2008-2009 The Parliament of the Commonwealth of Australia HOUSE OF REPRESENTATIVES Presented and read a first time Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 (Treasury) A Bill for an Act to amend the law relating to banking, insurance and superannuation, and for related purposes [Page Break] 1 Short title ............................................................................................ 1 2 Commencement .................................................................................. 1 3 Schedule(s) ......................................................................................... 2 Schedule 1--Non-operating holding companies of life insurers 3 Part 1--Main amendments 3 Life Insurance Act 1995 3 Part 2--Consequential amendments 31 Australian Prudential Regulation Authority Act 1998 31 Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998 31 Corporations Act 2001 32 Financial Institutions Supervisory Levies Collection Act 1998 33 Financial Sector (Business Transfer and Group Restructure) Act 1999 33 Financial Sector (Collection of Data) Act 2001 33 Financial Sector (Shareholdings) Act 1998 33 First Home Saver Accounts Act 2008 33 Income Tax Assessment Act 1936 34 Income Tax Assessment Act 1997 34 Insurance Acquisitions and Takeovers Act 1991 34 Insurance Act 1973 35 Life Insurance Supervisory Levy Imposition Act 1998 35 Pooled Development Funds Act 1992 35 Retirement Savings Accounts Act 1997 35 Social Security Act 1991 35 Superannuation Industry (Supervision) Act 1993 35 Superannuation (Unclaimed Money and Lost Members) Act 1999 36 Veterans' Entitlements Act 1986 36 Schedule 2--Injunctions 37 Part 1--Banking Act 1959 37 Part 2--Insurance Act 1973 38 i Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Part 4--Superannuation Industry (Supervision) Act 1993 44 Part 5--First Home Saver Accounts Act 2008 45 Part 6--Application 46 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 ii [Page Break] 2 banking, insurance and superannuation, and for 3 related purposes 4 The Parliament of Australia enacts: 5 1 Short title 6 This Act may be cited as the Financial Sector Legislation 7 Amendment (Enhancing Supervision and Enforcement) Act 2009. 8 2 Commence ment 9 (1) Each provision of this Act specified in column 1 of the table 10 commences, or is taken to have commenced, in accordance with 11 column 2 of the table. Any other statement in column 2 has effect 12 according to its terms. 13 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 1 [Page Break] Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 The day on which this Act receives the and anything in Royal Assent. this Act not elsewhere covered by this table 2. Schedule 1 A single day to be fixed by Proclamat ion. However, if any of the provision(s) do not commence with in the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. 3. Schedule 2 The day after this Act receives the Royal Assent. 1 Note: This table relates only to the provisions of this Act as originally 2 passed by both Houses of the Parliament and assented to. It will not be 3 expanded to deal with provisions inserted in this Act after assent. 4 (2) Column 3 of the table contains additional information that is not 5 part of this Act. Information in this column may be added to or 6 edited in any published version of this Act. 7 3 Schedule(s) 8 Each Act that is specified in a Schedule to this Act is amended or 9 repealed as set out in the applicable items in the Schedule 10 concerned, and any other item in a Schedule to this Act has effect 11 according to its terms. 12 2 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 2 Schedule 1--Non-operating holding 3 companies of life insurers 4 Part 1--Main amendments 5 Life Insurance Act 1995 6 1 Section 4 7 Before "Without", insert "(1)". 8 2 Section 4 9 Omit "section", substitute "subsection". 10 3 At the end of section 4 11 Add: 12 (2) Without prejudice to its effect apart from this subsection, this Act 13 also has the effect it would have if each reference to a subsidiary of 14 a life company were, by express provision, confined to such a 15 subsidiary that: 16 (a) is a corporation to which paragraph 51(xx) of the 17 Constitution applies; or 18 (b) carries on banking with respect to which the Parliament has 19 the power to make laws under paragraph 51(xiii) of the 20 Constitution. 21 (3) Without prejudice to its effect apart from this subsection, this Act 22 also has the effect it would have if each reference to a subsidiary of 23 a registered NOHC were, by express provision, confined to such a 24 subsidiary that: 25 (a) is a corporation to which paragraph 51(xx) of the 26 Constitution applies; or 27 (b) carries on banking with respect to which the Parliament has 28 the power to make laws under paragraph 51(xiii) of the 29 Constitution. 30 4 Paragraphs 12A(4)(e) and 12B(5)(e) 31 Omit "this Act" (wherever occurring), substitute "section 21". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 3 [Page Break] Part 1 Main amendments 1 5 Paragraphs 16(a) and (b) 2 Omit "company", substitute "body corporate". 3 Note: The heading to section 16 is altered by omitting "companies" and substituting "bodies 4 corporate". 5 6 Paragraph 16ZD(1)(d) 6 Omit "this Act", substitute "section 21". 7 7 Part 3 (heading) 8 Repeal the heading, substitute: 9 Part 3--Registration of life companies and their 10 NOHCs 11 Division 1--Registration of life companies 12 8 Subsection 17(1) 13 Omit "this Act", substitute "section 21". 14 9 Paragraph 17(2)(a) 15 Omit "this Act", substitute "section 21". 16 10 Subsection 17(4) 17 Omit "this Act", substitute "section 21". 18 11 Subsection 20(1) 19 Omit "this Act", substitute "section 21". 20 12 Paragraph 21(3)(f) 21 Omit "Act", substitute "section". 22 13 At the end of subsection 21(3) 23 Add: 24 ; (h) that the company is a subsidiary of a NOHC that is not a 25 registered NOHC. 26 14 Application 4 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 The amendments of section 21 of the Life Insurance Act 1995 made by 2 this Part apply in relation to applications made before, on or after the 3 commencement of the amendments for registration. 4 15 After subsection 22(1) 5 Insert: 6 (1A) Without limiting the conditions that APRA may impose on the 7 registration, APRA may make the registration conditional on a 8 body corporate, of which the company is a subsidiary, being a 9 registered NOHC. 10 16 Application 11 Subsection 22(1A) of the Life Insurance Act 1995 (as amended by this 12 Part) applies in relation to a registration made before, on or after the 13 commencement of that subsection. 14 17 Paragraph 26(1)(a) 15 Omit "this Act", substitute "section 21". 16 18 Subsection 26(2) 17 Omit "the registration of the company under this Act", substitute 18 "(under this section) the registration under section 21 of the company". 19 19 Paragraph 27(1)(a) 20 Omit "this Act", substitute "section 21". 21 20 Subsection 27(1) 22 Omit "the registration of the company under this Act", substitute 23 "(under this section) the registration under section 21 of the company". 24 21 At the end of Part 3 25 Add: 26 Division 2--Registration of NOHCs of life companies 27 28A Registration as a NOHC 28 (1) A body corporate may apply in writing to APRA for registration 29 under this section (the NOHC registration). The NOHC Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 5 [Page Break] Part 1 Main amendments 1 registration operates in relation to the body corporate and any life 2 companies that are subsidiaries of the body corporate from time to 3 time. 4 Note: The body corporate may want the registration because APRA may 5 refuse to register a subsidiary of the body corporate under Division 1 6 unless the body corporate is registered under this section (see 7 subsection 21(3)). 8 (2) APRA may require the body corporate to provide a statutory 9 declaration in relation to information or documents provided in 10 relation to the application. 