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Federal Court of Australia |
Last Updated: 20 January 2011
FEDERAL COURT OF AUSTRALIA
Munich Reinsurance America Inc, in the matter of Munich Reinsurance America Inc (no 2) [2011] FCA 9
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Citation:
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Munich Reinsurance America Inc, in the matter of Munich Reinsurance America
Inc (no 2) [2011] FCA 9
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Parties:
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File number:
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NSD 823 of 2010
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Judge:
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Date of judgment:
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Legislation:
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Financial System Legislation Amendment (Financial Claims Scheme and
Other Measures) Act 2008 (Cth)
Insurance Act 1973 (Cth) ss 17B, 17C Insurance Takeovers and Acquisitions Act 1991 (Cth) |
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Cases cited:
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HDI-Gerling Australia Insurance Company Pty
Limited (No 2) [2010] FCA 669
In the matter of Reward Insurance Ltd [2004] FCA151 Insurance Act 1973 (Cth) ss 17B, 17C Munich Reinsurance America Inc, in the matter of Munich Reinsurance America Inc [2010] FCA 948 Re Armstrong Jones Life Assurance Limited (1997) 74 FCR 160 Re Insurance Australia Limited [2004] FCA 524; (2004) 139 FCR 450 Re Royal & Sun Alliance Life Assurance Ltd [2000] FCA 1259; (2000) 104 FCR 37 Re Westport Insurance Corporation, in the matter of Westport Corporation (No 2) [2009] FCA 1598; (2009) 181 FCR 530 |
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Date of hearing:
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30 November 2010
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Place:
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Sydney
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Division:
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GENERAL DIVISION
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Category:
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No catchwords
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Number of paragraphs:
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35
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Counsel for the Applicants:
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RS Hollo and S Lawrance
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Solicitor for the Applicants:
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Allens Arthur Robinson
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Counsel for the Australian Prudential Regulation Authority:
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R Claxton
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IN THE FEDERAL COURT OF AUSTRALIA
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IN THE MATTER OF MUNICH REINSURANCE AMERICA INC (ABN 20 000 857 698)
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THE COURT ORDERS THAT:
Date that entry is stamped:
Deputy District Registrar
ANNEXURE A
INSURANCE ACT 1973
(PART III DIVISION 3A)
SCHEME FOR THE TRANSFER OF THE
AUSTRALIAN
INSURANCE BUSINESS OF MUNICH REINSURANCE AMERICA, INC. TO
GREAT LAKES REINSURANCE (UK) PLC (THE SCHEME)
Background
1.1 Definitions
In this Scheme, unless the context requires otherwise:
Actuarial Report means the report dated 6 October 2010 prepared by the Appointed Actuary.
Appointed Actuary means Kaise Stephan.
APRA means the Australian Prudential Regulation Authority.
Business means that part of the insurance business carried on by MRAm in Australia, within the meaning of the Insurance Act, that involves issuing, undertaking and discharging liabilities under the Insurance Contracts.
Business Assets means certain assets more particularly described in the Transfer Agreement which are used by MRAm for the purposes of conducting the Business and includes contracts with managing general agents, Business Records, reinsurance contracts and any recoveries under those reinsurances.
Business Records means all books of account, accounts, records and data and all other documents relating solely to the Business and the Business Assets other than any records or documents relating to the Business which MRAm is required by law, or by a binding obligation to a third party, to retain.
Claim means, in relation to any person, a claim, action, proceeding, judgment, damage, loss, cost, expense or liability incurred by or made against the person, however arising and whether present, future or contingent, whether ascertained or unascertained and whether arising before or after the Effective Date.
Effective Date means 1 December 2010 or such other date agreed between the parties and approved by the Federal Court.
Excluded Liabilities means:
(a) any contracts of reinsurance to be transferred pursuant to the Reinsurance Scheme; and
(b) any taxes for which MRAm is liable.
Insurance Act means the Insurance Act 1973 (Cth).
