Commonwealth Numbered Acts

INSURANCE LAWS AMENDMENT ACT 1998 No. 35, 1998 - SCHEDULE 2

Insurance Act 1973

1 Subsection 3(1) (definition of accounts)

Omit "the Schedule", substitute "Part VII".

2 Subsection 3(1)

Insert:

Federal Court means the Federal Court of Australia.

3 Subsection 3(1) (definition of Lloyd's )

Omit "Imperial Act", substitute "Act of the United Kingdom".

4 Subsection 21(3)

Omit "Part VII", substitute "section 93".

5 Before section 93

Insert:

SECT 65 Simplified outline

The following is a simplified outline of this Part:

* Lloyd's will be required to ensure that there are in existence security trust fund arrangements under which final judgments obtained in Australia against Lloyd's underwriters in respect of certain insurance liabilities may be satisfied out of trust property.

* Security trust funds in existence in fulfilment of such a requirement are called designated security trust funds .

* The Commissioner may make rules that are applicable to designated security trust funds.

* Lloyd's underwriters are authorised to carry on insurance business. However, that authorisation may be suspended or cancelled if there has been a contravention of this Part.

* The Commissioner may require the appointment of an actuary to carry out an investigation of the extent to which a designated security trust fund constitutes an adequate security for the class of insurance liabilities secured by the fund.

* The Commissioner has powers of inquiry, direction and investigation in relation to designated security trust funds that correspond to the powers conferred by Part V in relation to authorised corporate insurers.

* The Federal Court may make an order placing a designated security trust fund under judicial trusteeship.

* Lloyd's, or a company nominated by Lloyd's, is required to lodge with the Treasurer a security deposit valued at $2 million. The deposit is available to meet the costs of judicial trusteeship of designated security trust funds.

SECT 66 Definitions

In this Part:

designated security trust fund has the meaning given by section 69.

insurance liability means a liability under a contract of insurance.

judicial trustee has the meaning given by section 92.

legal personal representative means:

(a) the executor of the will, or the administrator of the estate, of a deceased person; or

(b) the trustee of the estate of a person under a legal disability; or

(c) a person who holds an enduring power of attorney granted by another person; or

(d) a person who, by order of a court or otherwise, has the legal administration or control of the affairs of another person.

(a) a corporation to which paragraph 51(xx) of the Constitution applies; and

(b) a company incorporated, or taken to be incorporated, under the Corporations Law. security trust fund has the meaning given by section 67.

SECT 67 Security trust funds

(1) For the purposes of this Part, a security trust fund is a trust fund established by deed, where:

(a) the trust property is available to satisfy final judgments obtained in Australia against Lloyd's underwriters in respect of a class of insurance liabilities specified in the deed; and

(b) the trustee is a qualified corporation.

(3) For the purposes of this Part, a contract of insurance is covered by a security trust fund if insurance liabilities under the contract are secured by the fund.

(4) For the purposes of this section, a judgment is a final judgment if, and only if, it can no longer be appealed or set aside.

(5) In this section:

Lloyd's underwriter includes:

(a) a former Lloyd's underwriter; and

(b) the legal personal representative of a Lloyd's underwriter or a former Lloyd's underwriter.

SECT 68 Security trust fund arrangements

(1) The Commissioner may, by written instrument, require Lloyd's to ensure that, at all times when the instrument is in force, there are in existence:

(a) such security trust fund arrangements; and

(b) such ancillary or incidental arrangements;

Note: The required arrangements may be varied--see subsection 33(3) of the Acts Interpretation Act 1901 .

(3) An instrument under subsection (1) may:

(a) require a trust deed for a security trust fund to be approved by the Commissioner; and

(b) require alterations of a trust deed for a security trust fund to be approved by the Commissioner; and

(c) require the trustee of a security trust fund to be approved by the Commissioner.