11 (3) APRA may register an applicant if it considers it is appropriate to 12 do so. The registration must be in writing. 13 (4) If APRA registers an applicant, APRA must give written notice to 14 the applicant. 15 (5) The taking of an action is not invalid merely because of a failure to 16 comply with subsection (4). 17 28B Conditions on a NOHC registration 18 (1) APRA may, at any time, by giving written notice to a registered 19 NOHC: 20 (a) impose conditions, or additional conditions, on the NOHC 21 registration; and 22 (b) vary or revoke conditions imposed on the NOHC registration. 23 (2) A condition may be expressed to have effect despite anything in 24 the prudential standards. 25 (3) If APRA imposes, varies or revokes the conditions on a NOHC 26 registration, APRA must give written notice to the registered 27 NOHC. 28 (4) The taking of an action is not invalid merely because of a failure to 29 comply with subsection (3). 30 28C When APRA may revoke a NOHC registration 31 (1) APRA may revoke a NOHC registration if APRA is satisfied that: 32 (a) the registered NOHC has failed to comply with: 6 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 (i) a requirement of this Act or of an instrument made for 2 the purposes of this Act; or 3 (ii) a requirement of the Financial Sector (Collection of 4 Data) Act 2001; or 5 (iii) a direction to the registered NOHC under this Act; or 6 (iv) a condition of the registration; or 7 (b) it would be contrary to the public interest for the registration 8 to remain in force; or 9 (c) the registered NOHC has failed to pay: 10 (i) an amount of levy or late penalty to which the Financial 11 Institutions Supervisory Levies Collection Act 1998 12 applies; or 13 (ii) an amount of charge fixed under section 51 of the 14 Australian Prudential Regulation Authority Act 1998; or 15 (d) it would be contrary to the interests of the policy owners of 16 any life company that is a subsidiary of the registered NOHC 17 for the registration to remain in force; or 18 (e) the registered NOHC has ceased to be a NOHC of any life 19 company. 20 (2) Before revoking a NOHC registration, APRA must give written 21 notice to the registered NOHC advising it that: 22 (a) APRA is considering revoking the registration for the reasons 23 specified; and 24 (b) the registered NOHC may make submissions about the 25 revocation to APRA, in accordance with the notice, by a 26 specified date (which must be at least 90 days after the notice 27 is given). 28 APRA must consider any submissions made by the registered 29 NOHC by that date. 30 (3) APRA may decide that subsection (2) does not apply if APRA is 31 satisfied that complying with that subsection could result in a delay 32 in revocation that would be: 33 (a) contrary to the public interest; or 34 (b) contrary to the interests of the policy owners of any life 35 company that is a subsidiary of the registered NOHC 36 concerned. 37 (4) If APRA revokes a body corporate's NOHC registration, APRA 38 must give written notice to the body corporate. Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 7 [Page Break] Part 1 Main amendments 1 (5) Revocation under this section of the registration of a body 2 corporate takes effect at the end of 7 days after APRA gives the 3 body written notice of the revocation. 4 28D When APRA must revoke a NOHC registration 5 (1) APRA must revoke a body corporate's NOHC registration if: 6 (a) the body corporate asks (in writing) APRA to do so; and 7 (b) APRA is satisfied that revoking the registration would not be 8 contrary to either: 9 (i) the public interest; or 10 (ii) the interests of the policy owners of any life company 11 that is a subsidiary of the body corporate. 12 (2) If APRA revokes a body corporate's NOHC registration, APRA 13 must give written notice to the body. 14 (3) Revocation under this section of the registration of a body 15 corporate takes effect when APRA gives the body written notice of 16 the revocation. 17 22 Part 6 (heading) 18 Repeal the heading, substitute: 19 Part 6--Financial management of life companies 20 etc. 21 23 Subsection 88(1) 22 Omit "a life company", substitute "a body corporate that is a life 23 company, registered NOHC or subsidiary of a life company or 24 registered NOHC". 25 Note: The heading to section 88 is replaced by the heading "Obligations of auditors of 26 certain bodies to report to bodies and APRA". 27 24 Subsection 88(1) 28 Omit "of the company" (wherever occurring), substitute "of the body". 29 25 Subsection 88(1) 30 Omit "taken by the company", substitute "taken by the body". 8 Financial Sector Legislation Amendment (Enhancing Supervision and Enforc ement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 26 Paragraph 88(1)(b) 2 Omit "company", substitute "body, if it is a life company, or by a life 3 company that is related to the body". 4 27 Subsection 88(2) 5 Omit "a life company", substitute "a body corporate that is a life 6 company, registered NOHC or subsidiary of a life company or 7 registered NOHC". 8 28 Paragraph 88(2)(a) 9 Omit "the company" (wherever occurring), substitute "the body". 10 29 Paragraph 88(2)(b) 11 Omit "company", substitute "body, if it is a life company, or by a life 12 company that is related to the body". 13 30 Subsection 88(2A) 14 Omit "a life company", substitute "a body corporate that is a life 15 company, registered NOHC or subsidiary of a life company or 16 registered NOHC". 17 31 Paragraph 88(2A)(a) 18 Omit "life company" (wherever occurring), substitute "body". 19 32 Paragraph 88(2B)(a) 20 Omit "a life company", substitute "a body corporate that is a life 21 company, registered NOHC or subsidiary of a life company or 22 registered NOHC". 23 33 Subparagraph 88(2B)(b)(i) 24 Omit "life company" (wherever occurring), substitute "body". 25 34 Subparagraph 88(2B)(b)(ii) 26 Omit "company", substitute "body, if it is a life company, or by a life 27 company that is related to the body". 28 35 Paragraphs 88(2B)(c) and (d) 29 Omit "life company" (wherever occurring), substitute "body". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 9 [Page Break] Part 1 Main amendments 1 36 Paragraph 88(3)(a) 2 Omit "a life company", substitute "a body corporate that is a life 3 company, registered NOHC or subsidiary of a life company or 4 registered NOHC". 5 37 Paragraph 88(3)(a) 6 Omit "of the company" (wherever occurring), substitute "of the body". 7 38 Paragraph 88(3)(a) 8 Omit "taken by the company", substitute "taken by the body". 9 39 Subparagraph 88(3)(a)(ii) 10 Omit "company", substitute "body, if it is a life company, or by a life 11 company that is related to the body". 12 40 Paragraph 88(4)(b) 13 Omit "life company", substitute "body". 14 41 Subsection 88(4) 15 Omit "company" (last occurring), substitute "body". 16 42 Subsection 88A(1) 17 Omit "a life company", substitute "a body corporate that is or was a life 18 company, a registered NOHC or a subsidiary of a life company or 19 registered NOHC". 20 43 Subsection 88A(1) 21 Omit "the life company", substitute "the body". 22 44 Subsection 89(1) 23 Omit "a life company", substitute "a body corporate that is or was a life 24 company, a registered NOHC or a subsidiary of a life company or 25 registered NOHC". 26 45 Paragraph 89(2)(b) 27 Omit "life company", substitute "body". 28 46 Subsection 125A(1) 10 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 Omit "life company", substitute "body corporate that is a life company 2 or a registered NOHC". 3 47 Paragraph 125A(1)(a) 4 Omit "company", substitute "body". 5 48 Paragraph 125A(1)(b) 6 Omit "company", substitute "body, if it is a life company". 7 49 Subparagraph 125A(2)(a)(i) 8 Omit "company", substitute "body". 9 50 Subsections 125A(3), (7) and (9) 10 Omit "life company" (wherever occurring), substitute "body corporate". 