Insurance Contracts means all contracts of insurance issued or entered into by MRAm as insurer in Australia prior to the Effective Date in the conduct of its Business. For the avoidance of doubt this includes all contracts of insurance written by MRAm in Australia, except to the extent that MRAm considers those contracts to be contracts of reinsurance, being contracts which are specified in the Business Records to be contracts of reinsurance and which are to be transferred to Münchener Rückversicherungs-Gesellschaft pursuant to the Reinsurance Scheme.
Insurance Liabilities means claims, losses, liabilities, costs or expenses of any kind arising in relation to the Insurance Contracts, including those which are prospective or contingent and those the amount of which is not ascertained or ascertainable and includes any insurance liability described in Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation made under the Insurance Act, but does not include the Excluded Liabilities.
Reinsurance Scheme means the scheme for the transfer of the Australian reinsurance business of MRAm to the Australian branch of Münchener Rückversicherungs-Gesellschaft pursuant to Division 3A of Part III of the Insurance Act 1973 (Cth).
Transfer Agreement means the Transfer Agreement dated 25 October 2010 between MRAm and GLA.
Transfer Amount means the amount of $26,900,000 reduced by an amount certified by the Appointed Actuary to reflect the amount of claims paid by MRAm in respect of the Insurance Contracts between 31 December 2009 and the Effective Date.
1.2 Interpretation
Headings are for convenience only and do not affect interpretation. The following rules apply in this Scheme unless the context requires otherwise.
(a) The singular includes the plural and conversely.
(b) If a word or phrase is defined, its other grammatical forms have a corresponding meaning.
(c) A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.
(d) A reference to a clause or schedule is a reference to a clause of or a schedule to, this Scheme.
(e) A reference to an agreement or document (including, without limitation, a reference to this Scheme document) is to the agreement or document as amended, varied, supplemented, novated or replaced except to the extent prohibited by this Scheme or that other agreement or document.
(f) A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it.
(g) includes, including and similar expressions are not intended to operate as words of limitation or imply any limitation.
(h) A reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form.
(i) A reference to time is to Sydney time.
1.3 References to GLA and MRAm
A reference to GLA in this Scheme shall be taken as a reference to Great Lakes Reinsurance (UK) plc acting through its Australian Branch and a reference to MRAm in this Scheme shall be taken as a reference to Munich Reinsurance America, Inc. acting through its Australian Branch.
On the Effective Date, MRAm transfers to GLA the Business and, in particular, the Insurance Contracts, Insurance Liabilities and Business Assets and such transfer includes all right, title, interest, benefit and powers that have arisen, or may in the future arise and any liabilities that have, or may in the future arise, in respect of the Insurance Contracts, Insurance Liabilities or Business Assets, including as against any policyholder or third party arising under or by virtue of any Insurance Contract, including but not limited to any claims by way of subrogation, contribution, outstanding premium and any other recoveries related directly or indirectly to any Insurance Contracts, in accordance with the terms of the Transfer Agreement.
(a) In consideration of GLA's assumption of the Insurance Liabilities, MRAm agrees to pay GLA the Transfer Amount.
(b) In consideration for the transfer of the Business Assets, GLA agrees to pay MRAm $1.
On and from the Effective Date:
(a) MRAm transfers to GLA and GLA accepts and assumes responsibility for all Insurance Liabilities in connection with the Business; and
(b) GLA assumes and takes over and shall indemnify and keep MRAm indemnified from and against all Claims under or in connection with the Insurance Contracts.
On and from the Effective Date:
(a) GLA is beneficially entitled to the benefit of the Business Assets and assumes responsibility for the Business Assets; and
(b) GLA shall indemnify and keep MRAm indemnified from and against all Claims under or in connection with the Business Assets in accordance with the terms of the Transfer Agreement.