(5) If:

(a) an instrument under subsection (1) requires a trust deed for a security trust fund to be approved by the Commissioner; and

(b) the approval is not obtained;

(6) If:

(a) an instrument under subsection (1) requires an alteration of a trust deed for a security trust fund to be approved by the Commissioner; and

(b) the approval is not obtained;

(7) If:

(a) an instrument under subsection (1) requires the trustee of a security trust fund to be approved by the Commissioner; and

(b) the approval is not obtained;

(8) Before making an instrument under subsection (1), the Commissioner must consult Lloyd's unless the Commissioner is satisfied that the delay that would be involved in consulting Lloyd's would be likely to prejudice the interests of the holders of contracts of insurance covered, or to be covered, by the fund or funds concerned. A failure to comply with this subsection does not affect the validity of the instrument.

(9) Section 70 does not, by implication, limit this section.

(10) An instrument under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .

(11) A reference in subsection (1) to an ancillary or incidental arrangement includes a reference to an arrangement for the funding of a security trust fund.

(12) Lloyd's must comply with an instrument in force under subsection (1).

SECT 69 Designated security trust funds

In this Part, a security trust fund that is, or was at any time, in existence in fulfilment of an obligation imposed by an instrument under subsection 68(1) is called a designated security trust fund .

SECT 70 Rules about designated security trust funds

(1) The Commissioner may, by written instrument, make rules that are applicable to the operation of designated security trust funds.

(2) An instrument under subsection (1) may make provision for or in relation to a matter by conferring a power on the Commissioner.

(3) An instrument under subsection (1) may make provision for or in relation to the following matters:

(a) the making available to the public of copies of trust deeds for funds;

(b) the keeping and retention of records in relation to funds;

(c) the accounts, financial reports and actuarial reports to be prepared in relation to funds;

(d) the auditing of accounts and financial reports prepared in relation to funds;

(e) the disclosure of information about funds to the Commissioner;

(f) the inspection by the Commissioner of records kept by funds;

(g) the preparation, and lodgment with the Commissioner, of returns in relation to funds;

(h) the valuation of the assets of funds.

(5) Before making an instrument under subsection (1), the Commissioner must consult Lloyd's unless the Commissioner is satisfied that the delay that would be involved in consulting Lloyd's would be likely to prejudice the interests of the holders of contracts of insurance covered by one or more designated security trust funds. A failure to comply with this subsection does not affect the validity of the instrument.

(6) Section 68 does not, by implication, limit this section.

(7) An instrument under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .

(8) The trustee of a designated security trust fund must comply with any rules in force under subsection (1).

(9) A person who intentionally or recklessly contravenes subsection (8) is guilty of an offence punishable on conviction by a fine not exceeding 200 penalty units.

SECT 71 Transfers to trustee of security trust fund--presumption of regularity

If:

(a) money or property is transferred to a person in the capacity of trustee of a particular designated security trust fund; and

(b) the transfer is for the purposes of this Division;

(c) the intention of the transferor; or

(d) the authority or capacity of the transferor.

SECT 72 When security trust fund constitutes an adequate security for the class of insurance liabilities secured by the fund

(1) For the purposes of this Part, in determining the extent to which a security trust fund constitutes an adequate security for the class of insurance liabilities secured by the fund, regard must be had to:

(a) the arrangements relating to the establishment and operation of the fund; and

(b) any ancillary or incidental arrangements.

(3) A reference in subsection (1) to an ancillary or incidental arrangement includes a reference to an arrangement for the funding of a security trust fund.

SECT 73 Affairs of security trust fund

For the purposes of this Part, the affairs of a security trust fund include the extent to which the fund constitutes, or is likely to constitute, an adequate security for the class of insurance liabilities secured by the fund.

