorian
Government, Submission, p. 1; Medical Indemnity
Protection, Submission, p. 2; APRA, Submission, pp. 1
3.
[14]. See QBE
Insurance Group, Submission; APRA, Submission.
[15]. See National
Insurance Brokers Association, Submission, p. 1.
[16]. The Hon.
Peter Dutton MP, Minister for Revenue, Enhancing the Integrity
of Insurance in Australia, media release, Parliament House,
Canberra, 3 May 2007 at: http//assistant.treasurer.gov.au, accessed
on 25 July 2007.
[18]. APRA,
APRA announcement on foreign insurers and discretionary mutual
funds, media release, 3 May 2007.
[19]. The Senate
Standing Committee on Economics, Financial Sector Legislation
Amendment (Discretionary Mutual Funds and Direct Offshore Foreign
Insurers) Bill 2007 and Corporations (National
Guarantee fund Levies) Amendment Bill 2007, report to
the Senate, 1 August 2007.
[20]. See
Association of Consulting Engineers Australia, Submission,
p. 3.
[21]. See Law
Council of Australia, Submission, p. 2; National Insurance
Brokers Association, Submission, p. 3; Underwriting Agencies
Council, Submission, pp. 2 and 3.
[22]. See Insurance
Council of Australia, Submission, pp. 3 5; National
Insurance Brokers Association, Submission, p. 3.
[23]. The Senate
Standing Committee on Economics, op. cit, p. 11.
[26]. UAC,
Submission, p. 1.
[31]. ACEA,
Submission, p. 2.
[35]. NIBA,
Submission, p. 1.
[40]. Law Council
of Australia, Submission, p. 10.
[46]. Insurance
Council of Australia, Submission, Attachment, p. 1.
[47]. Insurance
Council of Australia, Submission, p. 1.
[49]. Insurance
Council of Australia, Submission, Attachment, p. 3.
[51]. See:
Explanatory Memorandum, para 6.49, p. 78.
[52]. ibid. para
6.55, p. 80.
[53]. ibid. para
6.56, p. 80.
[54]. The Senate
Standing Committee for the Scrutiny of Bills, Alert
Digest, Report to the Senate, No. 8 of 2007, 8 August 2007, p.
17.
[57]. The Senate
Standing Committee for the Scrutiny of Bills, op. cit, pp. 17
18.
[64]. See Sharon
Scully, Corporations (National Guarantee Fund Levies) Amendment
Bill 2007 , Bills
Digest no.31, 2007 08, Parliamentary Library, Canberra, 14
August 2007.
[65]. Chris Pearce,
Parliamentary Secretary to the Treasurer, Second Reading Speech:
Financial Sector Legislation Amendment (Discretionary Mutual Funds
and Direct Offshore foreign Insurers) Bill , House of
Representatives, Debates, 21 June 2007, p. 15 at:
http://parlinfoweb.parl.net.
Sharon Scully
14 August 2007
Law and Bills Digest Section
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