If any proceedings are pending or any proceedings are brought on or after the Effective Date by or against MRAm in any court or tribunal in respect of the Insurance Contracts, such proceedings will be continued by or against MRAm for and on behalf of GLA and any judgment or determination for or against MRAm in any such proceedings will have effect as between MRAm and GLA as if such judgment or determination had been made for or against GLA and GLA will indemnify and keep indemnified MRAm in accordance with the terms of the Transfer Agreement.
The transfer of the Business and Business Assets from MRAm to GLA, and the assumption of the Insurance Contracts by GLA, pursuant to this Scheme take effect on and from the Effective Date such that GLA will be entitled to all benefits and rights in respect of the Insurance Contracts, and will assume all of the obligations in respect of the Insurance Contracts as at, from and including the Effective Date.
MRAm and GLA will each do all acts and things and execute all documents necessary or desirable to give effect to the provisions of the Transfer Agreement and this Scheme and the transactions contemplated by them.
Each party will bear all its own costs and expenses of and incidental to the preparation and confirmation of this Scheme and its implementation.
GLA will comply with applicable Prudential Standards of APRA after the Effective Date insofar as is relevant to the Business.
(a) The Scheme will not change the terms of any Insurance Contract, or affect any Claim in respect of any Insurance Contract, other than that GLA will become the insurer in place of MRAm.
(b) Policyholders will continue to have the same rights and obligations under or in respect of any Insurance Contract or Claim but with GLA as the insurer. The Scheme and Transfer Agreement will also reflect the change in insurer as follows:
(i) all outstanding Claims-related rights and liabilities of MRAm in respect of the Insurance Contracts will be transferred to GLA such that any Claims arising under or in connection with any Insurance Contract must be made against GLA;
(ii) all premiums and other amounts payable to or recoverable by MRAm under the Insurance Contracts will be payable to and recoverable by GLA instead of MRAm;
(iii) GLA will be entitled to enforce all rights and remedies which but for the Scheme would have been enforceable by MRAm under or in respect of the Insurance Contracts; and
(iv) any policyholder under an Insurance Contract or other person who has a Claim on or obligation to MRAm under or in respect of an Insurance Contract will have the same Claim on or obligation to GLA in substitution for his or her Claim on or obligation to MRAm irrespective of when such Claim or obligation arose.
(c) Policyholders are not required to take any action before or as a result of the Scheme.
(d) In the event of any inconsistency between the summary set out in this clause 11 and any other provision of this Scheme or the Transfer Agreement, the other provision shall prevail to the extent of the inconsistency.
ANNEXURE B
INSURANCE ACT 1973
(PART III DIVISION 3A)
SCHEME FOR THE TRANSFER OF THE
AUSTRALIAN
REINSURANCE BUSINESS OF MUNICH REINSURANCE AMERICA, INC. TO
MüNCHENER RüCKVERSICHERUNGS-GESELLSCHAFT (THE SCHEME)
Background
1.1 Definitions
In this Scheme, unless the context requires otherwise:
Actuarial Report means the report dated 6 October 2010 prepared by the Appointed Actuary.
Appointed Actuary means Kaise Stephan.
APRA means the Australian Prudential Regulation Authority.
Business means that part of the insurance business carried on by MRAm in Australia, within the meaning of the Insurance Act, that involves issuing, undertaking and discharging liabilities under the Reinsurance Contracts.
Business Records means all books of account, accounts, records and data and all other documents relating solely to the Business, other than any records or documents relating to the Business which MRAm is required by law, or by a binding obligation to a third party, to retain.
Claim means, in relation to any person, a claim, action, proceeding, judgment, damage, loss, cost, expense or liability incurred by or made against the person, however arising and whether present, future or contingent, whether ascertained or unascertained and whether arising before or after the Effective Date.
Effective Date means 1 December 2010 or such other date agreed between the parties and approved by the Federal Court.
Excluded Liabilities means:
(a) any contracts of insurance which are not classified in the Business Records as contracts of reinsurance and which are to be transferred pursuant to the Insurance Scheme; and
(b) any taxes for which MRAm is liable.
Insurance Act means the Insurance Act 1973 (Cth).