SECT 74 Commissioner may direct that Lloyd's underwriters must not issue or renew policies

(1) If it appears to the Commissioner that:

(a) there has been a contravention of any of the provisions of:

(i) this Division; or

(ii) Division 2 or 4; or

(b) as a result of an enactment of an Act of the United Kingdom, a substantial change is made in the constitution, powers, rights or obligations of Lloyd's or of Lloyd's underwriters; or

(c) as a result of a making of a by-law by Lloyd's, the rights or obligations of Lloyd's underwriters are substantially changed;

(d) a direction that Lloyd's underwriters must not issue policies or undertake liability under contracts of insurance;

(e) a direction that Lloyd's underwriters must not renew policies.

(a) a direction under subsection (1) has been in force for a period of more than 180 days; and

(b) Lloyd's requests the Commissioner, in writing, to review the direction;

(c) remain in force; or

(d) be varied; or

(e) be revoked.

(a) whether an investigation under Subdivision B of Division 4 is being, or has been, undertaken; and

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

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

(a) a request is made under subsection (2) 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;

(5) A Lloyd's underwriter must comply with a direction in force under subsection (1).

(6) A person who intentionally or recklessly contravenes subsection (5) is guilty of an offence punishable on conviction by a fine not exceeding 200 penalty units.

(7) A copy of a notice under subsection (1) is to be published in the Gazette .

SECT 75 Actuarial investigation of adequacy of security provided by designated security trust funds

(1) The Commissioner may, by written notice given to Lloyd's, require Lloyd's to cause an actuary to be appointed to:

(a) carry out an investigation of the extent to which a specified designated security trust fund constitutes an adequate security for the class of insurance liabilities secured by the fund; and

(b) make a report on that investigation, being a report that contains statements of the actuary's opinion about each of the matters specified in the notice.

(a) an officer of Lloyd's; or

(b) an officer of a body corporate specified in a written determination made by the Commissioner for the purposes of this paragraph.

(4) If the Commissioner notifies Lloyd's that the actuary is not acceptable to the Commissioner, Lloyd's must, within 14 days after the date on which the notice was given:

(a) cause a different actuary to be appointed; and

(b) advise the Commissioner, in writing, of the name of the actuary so appointed.

(6) Lloyd's must cause the actuary's report to be given to the Commissioner:

(a) within 30 days after the date on which the notice was given to Lloyd's under subsection (1); or

(b) within such further time as the Commissioner, by written notice, allows.

(8) Lloyd's must comply with this section.

(9) A determination under paragraph (2)(b) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .

(10) In this section:

officer , in relation to a body corporate, has the same meaning as in the Corporations Law.

SECT 76 Provision for liabilities in the accounts of designated security trust funds

(1) The Commissioner may, with the Treasurer's agreement, by written notice given to the trustee of a designated security trust fund, direct that the trustee must, within such period after the giving of the notice as is specified in the notice, make provision, or further provision, in the accounts of the fund:

(a) of a specified amount; or

(b) of an amount determined in a specified manner;

(2) The period specified in the direction must be at least 14 days.

(3) The powers of the Commissioner under this section are in addition to, and do not limit, the powers of the Commissioner under Division 4.

(4) The trustee of a designated security trust fund must comply with a direction given to the trustee under subsection (1).

(5) If:

(a) a direction under subsection (1) is in force in relation to a fund; and

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

(6) A direction given to the trustee of a designated security trust fund under subsection (1) does not require the trustee to incur any financial liability by way of funding the security trust fund.

SECT 77 Inquiries by Commissioner

(1) The Commissioner may, by written notice given to Lloyd's or the trustee of a designated security trust fund, require Lloyd's or the trustee, as the case may be, to give to the Commissioner, within such period after the giving of the notice as is specified in the notice, such information about the affairs of:

(a) in the case of a notice given to Lloyd's--a specified designated security trust fund; or

(b) in the case of a notice given to the trustee of a designated security trust fund--the fund;

(2) The period specified in the notice must be at least 14 days.

(3) A person must comply with a requirement under subsection (1).

(4) A person who intentionally or recklessly contravenes subsection (3) is guilty of an offence punishable on conviction by a fine not exceeding 200 penalty units.