11 51 Part 7 (heading) 12 Repeal the heading, substitute: 13 Part 7--Monitoring and investigation of life 14 companies and registered NOHCs 15 52 Subsection 126(1) (definition of officer) 16 Omit "a company", substitute "a body corporate". 17 53 Subsection 126(1) (paragraph (a) of the definition of 18 officer) 19 Omit "company" (first occurring), substitute "body". 20 54 Subsection 126(1) (subparagraph (a)(i) of the definition of 21 officer) 22 Omit "company", substitute "body". 23 55 Subsection 126(1) (subparagraph (a)(ii) of the definition of 24 officer) 25 Omit "company", substitute "body, if it is a life company". 26 56 Subsection 126(1) (subparagraphs (a)(iii) and (iv) of the 27 definition of officer) Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 11 [Page Break] Part 1 Main amendments 1 Omit "company", substitute "body". 2 57 Subsection 126(1) (paragraph (b) of the definition of 3 officer) 4 Omit "company", substitute "body". 5 58 Subsection 126(1) (definition of relevant business) 6 Omit "company" (wherever occurring), substitute "body corporate". 7 59 Subsection 126(1) (definition of relevant person) 8 Omit "a company", substitute "a body corporate". 9 60 Subsection 126(1) (paragraph (a) of the definition of 10 relevant person) 11 Omit "company", substitute "body". 12 61 Subsection 126(1) (paragraph (b) of the definition of 13 relevant person) 14 Omit "company", substitute "body, if it is a life company". 15 62 Subsection 126(1) (paragraph (c) of the definition of 16 relevant person) 17 Omit "company", substitute "body". 18 63 Section 128 19 Omit "company (first company) is associated with another company if 20 the 2 companies", substitute "body corporate (the first body) is 21 associated with another body corporate if the 2 bodies". 22 Note: The heading to section 128 is altered by omitting "company" and substituting "body 23 corporate". 24 64 Paragraph 128(a) 25 Repeal the paragraph, substitute: 26 (a) the first body carries on life insurance business or is a 27 registered NOHC; or 28 65 Paragraph 128(b) 29 Omit "companies", substitute "bodies". 12 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 66 Paragraph 128(b) 2 Omit "company", substitute "body". 3 67 Section 129 4 Omit "companies", substitute "bodies corporate". 5 Note: The heading to section 129 is altered by omitting "companies" and substituting "bodies 6 corporate". 7 68 Division 2 of Part 7 (heading) 8 Repeal the heading, substitute: 9 Division 2--Monitoring life companies and registered 10 NOHCs 11 69 Section 130 12 Omit "life company", substitute "body corporate that is a life company 13 or registered NOHC". 14 70 Paragraph 130(c) 15 Omit "company", substitute "body". 16 71 Subsection 131(1) 17 Omit "life company a written notice requiring the company", substitute 18 "body corporate that is a life company or a registered NOHC a written 19 notice requiring the body". 20 72 Paragraph 131(1)(a) 21 Omit "company's", substitute "body's". 22 73 Paragraphs 131(1)(b) and (c) 23 Omit "company", substitute "body". 24 74 Subsection 131(2) 25 Omit "company", substitute "body". 26 75 Subsection 131(3) 27 Omit "life company", substitute "body corporate that is a life company 28 or a registered NOHC". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 13 [Page Break] Part 1 Main amendments 1 76 Subsection 131(4) 2 Omit "company", substitute "body". 3 77 Subsection 132(1) 4 Omit "life company a written notice requiring the company", substitute 5 "body corporate that is a life company or a registered NOHC a written 6 notice requiring the body". 7 78 Subsection 132(1) 8 Omit "company" (last occurring), substitute "body". 9 79 Subsection 132(3) 10 Omit "life company", substitute "body corporate that is a life company 11 or a registered NOHC". 12 80 Subsection 132(4) 13 Omit "company", substitute "body". 14 81 Application 15 The amendments of sections 131 and 132 of the Life Insurance Act 16 1995 made by this Part apply in relation to the giving of a notice on or 17 after the commencement of the amendments. 18 82 Subsections 132A(4) and (5) 19 Repeal the subsections, substitute: 20 Matters requiring notice as soon as practicable 21 (4) If a body corporate that is a life company, registered NOHC or 22 subsidiary of a life company or registered NOHC becomes aware: 23 (a) both: 24 (i) that the body has breached or will breach a provision of 25 this Act (other than a provision to which subsection (1) 26 applies); and 27 (ii) that the breach is or will be significant (see 28 subsection (5)); or 29 (b) of a matter that materially and adversely affects the body's 30 financial position; 14 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 the body must give APRA a written report about the breach or 2 matter as soon as practicable, and in any case no later than 10 3 business days, after becoming aware of the breach or matter. 4 (5) For the purposes of subparagraph (4)(a)(ii), a breach of a provision 5 is or will be significant if the breach is or will be significant 6 having regard to one or more of the following: 7 (a) the number or frequency of similar breaches; 8 (b) the impact the breach has or will have on the body 9 corporate's ability to conduct its business; 10 (c) the extent to which the breach indicates that the body 11 corporate's arrangements to ensure compliance with this Act 12 might be inadequate; 13 (d) the actual or potential financial loss arising or that will arise 14 from the breach: 15 (i) to the owners of policies issued by the body corporate, 16 if it is a life company, or by a life company that is 17 related to the body corporate; or 18 (ii) to the body corporate; 19 (e) any matters prescribed by the regulations for the purposes of 20 this paragraph. 21 83 Subsection 132A(6) 22 Omit "A life company", substitute "A body corporate that is a life 23 company, registered NOHC or subsidiary of a life company or 24 registered NOHC". 25 84 Subsection 132A(6) 26 Omit "the life company", substitute "the body". 27 85 Subsection 132A(7) 28 Omit "a life company", substitute "a body corporate". 29 86 Paragraph 132A(7)(a) 30 Omit "or appointed actuary of the life company", substitute "of the 31 body, or its appointed actuary if it is a life company,". 32 87 Subsection 132A(9) 33 Omit "life company", substitute "body corporate giving the notice or 34 report". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 15 [Page Break] Part 1 Main amendments 1 88 Application 2 The amendments of section 132A of the Life Insurance Act 1995 made 3 by this Part apply in relation to matters of which a body corporate 4 becomes aware on or after the commencement of the amendments 5 (whether the matter arose before, on or after that commencement). 6 89 Subsection 133(1) 7 Omit "life company", substitute "body corporate that is a life company 8 or a registered NOHC". 9 90 Paragraph 133(2)(a) 10 Omit "life company", substitute "body". 11 91 Subsection 135(1) 12 Omit "life company a written notice inviting the company", substitute 13 "body corporate that is a life company or a registered NOHC a written 14 notice inviting the body". 15 92 Paragraph 135(1)(a) 16 Repeal the paragraph, substitute: 17 (a) a written statement of reasons why the Regulator should not 18 investigate: 19 (i) the life insurance business, or a specified part of the life 20 insurance business, of the body, if it is a life company; 21 or 22 (ii) the business of the body, if it is a registered NOHC; and 23 93 Paragraph 135(1)(b) 24 Omit "company", substitute "body". 25 94 Section 136 26 Omit "life company" (first occurring), substitute "body corporate that is 27 a life company or a registered NOHC". 28 95 Paragraphs 136(a) and (b) 29 Omit "life company", substitute "body". 30 96 Subparagraph 136(b)(ii) 31 Omit "company", substitute "body". 