Insurance Scheme means the scheme for the transfer of the Australian insurance business of MRAm to the Australian branch of Great Lakes Reinsurance (UK) plc pursuant to Division 3A of Part III of the Insurance Act 1973 (Cth).
Reinsurance Contracts means all contracts of reinsurance issued, entered into or assumed by MRAm as reinsurer in Australia prior to the Effective Date in the conduct of its Business, being those contracts which are designated as contracts of reinsurance in the Business Records, and includes those contracts of reinsurance that relate in whole or in part to liabilities or risks outside Australia but which are in fact Australian reinsurance liabilities.
Reinsurance Liabilities means claims, losses, liabilities, costs or expenses of any kind arising in relation to the Reinsurance Contracts, including those which are prospective or contingent and those the amount of which is not ascertained or ascertainable, and includes any insurance liability described in Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation made under the Insurance Act, but does not include the Excluded Liabilities.
Transfer Agreement means the Transfer Agreement dated 25 October 2010 between MRAm and MRAU.
Transfer Amount means the amount of $33,050,000 reduced by an amount certified by the Appointed Actuary to reflect the amount of claims paid by MRAm in respect of the Reinsurance Contracts between 31 December 2009 and the Effective Date.
1.2 Interpretation
Headings are for convenience only and do not affect interpretation. The following rules apply in this Scheme unless the context requires otherwise.
(a) The singular includes the plural and conversely.
(b) If a word or phrase is defined, its other grammatical forms have a corresponding meaning.
(c) A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.
(d) A reference to a clause or schedule is a reference to a clause of or a schedule to, this Scheme.
(e) A reference to an agreement or document (including, without limitation, a reference to this Scheme document) is to the agreement or document as amended, varied, supplemented, novated or replaced except to the extent prohibited by this Scheme or that other agreement or document.
(f) A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it.
(g) includes, including and similar expressions are not intended to operate as words of limitation or imply any limitation.
(h) A reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form.
(i) A reference to time is to Sydney time.
1.3 References to MRAU and MRAm
A reference to MRAU in this Scheme shall be taken as a reference to Münchener Rückversicherungs-Gesellschaft acting through its Australian Branch and a reference to MRAm in this Scheme shall be taken as a reference to Munich Reinsurance America, Inc. acting through its Australian Branch.
On the Effective Date, MRAm transfers to MRAU the Business and, in particular, the Reinsurance Contracts, Reinsurance Liabilities and Business Records and such transfer includes all right, title, interest, benefit and powers that have arisen, or may in the future arise and any liabilities that have, or may in the future arise, in respect of the Reinsurance Contracts, Reinsurance Liabilities or Business Records, including as against any reinsured or third party arising under or by virtue of any Reinsurance Contract, including but not limited to any claims by way of subrogation, contribution, outstanding premium and any other recoveries related directly or indirectly to any Reinsurance Contracts, in accordance with the terms of the Transfer Agreement.
In consideration of MRAU's assumption of the Business, MRAm agrees to pay MRAU the Transfer Amount.
On and from the Effective Date:
MRAm transfers to MRAU and MRAU accepts and assumes responsibility for all Reinsurance Liabilities in connection with the Business; and
MRAU assumes and takes over and shall indemnify and keep MRAm indemnified from and against all Claims under or in connection with the Reinsurance Contracts.
If any proceedings are pending or any proceedings are brought on or after the Effective Date by or against MRAm in any court or tribunal in respect of the Reinsurance Contracts, such proceedings will be continued by or against MRAm for and on behalf of MRAU and any judgment or determination for or against MRAm in any such proceedings will have effect as between MRAm and MRAU as if such judgment or determination had been made for or against MRAU and MRAU will indemnify and keep indemnified MRAm in accordance with the terms of the Transfer Agreement.
The transfer of the Business and Business Records from MRAm to MRAU, and the assumption of the Reinsurance Contracts by MRAU, pursuant to this Scheme take effect on and from the Effective Date such that MRAU will be entitled to all benefits and rights in respect of the Reinsurance Contracts, and will assume all of the obligations in respect of the Reinsurance Contracts as at, from and including the Effective Date.