SECT 78 Direction not to deal with certain assets

(1) This section applies to a designated security trust fund if the Commissioner 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) The Commissioner may, with the Treasurer's agreement, 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 46(2) of the Acts Interpretation Act 1901 .

(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 the Commissioner, in writing, to review the direction;

(c) remain in force; or

(d) be varied; or

(e) be revoked.

(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 the Commissioner considers relevant.

(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;

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

(7) A person who intentionally or recklessly contravenes subsection (6) is guilty of 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;

SECT 79 Investigation of designated security trust fund by Commissioner or inspector

(1) If it appears to the Commissioner that:

(a) a designated security trust fund does not constitute, or is unlikely to constitute, an adequate security for the class of insurance liabilities secured by the fund; or

(b) Lloyd's or the trustee of a designated security trust fund has contravened a provision of this Part;

(c) investigate the whole or any part of the affairs of the fund; or

(d) appoint a person to make such an investigation and report to the Commissioner the results of his or her investigation.

(3) If:

(a) Lloyd's fails, within the period specified in the notice, to show cause to the satisfaction of the Commissioner why an investigation should not be made; and

(b) the Commissioner is satisfied that it is in the public interest that an investigation should be made;

(c) make the investigation himself or herself; or

(d) by signed instrument, appoint a person (in this Division called the inspector ) to make the investigation.

(a) in all cases--a written notice by the Commissioner specifying the matters into which the investigation is to be made, being the whole or some part of the affairs of the trust fund; and

(b) in the case of the inspector--a copy of the instrument appointing the inspector.

(6) The inspector is taken, for the purposes of section 126, to be a member of the staff assisting the Commissioner.

SECT 80 Entry on premises

(1) If the Commissioner or the inspector, while investigating the whole or a part of the affairs of a designated security trust fund, believes on reasonable grounds that it is necessary for the purposes of the investigation to enter land or premises occupied by:

(a) the trustee, or a former trustee, of the fund; or

(b) the custodian, or a former custodian, of the fund; or

(c) the investment manager, or a former investment manager, of the fund;

(d) examine books on the land or premises that relate to the affairs of the trust fund or that the Commissioner or inspector believes on reasonable grounds relate to those affairs; and

(e) take possession of any of those books for such period as the Commissioner or inspector thinks necessary for the purposes of the investigation; and

(f) make copies of, or take extracts from, any of those books.

(3) The Commissioner or the inspector must not exercise the power conferred by subsection (1) to enter residential land or residential premises if the occupier of the land or premises has not consented to the entry.

(4) A person must not intentionally or recklessly obstruct or hinder the Commissioner or the inspector in the exercise of his or her powers under this section.

Penalty for contravention of this subsection: Imprisonment for 6 months.

SECT 81 Powers of the Commissioner or the inspector to obtain information etc.

(1) For the purposes of this section, a person is a prescribed person in relation to a designated security trust fund if:

(a) the person is, or has at any time been, the trustee, custodian or investment manager of the trust fund; or

(b) the person would be a prescribed person (within the meaning of Part V) in relation to a person referred to in paragraph (a) if it were assumed that a reference in the definition of prescribed person in subsection 50(1) to a body corporate included a reference to an individual.

(a) to produce to the Commissioner or the inspector any or all of the books relating to the affairs of the fund that are in the custody or under the control of the person; or

(b) to give to the Commissioner or the inspector all reasonable assistance in connection with the investigation; or

(c) to appear before the Commissioner or the inspector for examination concerning matters relevant to the investigation.

(a) the Commissioner or the inspector may take possession of them for such period as the Commissioner or inspector thinks necessary for the purposes of the investigation; and

(b) the Commissioner or inspector may make copies of, and take extracts, from them.

(4) A person who complies with a requirement of the Commissioner or the inspector under this section does not incur any liability to any other person only because of that compliance.

SECT 82 Persons to comply with requirements of the Commissioner or the inspector

(1) A person must not intentionally or recklessly contravene a requirement of the Commissioner or the inspector under section 81 that is applicable to the person, to the extent to which the person is able to comply with it.

