INSURANCE ACT 1973 - SECT 78 Direction not to deal with certain assets

INSURANCE ACT 1973 - SECT 78

  (1)   This section applies to a designated security trust fund if APRA has reason to believe that the fund does not constitute, or is unlikely to constitute, an adequate security for the class of insurance liabilities secured by the fund.

  (2)   APRA may, by written notice given to the trustee of the fund, direct:

  (a)   that the trustee must not dispose of, or otherwise deal with or remove from Australia, any asset of the fund; or

  (b)   that the trustee must not dispose of, or otherwise deal with or remove from Australia, a specified asset of the fund; or

  (c)   that the trustee must deal with a specified asset of the fund on such terms and conditions as are specified in the notice.

Note:   For specification by class, see subsection   33(3AB) of the Acts Interpretation Act 1901 .

  (3)   If:

  (a)   a direction under subsection   (2) has been in force in relation to a fund for a period of more than 6 months; and

  (b)   Lloyd's or the trustee of the fund requests APRA, in writing, to review the direction;

APRA must consider whether the direction should:

  (c)   remain in force; or

  (d)   be varied; or

  (e)   be revoked.

  (4)   In considering the matter referred to in subsection   (3), APRA must have regard to:

  (a)   whether an investigation under Subdivision B is being, or has been, undertaken in relation to the fund; and

  (b)   whether a determination under section   93 is in force; and

  (c)   such other matters (if any) as APRA considers relevant.

  (5)   If:

  (a)   a request is made under subsection   (3) in relation to a direction; and

  (b)   the direction is still in force immediately before the end of the period of 30 days that began when the request was made;

the direction ceases to be in force at the end of that period.

  (6)   A person must comply with a direction under subsection   (2).

  (7)   A person who intentionally or recklessly contravenes subsection   (6) commits an offence punishable on conviction by a fine not exceeding 200 penalty units.

  (8)   This section does not affect the validity of a transaction entered into in contravention of a direction under subsection   (2).

  (9)   If:

  (a)   a direction under subsection   (2) is in force in relation to a fund; and

  (b)   the fund commences to be under judicial trusteeship in accordance with Division   5;

the direction ceases to have effect on that commencement.