MRAm and MRAU will each do all acts and things and execute all documents necessary or desirable to give effect to the provisions of the Transfer Agreement and this Scheme and the transactions contemplated by them.
Each party will bear its own costs and expenses of and incidental to the preparation and confirmation of this Scheme and its implementation.
MRAU will comply with applicable Prudential Standards of APRA after the Effective Date insofar as is relevant to the Business.
(a) The Scheme will not change the terms of any Reinsurance Contract, or affect any Claim in respect of any Reinsurance Contract, other than that MRAU will become the reinsurer in place of MRAm.
(b) Policyholders will continue to have the same rights and obligations under or in respect of any Reinsurance Contract or Claim but with MRAU as the reinsurer. The Scheme and Transfer Agreement will also reflect the change in reinsurer as follows:
(i) all outstanding Claims-related rights and liabilities of MRAm in respect of the Reinsurance Contracts will be transferred to MRAU such that any Claims arising under or in connection with any Reinsurance Contract must be made against MRAU;
(ii) all premiums and other amounts payable to or recoverable by MRAm under the Reinsurance Contracts will be payable to and recoverable by MRAU instead of MRAm;
(iii) MRAU will be entitled to enforce all rights and remedies which but for the Scheme would have been enforceable by MRAm under or in respect of the Reinsurance Contracts; and
(iv) any policyholder under a Reinsurance Contract or other person who has a Claim on or obligation to MRAm under or in respect of a Reinsurance Contract will have the same Claim on or obligation to MRAU in substitution for his or her Claim on or obligation to MRAm irrespective of when such Claim or obligation arose.
(c) Policyholders are not required to take any action before or as a result of the Scheme.
(d) In the event of any inconsistency between the summary set out in this clause 10 and any other provision of this Scheme or the Transfer Agreement, the other provision shall prevail to the extent of the inconsistency.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
The text of entered orders can be located using Federal Law
Search on the Court’s website.
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NEW SOUTH WALES DISTRICT
REGISTRY
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IN THE MATTER OF MUNICH REINSURANCE AMERICA INC (ABN 20 000 857 698)
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REASONS FOR JUDGMENT
6 Munich Holdings of Australasia Pty Limited (MHA) is a sister company to MRAm. The substantive application is by MRAm for confirmation of the scheme to transfer its direct insurance business to the Australian branch of Great Lakes and the scheme to transfer its reinsurance business to the Australian branch of Munich Re. Munich Re has been registered in Australia as a foreign corporation since 11 June 1956 and has been authorised to carry on insurance business in Australia under the Act through a local branch. Since being authorised under the Act, Munich Re has had a mandate from the Munich Re Group to write non-life insurance business in Australia.
7 Great Lakes is incorporated in the United Kingdom and is regulated as a general insurer by the United Kingdom Financial Services Authority. It is a wholly owned subsidiary within the Munich Re Group. Great Lakes is registered in Australia as a foreign corporation and has been authorised to carry on insurance business in Australia under the Act through a local branch since 31 October 2007. Great Lakes has a mandate from the Munich Re Group to write only non-life direct insurance business.
8 MRAm is incorporated in the United States and is also a wholly owned subsidiary within the Munich Re Group. MRAm is registered in Australia as a foreign corporation and has been authorised to carry on insurance business in Australia through a local branch operation since December 1970.
9 MHA is also incorporated in Australia and is a wholly owned subsidiary within the Munich Re Group. MHA is the employer of all Australian staff of the Munich Re Group and is also the agent in Australia for both Munich Re and MRAm.
10 MRAm began writing direct insurance business in Australia in the late 1990s. Its business went into run-off in July 2002 with a limited exemption to write only direct insurance up until February 2003. Prior to commencing run-off, MRAm wrote a variety of traditional reinsurance business in Australia. Its reinsurance business was conducted directly with insurance companies and was administered through MRAm itself. All of MRAm’s Australian reinsurance business conducted since the establishment of APRA in 1998 has been conducted with APRA regulated insurers.