Penalty: Imprisonment for 6 months.

Penalty: Imprisonment for 6 months.

(4) However, if the answer might tend to incriminate the person, none of the following:

(a) the question;

(b) the answer;

(c) any information, document or thing obtained as a direct or indirect consequence of giving the answer;

SECT 83 Person may be represented by a legal practitioner

A barrister or solicitor acting for a person being examined by the Commissioner or the inspector:

(a) may attend the examination; and

(b) may, to the extent that the Commissioner or the inspector allows:

(i) address the Commissioner or the inspector; or

(ii) examine the person;

in relation to matters in respect of which the Commissioner or the inspector has questioned the person.

SECT 84 Notes of examination of person

(1) The Commissioner or the inspector may cause notes of an examination of a person under this Division to be recorded in writing and read to or by that person.

(2) The Commissioner or the inspector may require the person to sign the notes.

(3) Notes signed by the person may be used in evidence in proceedings under this Act against the person. This rule has effect subject to subsections 82(3) and (4).

(4) A copy of the notes signed by the person are to be given to the person without charge if the person makes a written request to the Commissioner or the inspector for a copy.

(5) If the inspector causes notes to be recorded under this section, the notes must be given to the Commissioner with the report of the investigation concerned.

SECT 85 Delegation

(1) The Commissioner or the inspector may, by signed instrument, delegate to a member of the staff assisting the Commissioner any or all of his or her powers under this Division.

(2) A delegate must, on the request of the trustee of a designated security trust fund in relation to which the delegated powers are exercisable or of a person affected by the exercise of those powers, produce the instrument of delegation, or a copy, for inspection.

SECT 86 Report of the Commissioner or the inspector

(1) The inspector:

(a) may make one or more reports in writing to the Commissioner during the investigation of the whole or a part of the affairs of the trust fund and must, if so directed in writing by the Commissioner, make such reports as are specified in the direction; and

(b) must, on the completion or termination of the investigation, report in writing to the Commissioner on the result of the investigation.

(3) A report made on the completion of the investigation must include:

(a) a statement of the opinion of the Commissioner or the inspector in relation to the extent to which the fund constitutes an adequate security for the class of insurance liabilities secured by the fund; and

(b) the recommendations of the Commissioner or the inspector in relation to the following:

(i) whether a notice should be given under subsection 93(2);

(ii) whether an application should be made under subsection 88(1).

(a) a recommendation relating to the institution of criminal proceedings; or

(b) a statement to the effect that, in his or her opinion, a specified person has committed a criminal offence.

(6) The Commissioner must give a copy of a report made by or given to the Commissioner under this section to Lloyd's and the trustee of the fund concerned. This subsection has effect subject to subsection (7).

(7) The Commissioner:

(a) must seek the advice of the Attorney-General before giving a copy of the report to Lloyd's or the trustee; and

(b) must not give a copy of the report to Lloyd's or the trustee if the Attorney-General advises the Commissioner that, having regard to proceedings that have been or might be instituted, a copy of the report should not be given to Lloyd's or the trustee.

(9) A court before which proceedings (whether under this Act or otherwise) are brought against a person in respect of matters dealt with in a report under this Division may order that a copy of the report be given to the person.

SECT 87 Offences

A person must not, with intent to defeat the purposes of this Division or with intent to delay or obstruct the carrying out of an investigation under this Division:

(a) conceal, destroy, mutilate or alter a book relating to the affairs of a trust fund the affairs of which are being investigated under this Division; or

(b) send, cause to be sent, or conspire with another person to send, out of Australia a book or any money or property belonging to or under the control of the trustee of such a trust fund.

Penalty: Imprisonment for 6 months.

SECT 88 Application for order for judicial trusteeship

(1) The Commissioner may apply to the Federal Court for an order that a designated security trust fund be placed under judicial trusteeship.