16 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 97 Subparagraph 136(b)(iii) 2 Omit "section 22, on the registration of the company", substitute 3 "Part 3, on the registration of the body". 4 98 Paragraph 136(c) 5 Omit "life company", substitute "body". 6 99 Paragraph 136(c) 7 Omit "the company", substitute "the body". 8 100 Paragraph 136(ca) 9 Omit "life company", substitute "body". 10 101 Paragraphs 136(d), (e), (f) and (g) 11 Before "that", insert "if the body is a life company--". 12 102 At the end of section 136 13 Add: 14 ; (h) if the body is a registered NOHC--that information in the 15 possession of the Regulator calls for the investigation of the 16 business of the NOHC. 17 103 Subsection 137(1) 18 Omit "life company", substitute "body corporate that is a life company, 19 or business of a body corporate that is a registered NOHC,". 20 104 Paragraphs 137(1)(a) and (b) 21 Omit "company", substitute "body". 22 105 Subsection 137(2) 23 Omit "life company", substitute "body corporate that is a life company, 24 or business of a body corporate that is a registered NOHC,". 25 106 Paragraph 137(2)(a) 26 Omit "company", substitute "body". 27 107 Subparagraphs 137(2)(c)(i) and (ii) 28 Omit "company", substitute "body". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 17 [Page Break] Part 1 Main amendments 1 108 Paragraph 137(2)(d) 2 Repeal the paragraph, substitute: 3 (d) the Regulator is satisfied that: 4 (i) if the body is a life company--it is in the best interests 5 of owners of policies issued by the company that the 6 business be investigated under this Division; or 7 (ii) if the body is a registered NOHC--it is in the public 8 interest that the business be investigated under this 9 Division. 10 109 Paragraph 138(a) 11 Omit "life company (the first company)", substitute "body corporate 12 (the first body) that is a life company or a registered NOHC". 13 Note: The heading to section 138 is altered by omitting "company" and substituting "body 14 corporate". 15 110 Paragraph 138(b) 16 Omit "company (the associated company)", substitute "body corporate 17 (the associated body)". 18 111 Paragraph 138(b) 19 Omit "first company", substitute "first body". 20 112 Paragraph 138(c) 21 Omit "company", substitute "body". 22 113 Sections 139, 140, 141, 142, 143, 147 and 149 23 Omit "company" (wherever occurring), substitute "body corporate". 24 Note: The heading to section 149 is altered by omitting "company" and substituting "body 25 corporate". 26 114 Section 152 27 Insert: 28 body concerned means: 29 (a) in relation to records--the body corporate by which, or for 30 which, the records are kept; and 31 (b) in relation to the execution of a warrant--the body corporate 32 to whose records the warrant relates. 18 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 115 Section 152 (definition of company concerned) 2 Repeal the definition. 3 116 Sections 153, 154, 155 and 156 4 Omit "company" (wherever occurring), substitute "body". 5 117 Application 6 The amendments of Divisions 3 and 4 of Part 7 of the Life Insurance 7 Act 1995 made by this Part apply in relation to notices given under 8 section 135 of that Act after the commencement of those amendments. 9 Note: Division 4 of Part 7 of the Life Insurance Act 1995 deals with things done under 10 warrants issued under Division 3 of that Part. A warrant can be issued under Division 3 11 of that Part only in connection with an investigation under that Division, which can be 12 carried out only after a notice has been given under section 135 of that Act. 13 118 Subsection 156A(1) 14 Omit "a life company", substitute "a body corporate that is a life 15 company or a registered NOHC". 16 119 Paragraphs 156A(1)(a), (b), (c) and (d) 17 Omit "life company", substitute "body". 18 120 Subparagraphs 156A(2)(a)(ii) and (iii) 19 Repeal the subparagraphs, substitute: 20 (ii) the body's auditor or a member of an audit team 21 conducting an audit of the body; 22 (iii) the appointed actuary of the body, if the body is a life 23 company; 24 121 Subparagraphs 156A(2)(a)(iv) and (v) and (c)(i) and (ii) 25 Omit "life company", substitute "body". 26 122 Subparagraph 156E(1)(b)(i) 27 Repeal the subparagraph, substitute: 28 (i) the body's auditor or a member of an audit team 29 conducting an audit of the body; or 30 (ia) the body's appointed actuary, if the body is a life 31 company; or Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 19 [Page Break] Part 1 Main amendments 1 Note: The heading to section 156E is altered by omitting "company, company officers and" 2 and substituting "body and its officers,". 3 123 Subparagraphs 156E(1)(b)(ii) and (iii) 4 Omit "life company", substitute "body". 5 124 Subparagraph 156E(1)(c)(i) 6 Repeal the subparagraph, substitute: 7 (i) the body's auditor or a member of an audit team 8 conducting an audit of the body; or 9 (ia) the body's appointed actuary, if the body is a life 10 company; or 11 125 Subparagraphs 156E(1)(c)(ii), (iii), (iv) and (v) 12 Omit "life company", substitute "body". 13 126 Application 14 The amendments of section 156A and 156E of the Life Insurance Act 15 1995 made by this Part apply to disclosures made on or after the 16 commencement of the amendments. 17 127 Subsection 190(2) 18 Omit "this Act", substitute "section 21". 19 128 Subparagraphs 203B(a)(i) and (b)(i) 20 Omit "this Act", substitute "section 21". 21 129 Paragraphs 230A(1)(a), (b) and (c) 22 After "companies", insert ", registered NOHCs or subsidiaries of life 23 companies or registered NOHCs". 24 Note: The heading to section 230A is altered by adding at the end ", registered NOHCs and 25 subsidiaries". 26 130 Subsection 230A(1) 27 Omit "concerned", substitute "that are to comply with the standards or 28 that are related to bodies corporate that are to comply with the 29 standards". 30 131 After subsection 230A(3) 20 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 Insert: 2 (3A) Without limiting the prudential matters in relation to which APRA 3 may determine a standard, a standard may require: 4 (a) each life company or registered NOHC; or 5 (b) each life company or registered NOHC included in a 6 specified class of life companies or registered NOHCs; or 7 (c) a specified life company or registered NOHC; or 8 (d) each of 2 or more specified life companies or registered 9 NOHCs; 10 to ensure that its subsidiaries (or particular subsidiaries), or it and 11 its subsidiaries (or particular subsidiaries), collectively satisfy 12 particular requirements in relation to prudential matters. 13 132 At the end of subsection 230A(4) 14 Add ", registered NOHCs or subsidiaries of a life company or registered 15 NOHC". 16 133 Subsections 230A(7) and (9) 17 Repeal the subsections, substitute: 18 (7) If APRA determines or varies a standard referred to in 19 paragraph (1)(c) it must, as soon as practicable, give a copy of the 20 standard or variation to: 21 (a) if the standard applies to one or more life companies that are 22 not subsidiaries of a registered NOHC--each of those life 23 companies; and 24 (b) if the standard applies to one or more registered NOHCs-- 25 each of those registered NOHCs; and 26 (c) if the standard applies to one or more subsidiaries of a life 27 company or registered NOHC--each of those subsidiaries or, 28 if they are specified as subsidiaries of the life company or 29 registered NOHC, the life company or registered NOHC (as 30 appropriate). 31 (9) If APRA revokes a standard referred to in paragraph (1)(c) it must, 32 as soon as practicable, give notice of the revocation to: 33 (a) if the standard applied to one or more life companies that are 34 not subsidiaries of a registered NOHC--each of those life 35 companies; and Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 21 [Page Break] Part 1 Main amendments 1 (b) if the standard applied to one or more registered NOHCs-- 2 each of those registered NOHCs; and 3 (c) if the standard applied to one or more subsidiaries of a life 4 company or registered NOHC--each of those subsidiaries or, 5 if they are specified as subsidiaries of the life company or 6 registered NOHC, the life company or registered NOHC (as 7 appropriate). 