11 Between 1993 and commencing run-off, MRAm wrote a variety of direct insurance business in Australia. Between 1993 and 2000, the business written was predominantly long-term business, including a significant proportion of professional liability business such as medical, legal and architects’ professional indemnity. The term short-tail business is used to refer to the expectation that there is little likelihood of any claim arising either because policies have expired or time limits within which to bring a claim have passed.
12 The Munich Re Group describes its direct insurance business as program business, being insurance business written for specific types of risks. The underwriting, claims handling and administrative functions of the program business were outsourced to managing general agents (General agents). Between 2000 and the commencement of run-off, a mix of professional liability and public liability business was continued to be written. Under the arrangements between MRAm and the General agents, the General agents had delegated authority to administer the business and were responsible for all of the administration associated with such business, including maintaining policyholder lists and address details. In view of those arrangements, MRAm did not establish systems for the recording and maintaining of comprehensive lists of policyholders.
13 MRAm also wrote a small proportion of reinsurance business that included both Australian and New Zealand risks. The New Zealand risks have always been treated by MRAm as New Zealand business and included in its regulatory returns. That business is to be transferred to the New Zealand branch of Munich Re by way of a scheme in respect of which approval will be sought from the High Court of New Zealand. There may be an argument that the liabilities of that business may be liabilities of the Australian business. Accordingly, MRAm intends to provide a copy of the proposed reinsurance scheme summary to all such New Zealand policyholders and to include those policies in the reinsurance scheme.
14 The proposed schemes are part of an intricate restructure by the Munich Re Group to rationalise the number of business entities that are operating and regulated in Australia in order to improve capital efficiency and support for the Australian operations. The estimated value of the liabilities of the insurance and reinsurance business to be transferred is approximately $60,000,000, consisting of approximately $26,000,000 for the direct insurance business, and approximately $34,000,000, for the reinsurance business. The proposed schemes will not involve any change in the terms or conditions of the policies being transferred, other than the name of the insurer or reinsurer.
Statutory framework
(1) No part of the insurance business of a general insurer may be:
(a) transferred to another general insurer; or
(b) amalgamated with the business of another general insurer;
except under a scheme confirmed by the Federal Court.
(2) ...
(3) A scheme must set out:
(a) the terms of the agreement or deed under which the proposed transfer or amalgamation is carried out; and
(b) particulars of any other arrangements necessary to give effect to the scheme.
The main object of this Act is to protect the interests of policyholders and prospective policyholders and prospective policy holders under insurance policies (issued by general insurers and Lloyd’s underwriters) in ways that are consistent with the continued development of a viable, competitive and innovative insurance industry.
encompasses the interests of the holders of policies issued otherwise than as part of the business of an Australian branch. In other words, must the Court have regard to the interests of the holders of policies issued in any of its branches anywhere in the world by a foreign general insurer that is affected by the scheme?
Evidence
(a) The Direct Insurance Scheme;
(b) The Reinsurance Scheme;
(c) The Transfer Agreement between MRAm and Great Lakes in respect of the direct insurance business (Direct Insurance Transfer Agreement);
(d) the Transfer Agreement between MRAm and Munich Re in respect of the reinsurance business (Reinsurance Transfer Agreement);
(e) the Actuarial Report on Scheme of Transfer prepared by Mr Kaise Stephan on the Direct Insurance Scheme (Direct Insurance Actuarial Report);
(f) the Actuarial Report on Scheme of Transfer prepared by Mr Kaise Stephan on the Reinsurance Scheme (Reinsurance Actuarial Report);
(g) the independent peer review of Direct Insurance Actuarial Report by Ms Melissa Siew-Mei Yan; and
(h) the independent peer review of the Reinsurance Actuarial Report by Mr Jefferson Robert Gibbs.