(2) A party to the trust deed of a designated security trust fund may apply to the Federal Court for an order that the fund be placed under judicial trusteeship.

(3) A person is not entitled to make an application under subsection (2) unless:

(a) the person has given the Commissioner at least one month's notice in writing of the person's intention to apply; or

(b) the Federal Court grants leave to make the application.

(a) Lloyd's; and

(b) a party to the fund's trust deed;

(5) On an application by a party to the fund's trust deed:

(a) the Commissioner; and

(b) any other party to the trust deed;

SECT 89 Grounds for order for judicial trusteeship

(1) On an application under section 88, the Federal Court may make an order that a designated security trust fund be placed under judicial trusteeship if the Federal Court is satisfied:

(a) that the whole or a part of the affairs of the fund have been investigated under Division 4; and

(b) that, having regard to the results of the investigation, it is in the interests of the holders of contracts of insurance covered by the fund that the order be made.

(a) the Federal Court is satisfied:

(i) that section 93 has ceased to have effect; or

(ii) that Lloyd's has contravened section 68; or

(iii) that the trustee of the fund has contravened section 70; or

(iv) that there are reasonable grounds for believing that the management or financial position of the fund may be unsatisfactory; or

(v) that the time needed to make or complete an investigation of the whole or part of the affairs of the fund under Division 4 would be likely to be such as to prejudice the interests of holders of contracts of insurance covered by the fund; and

(b) the Federal Court is satisfied that it is in the interests of the holders of contracts of insurance covered by the fund that the order be made.

SECT 90 Commencement of judicial trusteeship

The judicial trusteeship of a designated security trust fund commences:

(a) on the day specified in the order for judicial trusteeship as the day on which judicial trusteeship is to commence; or

(b) if no day is so specified--when the order is made.

SECT 91 Stay of proceedings during judicial trusteeship

(1) While a designated security trust fund is under judicial trusteeship, a proceeding in a court against the trustee of the fund or in relation to any of the property of the fund cannot be proceeded with, except:

(a) with the judicial trustee's written consent; or

(b) with the leave of the Federal Court and in accordance with such terms (if any) as the Federal Court imposes.

(3) A judicial trustee is not subject to any liability in respect of a refusal to give a consent for the purposes of subsection (1).

SECT 92 Appointment of judicial trustee

(1) If the Federal Court orders the judicial trusteeship of a designated security trust fund, the court must, by its order:

(a) if there is already a trustee of the fund--remove the trustee of the fund; and

(b) appoint an individual as the trustee of the fund while the fund remains under judicial trusteeship.

(2) The Court may at any time cancel the appointment of a judicial trustee and appoint another individual as judicial trustee.

(3) This Act does not prevent the Federal Court from appointing the same individual to be the judicial trustee of 2 or more security trust funds.

(4) Only an individual who is an official liquidator may be appointed as a judicial trustee.

(5) In this section:

official liquidator has the same meaning as in the Corporations Law.

SECT 92A Terms and conditions of appointment of judicial trustee

(1) The Federal Court may determine the terms and conditions of the appointment of the judicial trustee, including fees.

(2) The determination has effect despite anything in:

(a) any other provision of this Act; and

(b) an instrument under this Act; and

(c) any other law; and

(d) the trust deed relating to the fund concerned.

(4) Subsection (3) does not limit subsection (1).

SECT 92B Property vesting orders

(1) If an individual is appointed as judicial trustee of a designated security trust fund, the Federal Court must make a written order vesting the property of the fund in the judicial trustee.

(2) If the appointment of the judicial trustee comes to an end (otherwise than because of the winding-up of the fund) the Federal Court must make an order vesting the property of the fund in:

(a) if there is to be a fresh judicial trustee--the fresh judicial trustee; or

(b) if the appointment comes to an end because the judicial trusteeship of the fund is cancelled--the person who, upon that cancellation, becomes the trustee of the fund.

(a) if the property was vested in law in the trustee--the property immediately vests in law in the person named in the order by force of this Act; and

(b) if the property was vested in equity in the trustee--the property immediately vests in equity in the person named in the order by force of this Act.