8 134 Subsection 230A(13) 9 Repeal the subsection. 10 135 Application 11 (1) The amendments of section 230A of the Life Insurance Act 1995 made 12 by this Part apply in relation to standards determined on or after the 13 commencement of the amendments. 14 (2) To avoid doubt, the amendments do not affect the validity of a standard 15 determined under that section before the commencement of the 16 amendments. 17 136 Subsection 230B(1) 18 Repeal the subsection, substitute: 19 (1) APRA may give a body corporate that is a life company or a 20 registered NOHC a direction of a kind specified in subsection (2) if 21 APRA has reason to believe that: 22 (a) the body corporate has contravened a provision of this Act or 23 the Financial Sector (Collection of Data) Act 2001; or 24 (b) the body corporate is likely to contravene this Act or the 25 Financial Sector (Collection of Data) Act 2001, and such a 26 contravention is likely to give rise to a prudential risk; or 27 (c) the body corporate has contravened a condition or direction 28 under this Act or the Financial Sector (Collection of Data) 29 Act 2001; or 30 (d) the direction is necessary in the interests of: 31 (i) if the body corporate is a life company--policy owners 32 or prospective policy owners of the life company; or 33 (ii) if the body corporate is a registered NOHC--policy 34 owners or prospective policy owners of any life 35 company that is a subsidiary of the NOHC; or 22 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 (e) the body corporate is, or is about to become, unable to meet 2 its liabilities; or 3 (f) there is, or there might be, a material risk to the security of 4 the body corporate's assets; or 5 (g) there has been, or there might be, a sudden material 6 deterioration in the body corporate's financial condition; or 7 (h) the body corporate is conducting its affairs in an improper or 8 financially unsound way; or 9 (i) the failure to issue a direction would materially prejudice the 10 interests of: 11 (i) if the body corporate is a life company--policy owners 12 or prospective policy owners of the life company; or 13 (ii) if the body corporate is a registered NOHC--policy 14 owners or prospective policy owners of any life 15 company that is a subsidiary of the NOHC; or 16 (j) the body corporate is conducting its affairs in a way that may 17 cause or promote instability in the Australian financial 18 system. 19 137 Paragraph 230B(1A)(a) 20 Omit "company", substitute "body corporate". 21 138 Subsection 230B(2) 22 Repeal the subsection, substitute: 23 (2) The kinds of direction that the body corporate may be given are 24 directions to do, or to cause a body corporate that is its subsidiary 25 to do, any one or more of the following: 26 (a) to comply with the whole or a part of this Act or the 27 Financial Sector (Collection of Data) Act 2001; 28 (b) to comply with a condition or direction referred to in 29 paragraph (1)(c); 30 (c) to order an audit of the affairs of the body corporate, at the 31 expense of the body corporate, by an auditor chosen by 32 APRA; 33 (d) to remove a director or senior manager from office; 34 (e) to ensure a director or senior manager of the body corporate 35 does not take part in the management or conduct of the 36 business of the body corporate except as permitted by APRA; Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 23 [Page Break] Part 1 Main amendments 1 (f) to appoint a person or persons as a director or senior manager 2 of the body corporate for such term as APRA directs; 3 (g) to remove any auditor of the body corporate from office and 4 appoint another auditor to hold office for such term as APRA 5 directs; 6 (h) to terminate the appointment of the appointed actuary of the 7 body corporate and to appoint another actuary to hold office 8 for such term as APRA directs, if the body corporate is a life 9 company; 10 (i) not to give financial accommodation to any person; 11 (j) not to issue or renew any policy, undertake any liability 12 under any policy or collect any premium; 13 (k) not to borrow any amount; 14 (l) not to accept any payment on account of share capital, except 15 payments in respect of calls that fell due before the direction 16 was given; 17 (m) not to repay any amount paid on shares; 18 (n) not to pay a dividend on any shares; 19 (o) not to discharge any policy or other liability; 20 (p) not to transfer any asset of a statutory fund; 21 (q) not to pay or transfer any amount to any person, or create an 22 obligation (contingent or otherwise) to do so; 23 (r) not to undertake any financial obligation (contingent or 24 otherwise) on behalf of any other person; 25 (s) to hold, or otherwise deal in a specified way, with a specified 26 amount of capital; 27 (t) to provide, or further provide, in its accounts for the purposes 28 of this Act, a specified amount or an amount determined in a 29 specified way in respect of its liabilities or the value of a 30 specified asset of the body corporate; 31 (u) to order an actuarial investigation of the affairs of the body 32 corporate, at the expense of the body corporate, by an actuary 33 chosen by APRA; 34 (v) to do, or to refrain from doing, an act that relates to the way 35 in which the affairs of the body corporate are to be conducted 36 or not conducted. 37 A direction under paragraph (q) not to pay or transfer any amount 38 does not apply to the payment or transfer of money pursuant to an 39 order of a court or a process of execution. 24 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 139 Subsections 230B(5) and (6) 2 Omit "life company", substitute "body corporate". 3 140 After subsection 230B(6) 4 Insert: 5 (6A) If the direction requires the body corporate to cause a subsidiary to 6 do, or to refrain from doing, an act or thing: 7 (a) the body corporate has power to cause the subsidiary to do, 8 or to refrain from doing, the act or thing; and 9 (b) the subsidiary has power to do, or to refrain from doing, the 10 act or thing; 11 despite anything in the subsidiary's constitution or any contract or 12 arrangement to which the subsidiary is a party. 13 141 Subsection 230B(7) 14 Omit "life company", substitute "body corporate". 15 142 Paragraph 230B(8)(c) 16 Omit "company", substitute "body corporate". 17 143 Subsection 230B(10) (definition of senior manager) 18 Repeal the definition. 19 144 Subsection 230C(2) 20 Omit "230B(2)(m)", substitute "230B(2)(o)". 21 145 Application 22 (1) The amendments of sections 230B and 230C of the Life Insurance Act 23 1995 made by this Part apply in relation to the giving of directions on or 24 after the commencement of those amendments. 25 (2) To avoid doubt, those amendments do not affect the validity of a 26 direction given under section 230B of that Act before the 27 commencement of those amendments. 28 146 Subsection 230D(1) 29 After "company", insert "or registered NOHC". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 25 [Page Break] Part 1 Main amendments 1 147 Paragraph 230D(3)(a) 2 After "company", insert "or registered NOHC". 3 148 At the end of paragraph 230D(3)(b) 4 Add "or registered NOHCs". 5 149 Subsection 230D(4) 6 After "company", insert "or registered NOHC". 7 150 Subsection 230F(1) 8 After "company", insert "or registered NOHC". 9 151 Subsection 230F(2) 10 After "life company", insert "or registered NOHC". 11 152 Subsection 230F(2) 12 After "the company" (wherever occurring), insert "or NOHC". 13 153 Subsection 230F(3) 14 After "life company", insert "or registered NOHC". 15 154 Paragraphs 230F(3)(a) and (b) 16 After "company", insert "or NOHC". 17 155 Subsection 230F(4) 18 After "life company", insert "or registered NOHC". 