Direct Insurance Scheme
(a) the Scheme is confirmed by the Federal Court of Australia;
(b) the Treasurer of the Commonwealth of Australia (or APRA acting under its delegated authority) has approved, or otherwise confirmed that it has no objection to the acquisition by [Great Lakes] of the Business under section 41 of the Insurance Acquisitions and Takeovers Act 1991 (Cth) (IAT Act); and
(c) the regulator of [Great Lakes] in the United Kingdom is notified of the transfer of the Business from MRAm to [Great Lakes].
The Actuarial Reports in relation to the Direct Insurance Scheme
In summary, and for the reasons set out in my report, having carried out my review of Mr Stephan’s report, sighting the 30 September 2010 APRA returns ... and reviewing MR Stephan’s affidavit, nothing has come to my attention that would lead me to believe that the conclusions reached by Mr Stephan in his report are unreasonable.
I have made all the enquiries that I believe are desirable and appropriate and no matters of significance that I regard as relevant have, to my knowledge, been withheld from the Court.
Based on the materials presented to me to the date of my report, I am not aware of any other matter or circumstance that would cause me to change the opinion or belief expressed ... above.
The Reinsurance Scheme
The amount of $33,050,000 reduced by an amount certified by the Appointed Actuary to reflect the amount of claims paid by MRAm in respect of the Reinsurance Contracts between 31 December 2009 and the Effective Date.
Actuarial Reports in relation to the Reinsurance Scheme
[N]othing has come to my attention that would lead me to believe that the conclusions reached by Mr Stephan in his report are unreasonable.
I have made all the enquiries that I believe are desirable and appropriate and no matters of significance that I regard as relevant have, to my knowledge, been withheld from the Court.
Based on the materials presented to me to the date of my report, I am not aware of any other matter or circumstance that would cause me to change the opinion or belief expressed ... above.
Procedural requirements
(a) A copy of the scheme and any actuarial report on which it is based must have been given to APRA in accordance with the prudential standards – s 17C(2)(a);
(b) Notice of intention to make an application for confirmation of a scheme must be published in accordance with prudential standards and must contain details of the place and time at which an affected policyholder may obtain a copy of the scheme – s 17C(2)(b) and (3).
(c) APRA may arrange for an independent actuary to make a written report on the Scheme and may give a copy of the report to each body corporate affected by it - s 17D;
(d) Any of the bodies corporate affected by the scheme may apply to the Court for confirmation - s 17E(1); and
(e) An application for confirmation must be made in accordance with the prudential standards and APRA is entitled to be heard on the application - s 17E(2) and (3).
(a) a copy of the Scheme and any actuarial reports on which the Scheme is based must be provided to APRA (paras 4-6);
(b) a Notice of Intention to make application for confirmation of the Scheme must be published in a form approved by APRA and in newspapers approved by APRA (paras 7-11);
(c) APRA must approve a summary of the Scheme, which summary must be sent to affected policyholders before the Scheme is released for public inspection (paras 12-15);
(d) a copy of the Scheme must be open for public inspection at least 15 days (not including weekends and public holidays) in each State and Territory in which an affected policyholder resides (para 16); and
(e) an application to the Court for confirmation may be made no earlier than the expiry of the period of inspection provided for in paragraph 16 of GPS 410 or 15 days after the approved summary of the Scheme has been given to every affected policyholder under that paragraph (whichever is the later) (para 17).
APRA’s position
APRA has been involved in the preparation of the scheme documents in terms of reviewing the documents, ensuring that all the appropriate reviews have been undertaken both by the peer review actuaries and also within APRA, we have a capacity to review actuarial reports. We’re satisfied, as much as we can be, with the conclusions that have been drawn in the reports and the analysis. We’re also satisfied that the disclosure requirements have been met in this instance and we’re satisfied with the post transfer capital position of the two transferee companies, and on that basis we have no objection to the court ordering confirmation of the scheme.
Conclusion
Dated: 18 January 2011
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