(5) If:

(a) the property is of a kind whose transfer or transmission may be registered under a law of the Commonwealth, of a State or of a Territory; and

(b) that law enables the registration of such an order;

(6) If:

(a) the property is of a kind whose transfer or transmission may be registered under a law of the Commonwealth, of a State or of a Territory; and

(b) that law enables the person named in the order to be registered as the owner of that property;

SECT 92C Powers of judicial trustee

While an individual is judicial trustee:

(a) the individual has and may exercise all the rights, title and powers, and must perform all the functions and duties, of the trustee; and

(b) the fund's trust deed, this Act, a legislative instrument under this Act and any other law, apply in relation to the individual as if the individual were the trustee.

SECT 92D Court's control of judicial trustee

(1) A judicial trustee is subject to the control of the Federal Court.

(2) In addition to duties imposed by this Division, a judicial trustee has such duties as the Federal Court directs.

(3) A judicial trustee may apply to the Federal Court at any time for instructions:

(a) as to the way in which the judicial trusteeship should be conducted; or

(b) in relation to any matter arising during the judicial trusteeship.

(a) inform the Commissioner that he or she intends to make the application; and

(b) give the Commissioner written details of the application.

(6) The Federal Court must not give a direction or an instruction under this section that is inconsistent with the fund's trust deed.

SECT 92E Direction not to deal with certain assets

(1) If:

(a) a designated security trust fund is under judicial trusteeship; and

(b) the Federal Court is satisfied that it is in the interests of the holders of contracts of insurance covered by the fund to make an order under this subsection;

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

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

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

SECT 92F Provision for liabilities in the accounts of designated security trust funds

(1) If:

(a) a designated security trust fund is under judicial trusteeship; and

(b) the Federal Court is satisfied that it is in the interests of the holders of contracts of insurance covered by the fund to make an order under this subsection;

(c) of a specified amount; or

(d) of an amount determined in a specified manner;

(2) The Federal Court may rescind or vary an order under subsection (1).

(3) An order under subsection (1) does not require the judicial trustee to incur any financial liability by way of funding the security trust fund.

SECT 92G Application by Commissioner for instructions to judicial trustee

(1) The Commissioner may apply to the Federal Court for an order that the Federal Court give instructions to the judicial trustee relating to the conduct of the judicial trusteeship of a designated security trust fund.

(2) The judicial trustee is entitled to be heard on the application.

(3) A party to the fund's trust deed is entitled to be heard on the application.

SECT 92H Request by Commissioner for information

(1) The Commissioner may ask a judicial trustee for information about the conduct of the judicial trusteeship.

(2) The judicial trustee must comply with the Commissioner's request.

SECT 92J Duration of judicial trusteeship

If the Federal Court orders that a designated security trust fund be placed under judicial trusteeship, the fund remains under judicial trusteeship until:

(a) the judicial trusteeship is cancelled; or

(b) the fund is wound up.

SECT 92K Cancellation of judicial trusteeship

(1) A judicial trustee appointed in relation to a designated security trust fund may apply to the Federal Court for an order cancelling the judicial trusteeship.

(2) Any other interested person may apply to the Federal Court for an order cancelling the judicial trusteeship of a designated security trust fund.

(3) On an application under subsection (1) or (2), the Federal Court may cancel the order for the judicial trusteeship of the fund if it appears to the Court:

(a) that the purpose of the order has been fulfilled; or

(b) that for any reason it is undesirable that the order remain in force.

(a) upon the cancellation taking effect, a qualified corporation will become the trustee of the fund; and

(b) if an instrument under subsection 68(1) requires the trustee to be approved by the Commissioner--the trustee has been approved by the Commissioner.

(a) inform the Commissioner that the trustee or person intends to make the application; and

(b) give the Commissioner written details of the application.