19 156 Subsection 230F(4) 20 After "the company", insert "or NOHC". 21 157 Subsection 236(1) (after paragraph (ga) of the definition 22 of reviewable decision) 23 Insert: 24 (gb) a refusal of an application for registration of a body corporate 25 under section 28A; 26 (gc) a decision to impose conditions, or additional conditions, on 27 a NOHC registration; 26 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 (gd) a decision to vary conditions imposed on a NOHC 2 registration; 3 (ge) a decision to revoke under section 28C a NOHC registration; 4 158 At the end of subsection 237(3) 5 Add "or of a NOHC of such a company or body". 6 159 At the end of subsection 240(1) 7 Add "and Non-Operating Holding Companies". 8 Note: The heading to section 240 is altered by adding at the end "and Non-Operating 9 Holding Companies". 10 160 Subsection 240(3) 11 After "company", insert ", or body corporate,". 12 161 Subsection 242(2) 13 Omit "this Act", substitute "section 21". 14 162 Subparagraphs 245(2)(b)(i) and (ii) 15 After "company", insert ", or body corporate,". 16 163 Subparagraph 245(2)(b)(iii) 17 Omit "this Act", substitute "section 21". 18 164 Subparagraph 245(2)(b)(iv) 19 After "company", insert ", or body corporate,". 20 165 Subparagraphs 245(3)(b)(i) and (ii) 21 After "company", insert ", or body corporate,". 22 166 Subparagraph 245(3)(b)(iii) 23 Omit "this Act", substitute "section 21". 24 167 Subparagraph 245(3)(b)(iv) 25 After "company", insert ", or body corporate,". 26 168 Subsection 245(5) 27 After "A company", insert "or body corporate". Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 27 [Page Break] Part 1 Main amendments 1 169 Paragraph 245(5)(a) 2 After "company", insert "or body corporate". 3 170 Subparagraphs 245(5)(c)(i), (ii) and (iv) 4 After "company", insert "or body corporate". 5 171 Paragraph 245(5)(e) 6 After "company", insert "or body corporate". 7 172 Subsection 245(5A) 8 After "A company", insert "or body corporate". 9 173 Paragraph 245(5A)(a) 10 After "company", insert "or body corporate". 11 174 Subparagraphs 245(5A)(c)(i), (ii) and (iv) 12 After "company", insert "or body corporate". 13 175 Paragraph 245(5A)(e) 14 After "company", insert "or body corporate". 15 176 Paragraph 245A(2)(a) 16 After "company", insert ", or body corporate,". 17 177 Paragraph 245A(2)(b) 18 After "companies", insert ", or bodies corporate,". 19 178 Paragraph 245A(2)(c) 20 After "company", insert ", or body corporate,". 21 179 Paragraph 245A(5)(a) 22 After "company" (wherever occurring), insert ", or body corporate,". 23 180 Application 24 The amendments of section 245A of the Life Insurance Act 1995 made 25 by this Part apply in relation to applications made on or after the 26 commencement of the amendments. 28 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Main amendments Part 1 1 181 Subsection 254(1) 2 Omit "this Act", substitute "section 21". 3 182 Schedule 4 Insert: 5 NOHC: see Non-Operating Holding Company. 6 183 Schedule 7 Insert: 8 NOHC registration has the meaning given by section 28A. 9 184 Schedule 10 Insert: 11 Non-Operating Holding Company, in relation to a body corporate, 12 means a body corporate: 13 (a) of which the first body corporate is a subsidiary; and 14 (b) that does not carry on a business (other than a business 15 consisting of the ownership or control of other bodies 16 corporate); and 17 (c) that is incorporated in Australia. 18 185 Schedule (definition of Register) 19 After "Companies", insert "and Non-Operating Holding Companies". 20 186 Schedule 21 Insert: 22 registered NOHC means a body corporate that: 23 (a) is registered under Division 2 (Registration of NOHCs of life 24 companies) of Part 3; and 25 (b) is a NOHC of one or more life companies. 26 187 Schedule 27 Insert: Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 29 [Page Break] Part 1 Main amendments 1 senior manager of a body corporate means a person who has or 2 exercises any of the senior management responsibilities (within the 3 meaning of the prudential standards) for the body. 4 30 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Consequential amend ments Part 2 1 2 Part 2--Consequential amendments 3 Australian Prudential Regulation Authority Act 1998 4 188 Paragraph 3(2)(e) 5 After "under", insert "section 21 of". 6 189 At the end of paragraph 3(2)(e) 7 Add "or a registered NOHC within the meaning of that Act". 8 Authorised Non-operating Holding Companies Supervisory 9 Levy Imposition Act 1998 10 190 Section 5 (definition of authorised NOHC) 11 Repeal the definition, substitute: 12 authorised NOHC means: 13 (a) an authorised NOHC within the meaning of the Banking Act 14 1959 or the Insurance Act 1973; or 15 (b) a registered NOHC within the meaning of the Life Insurance 16 Act 1995. 17 Note: NOHC is short for non-operating holding company. 18 191 Paragraph 7(1)(b) 19 Omit "year.", substitute "year; or". 20 192 After paragraph 7(1)(b) 21 Insert: 22 (c) if the authorised NOHC is a registered NOHC within the 23 meaning of the Life Insurance Act 1995--the amount 24 determined, by legislative instrument, by the Treasurer for 25 the purpose of this paragraph in relation to the financial year. 26 193 Subsection 7(1) 27 Omit "or (b)", substitute ", (b) or (c)". 28 194 Application Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 31 [Page Break] Part 2 Consequential amendments 1 (1) This item applies if the amendments of the Authorised Non-operating 2 Holding Companies Supervisory Levy Imposition Act 1998 made by this 3 Schedule commence during a financial year (but not on 1 July of that 4 financial year). 5 (2) That Act, as amended by this Schedule, has effect, in relation to that 6 financial year and authorised NOHCs that are registered NOHCs, with 7 the modifications (if any) prescribed by the regulations. 8 Note: Subitems (1) and (2) are equivalent to subsection 2(2) of the Authorised Non-operating 9 Holding Companies Supervisory Levy Imposition Act 1998. 10 (3) The Governor-General may make regulations for the purposes of 11 subitem (2). 12 Note: Subitem (3) is equivalent to section 9 of the Authorised Non-operating Holding 13 Companies Supervisory Levy Imposition Act 1998. 14 (4) In this item: 15 authorised NOHC has the same meaning as in the Authorised 16 Non-operating Holding Companies Supervisory Levy Imposition Act 17 1998 as amended by this Schedule. 18 modifications includes additions, omissions and substitutions. 19 registered NOHC has the same meaning as in the Life Insurance Act 20 1995. 21 Corporations Act 2001 22 195 Paragraph 283AC(1)(c) 23 After "under", insert "section 21 of". 24 196 Subparagraphs 324CH(5)(a)(ii) and 448C(2)(a)(ii) 25 After "under", insert "section 21 of". 26 197 Paragraph 482(1A)(b) 27 After "under", insert "section 21 of". 28 198 Subparagraph 532(3)(a)(ii) 29 After "under", insert "section 21 of". 30 199 Paragraphs 708(19)(b) and 985A(2)(b) 31 After "registered under", insert "section 21 of". 32 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Consequential amend ments Part 2 1 Financial Institutions Supervisory Levies Collection Act 2 1998 3 200 Section 7 (definition of authorised NOHC) 4 Repeal the definition, substitute: 5 authorised NOHC means: 6 (a) an authorised NOHC within the meaning of either: 7 (i) the Banking Act 1959; or 8 (ii) the Insurance Act 1973; or 9 (b) a registered NOHC within the meaning of the Life Insurance 10 Act 1995. 11 Note: NOHC is short for non-operating holding company. 12 201 Section 7 (definition of life insurance company) 13 After "under", insert "section 21 of". 14 Financial Sector (Business Transfer and Group Restructure) 15 Act 1999 16 202 Subsection 4(1) (definition of life insurance company) 17 After "under", insert "section 21 of". 18 Financial Sector (Collection of Data) Act 2001 19 203 Paragraph 7(2)(e) 20 After "under", insert "section 21 of". 21 Financial Sector (Shareholdings) Act 1998 22 204 Section 3 (paragraph (b) of the definition of authorised 23 insurance company) 24 After "under", insert "section 21 of". 25 First Home Saver Accounts Act 2008 26 205 Section 18 (definition of life insurance company) Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 33 [Page Break] Part 2 Consequential amendments 1 After "under", insert "section 21 of". 2 Income Tax Assessment Act 1936 3 206 Subsection 121AB(3) 4 After "under", insert "section 21 of". 5 207 Paragraph 128AE(2)(d) 6 After "under", insert "section 21 of". 7 Income Tax Assessment Act 1997 8 208 Subsection 995-1(1) (definition of life insurance 9 company) 10 After "under", insert "section 21 of". 11 Insurance Acquisitions and Takeovers Act 1991 12 209 Subsection 4(1) (paragraph (b) of the definition of 13 accounting period) 14 After "under", insert "section 21 of". 15 210 Subsection 4(1) (paragraph (b) of the definition of 16 Australian-registered insurance company) 17 After "under", insert "section 21 of". 18 211 Subsection 4(1) (subparagraph (a)(ii) of the definition of 19 book value) 20 After "under", insert "section 21 of". 21 212 Subsection 4(1) (paragraph (a) of the definition of total 22 book net liabilities) 23 After "under", insert "section 21 of". 24 213 Subparagraph 36(c)(ii) 25 After "under", insert "section 21 of". 26 214 Paragraphs 77(1)(a) and 78(1)(a) 34 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Consequential amend ments Part 2 1 After "registered under", insert "section 21 of". 2 Insurance Act 1973 3 215 Paragraph 116A(4)(b) 4 After "registered under", insert "section 21 of". 5 Life Insurance Supervisory Levy Imposition Act 1998 6 216 Title 7 After "under", insert "section 21 of". 8 217 Section 5 (definition of life insurance company) 9 After "under", insert "section 21 of". 10 Pooled Development Funds Act 1992 11 218 Subsection 4(1) (paragraph (a) of the definition of life 12 office) 13 After "under", insert "section 21 of". 14 Retirement Savings Accounts Act 1997 15 219 Section 16 (paragraph (a) of the definition of life 16 insurance company) 17 After "under", insert "section 21 of". 18 Social Security Act 1991 19 220 Subsection 9(1) (paragraph (d) of the definition of income 20 stream) 21 After "under", insert "section 21 of". 22 Superannuation Industry (Supervision) Act 1993 23 221 Subsection 10(1) (paragraph (a) of the definition of life 24 insurance company) Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 35 [Page Break] Part 2 Consequential amendments 1 After "under", insert "section 21 of". 2 Superannuation (Unclaimed Money and Lost Members) Act 3 1999 4 222 Section 8 (paragraph (a) of the definition of life insurance 5 company) 6 After "under", insert "section 21 of". 7 Veterans' Entitlements Act 1986 8 223 Subsection 5J(1) (paragraph (d) of the definition of 9 income stream) 10 After "under", insert "section 21 of". 11 36 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Banking Act 1959 Part 1 1 2 Schedule 2--Injunctions 3 Part 1--Banking Act 1959 4 1 Paragraph 65A(1)(a) 5 Repeal the paragraph, substitute: 6 (a) a contravention of: 7 (i) a provision of this Act, the regulations or the prudential 8 standards; or 9 (ii) a condition imposed or specified under this Act; or 10 (iii) a direction by APRA under this Act; or 11 2 Paragraphs 65A(1)(b), (c), (d), (e) and (f) 12 Omit "or condition", substitute ", condition or direction". 13 3 Paragraph 65A(4)(a) 14 Omit "section 7, 8, 66, 66A or 67", substitute "this Act, the regulations 15 or the prudential standards". 16 4 Paragraph 65A(4)(b) 17 Omit "on a consent given under subsection 63(1);", substitute "imposed 18 or specified under this Act to do; or". 19 5 After paragraph 65A(4)(b) 20 Insert: 21 (c) by a direction by APRA under this Act to do; 22 6 Subsection 65A(9) 23 Omit "subsection (1), (4) or (7)", substitute "this section". 24 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 37 [Page Break] Part 2 Insurance Act 1973 1 2 Part 2--Insurance Act 1973 3 7 Section 129D 4 Repeal the section, substitute: 5 129D Injunctions 6 Restraining injunctions 7 (1) If a person (the perpetrator) has engaged, is engaging or is 8 proposing to engage, in conduct that constituted, constitutes or 9 would constitute: 10 (a) a contravention of: 11 (i) this Act, the regulations or the prudential standards; or 12 (ii) a condition imposed or specified under this Act; or 13 (iii) a direction by APRA under this Act; or 14 (b) attempting to contravene the Act, regulations, standards, 15 condition or direction; or 16 (c) aiding, abetting, counselling or procuring a person to 17 contravene the Act, regulations, standards, condition or 18 direction; or 19 (d) inducing or attempting to induce, whether by threats, 20 promises or otherwise, a person to contravene the Act, 21 regulations, standards, condition or direction; or 22 (e) being in any way, directly or indirectly, knowingly concerned 23 in, or party to, the contravention by a person of the Act, 24 regulations, standards, condition or direction; or 25 (f) conspiring with others to contravene the Act, regulations, 26 standards, condition or direction; 27 the Federal Court may grant an injunction in accordance with 28 subsection (2). 29 Nature of injunction 30 (2) If granted, the injunction: 31 (a) is to restrain the perpetrator from engaging in the conduct; 32 and 38 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Insurance Act 1973 Part 2 1 (b) if in the opinion of the court it is desirable to do so, may also 2 require the perpetrator to do any act or thing. 3 The court may only grant the injunction on the application of 4 APRA, and may grant it on such terms as the court thinks 5 appropriate. 6 Performance injunctions 7 (3) If a person (the unwilling person) has refused or failed, is refusing 8 or failing, or is proposing to refuse or fail, to do an act or thing that 9 the person is required by: 10 (a) this Act, the regulations or the prudential standards; or 11 (b) a condition imposed or specified under this Act; or 12 (c) a direction by APRA under this Act; 13 to do, the Federal Court may, on the application of APRA, grant an 14 injunction, on such terms as the court thinks appropriate, requiring 15 the unwilling person to do that act or thing. 16 Consent injunctions 17 (4) If an application for an injunction under subsection (1) or (3) has 18 been made, the Federal Court may, if the court thinks it 19 appropriate, grant an injunction by consent of all the parties to the 20 proceedings, whether or not the court is satisfied that that 21 subsection applies. 22 Interim injunctions 23 (5) If in the opinion of the Federal Court it is desirable to do so, the 24 court may grant an interim injunction pending determination of an 25 application under subsection (1). 26 Variation or discharge of injunctions 27 (6) The Federal Court may discharge or vary an injunction granted 28 under this section. 29 Restraining injunctions 30 (7) The power of the Federal Court to grant an injunction restraining a 31 person from engaging in conduct may be exercised: Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 39 [Page Break] Part 2 Insurance Act 1973 1 (a) whether or not it appears to the court that the person intends 2 to engage again, or to continue to engage, in conduct of that 3 kind; and 4 (b) whether or not the person has previously engaged in conduct 5 of that kind; and 6 (c) whether or not there is an imminent danger of substantial 7 damage to any person if the first-mentioned person engages 8 in conduct of that kind. 9 Performance injunctions 10 (8) The power of the Federal Court to grant an injunction requiring a 11 person to do an act or thing may be exercised: 12 (a) whether or not it appears to the court that the person intends 13 to refuse or fail again, or to continue to refuse or fail, to do 14 that act or thing; and 15 (b) whether or not the person has previously refused or failed to 16 do that act or thing; and 17 (c) whether or not there is an imminent danger of substantial 18 damage to any person if the first-mentioned person refuses or 19 fails to do that act or thing. 20 Damages undertakings 21 (9) If APRA applies to the Federal Court for the grant of an injunction 22 under this section, the court must not require the applicant or any 23 other person, as a condition of granting an interim injunction, to 24 give an undertaking as to damages. 25 Damages orders 26 (10) If the Federal Court has power under this section to grant an 27 injunction restraining a person from engaging in particular 28 conduct, or requiring a person to do a particular act or thing, the 29 court may, either in addition to or in substitution for the grant of 30 the injunction, order that person to pay damages to any other 31 person. 32 This section extends Federal Court's powers 33 (11) The powers this section gives the Federal Court are additional to 34 (and do not limit) its other powers. 35 40 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Life Insurance Act 1995 Part 3 1 2 Part 3--Life Insurance Act 1995 3 8 Section 235 4 Repeal the section, substitute: 5 235 Injunctions 6 Restraining injunctions 7 (1) If a person (the perpetrator) has engaged, is engaging or is 8 proposing to engage, in conduct that constituted, constitutes or 9 would constitute: 10 (a) a contravention of this Act, a condition imposed or specified 11 under this Act (including a condition mentioned in subsection 12 208(3)) or a direction by APRA or ASIC under this Act; or 13 (b) attempting to contravene the Act, condition or direction; or 14 (c) aiding, abetting, counselling or procuring a person to 15 contravene the Act, condition or direction; or 16 (d) inducing or attempting to induce, whether by threats, 17 promises or otherwise, a person to contravene the Act, 18 condition or direction; or 19 (e) being in any way, directly or indirectly, knowingly concerned 20 in, or party to, the contravention by a person of the Act, 21 condition or direction; or 22 (f) conspiring with others to contravene the Act, condition or 23 direction; 24 the Court may grant an injunction in accordance with 25 subsection (2). 26 Nature of injunction 27 (2) If granted, the injunction: 28 (a) is to restrain the perpetrator from engaging in the conduct; 29 and 30 (b) if in the opinion of the Court it is desirable to do so, may also 31 require the perpetrator to do any act or thing. 32 The Court may only grant the injunction on the application of the 33 Regulator, and may grant it on such terms as the Court thinks 34 appropriate. Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 41 [Page Break] Part 3 Life Insurance Act 1995 1 Performance injunctions 2 (3) If a person (the unwilling person) has refused or failed, is refusing 3 or failing, or is proposing to refuse or fail, to do an act or thing that 4 the person is required by this Act, a condition imposed or specified 5 under this Act or a direction by APRA or ASIC under this Act to 6 do, the Court may, on the application of the Regulator, grant an 7 injunction, on such terms as the Court thinks appropriate, requiring 8 the unwilling person to do that act or thing. 9 Consent injunctions 10 (4) If an application for an injunction under subsection (1) or (3) has 11 been made, the Court may, if the Court thinks it appropriate, grant 12 an injunction by consent of all the parties to the proceedings, 13 whether or not the Court is satisfied that that subsection applies. 14 Interim injunctions 15 (5) If in the opinion of the Court it is desirable to do so, the Court may 16 grant an interim injunction pending determination of an application 17 under subsection (1). 18 Variation or discharge of injunctions 19 (6) The Court may discharge or vary an injunction granted under this 20 section. 21 Restraining injunctions 22 (7) The power of the Court to grant an injunction restraining a person 23 from engaging in conduct may be exercised: 24 (a) whether or not it appears to the Court that the person intends 25 to engage again, or to continue to engage, in conduct of that 26 kind; and 27 (b) whether or not the person has previously engaged in conduct 28 of that kind; and 29 (c) whether or not there is an imminent danger of substantial 30 damage to any person if the first-mentioned person engages 31 in conduct of that kind. 42 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] Life Insurance Act 1995 Part 3 1 Performance injunctions 2 (8) The power of the Court to grant an injunction requiring a person to 3 do an act or thing may be exercised: 4 (a) whether or not it appears to the Court that the person intends 5 to refuse or fail again, or to continue to refuse or fail, to do 6 that act or thing; and 7 (b) whether or not the person has previously refused or failed to 8 do that act or thing; and 9 (c) whether or not there is an imminent danger of substantial 10 damage to any person if the first-mentioned person refuses or 11 fails to do that act or thing. 12 Damages undertakings 13 (9) If the Regulator applies to the Court for the grant of an injunction 14 under this section, the Court must not require the applicant or any 15 other person, as a condition of granting an interim injunction, to 16 give an undertaking as to damages. 17 Damages orders 18 (10) If the Court has power under this section to grant an injunction 19 restraining a person from engaging in particular conduct, or 20 requiring a person to do a particular act or thing, the Court may, 21 either in addition to or in substitution for the grant of the 22 injunction, order that person to pay damages to any other person. 23 This section extends Federal Court's powers 24 (11) The powers this section gives the Court are additional to (and do 25 not limit) its other powers. 26 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 43 [Page Break] Part 4 Superannuation Industry (Supervision) Act 1993 1 2 Part 4--Superannuation Industry (Supervision) Act 3 1993 4 9 Paragraphs 315(1)(a), (b), (c), (d), (e) and (f) 5 After "Act", insert ", a condition imposed on an RSE licence or a 6 direction given under this Act by APRA or the Regulator". 7 10 Subsection 315(3) 8 After "this Act", insert ", a condition imposed on an RSE licence or a 9 direction given under this Act by APRA or the Regulator". 10 11 Subsection 315(6) 11 Omit "subsection (1), (3) or (5)", substitute "this section". 12 12 After subsection 315(11) 13 Insert: 14 This section extends Federal Court's powers 15 (11A) The powers this section gives the Court are additional to (and do 16 not limit) its other powers. 17 44 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 [Page Break] First Home Saver Accounts Act 2008 Part 5 1 2 Part 5--First Home Saver Accounts Act 2008 3 13 At the end of Division 2 of Part 7 4 Add: 5 120A Injunctions for breach of conditions on authorisations 6 (1) The Superannuation Industry (Supervision) Act 1993 applies in 7 accordance with subsection 114(2) with the modification set out in 8 this section. 9 (2) Treat the references in section 315 of the Superannuation Industry 10 (Supervision) Act 1993 to a condition imposed on an RSE licence 11 as references to a condition imposed on an authorisation as an 12 FHSA provider. 13 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009 45 [Page Break] Part 6 Application 1 2 Part 6--Application 3 14 Application 4 The amendments made by this Schedule apply in relation to 5 applications for injunctions made on or after the commencement of this 6 Schedule, whether the conduct, refusal or failure that is the subject of 7 the application occurred before, on or after that commencement. 46 Financial Sector Legislation Amendment (Enhancing Supervision and Enforcement) Bill 2009 No. , 2009