SECT 92L Report by judicial trustee

(1) As soon as practicable after becoming the judicial trustee of a designated security trust fund, the judicial trustee must file with the Federal Court a report that:

(a) recommends the course of action that is, in his or her opinion, most advantageous to the interests of the holders of contracts of insurance covered by the fund; and

(b) sets out the reasons for that recommendation.

(3) A report, or a copy of a report, under this section must be available for inspection by any person:

(a) at the Registry of the Federal Court in which the report is filed, during the business hours of that Registry; and

(b) at such other place (if any) as the Commissioner determines.

SECT 92M Judicial trustee may formulate a scheme for the winding-up or dissolution, or both, of a designated security trust fund

(1) The judicial trustee of a designated security trust fund may, by writing, formulate a scheme for the winding-up or dissolution, or both, of the fund.

(2) The scheme must be consistent with any principles that are set out in the fund's trust deed for the purposes of this section.

(3) The scheme may make provision for and in relation to the following matters:

(a) empowering the judicial trustee to make written determinations about the following matters:

(i) whether the fund has a liability to a holder of a contract of insurance covered by the fund;

(ii) if the fund has such a liability--the amount of that liability;

(b) requiring notification of determinations referred to in paragraph (a) to be given to affected holders of contracts of insurance covered by the fund;

(c) providing that, for the purposes of the winding-up of a fund:

(i) the trustee of the fund is taken to have a liability for the amount specified in the determination to the person to whom the determination relates; and

(ii) that person is to be bound by the judicial trustee's determination;

(d) the manner in which the assets of the fund are to be applied, in a winding-up of the fund, to discharge liabilities of the fund.

(5) Despite paragraph (3)(c), a person who is notified of an amount as mentioned in paragraph (3)(b) may dispute the amount:

(a) in accordance with the Rules of Court of the Federal Court; or

(b) as the Federal Court otherwise directs in the particular case.

(7) A scheme formulated under this section has no effect unless it is approved by the Federal Court on the application of the judicial trustee of the fund concerned.

(8) The Federal Court must not approve a scheme formulated under this section unless the Court is satisfied that the scheme is in the interests of the holders of contracts of insurance covered by the fund concerned.

(9) A designated security trust fund must not be wound up or dissolved except in accordance with a scheme formulated under this section.

(10) The Commissioner and any person interested are entitled to be heard on an application under subsection (7).

SECT 92N Resignation

(1) A judicial trustee appointed under this Division may resign that appointment by filing with the Federal Court a notice of resignation.

(2) Within 28 days after the day on which the notice of resignation was filed with the Federal Court, the Court must:

(a) accept the resignation; and

(b) appoint another individual as judicial trustee.

SECT 92P Indemnity

A judicial trustee is not subject to any liability to any person in respect of anything done, or omitted to be done, in good faith in the exercise of the performance of powers, functions or duties conferred or imposed on the judicial trustee by this Act.

SECT 92Q Security deposit

(1) Lloyd's must, within 28 days after the commencement of this section, deposit with the Treasurer securities of the Commonwealth the value of which as at that commencement is not less than $2,000,000.

(2) If, at the end of a calendar year, the value of the securities deposited in accordance with this section falls short of $2,000,000, Lloyd's must, within 28 days after the end of that year, deposit with the Treasurer securities of the Commonwealth the value of which as at the end of that year was not less than the amount of the shortfall.

(3) An obligation imposed on Lloyd's by subsection (1) or (2) may be discharged by a company nominated in a written notice given by Lloyd's to the Commissioner.

(4) The deposit of securities with the Treasurer in accordance with this section is effective to transfer the legal and beneficial interest in the securities to the Commonwealth.

(5) If interest is derived on securities deposited with the Treasurer in accordance with this section, the Treasurer must authorise the payment of an amount equal to that interest by the Commonwealth to:

(a) Lloyd's; or

(b) if a company nominated by Lloyd's deposited those securities--that company.

(6) If, at the end of a calendar year, the value of the securities deposited in accordance with this section exceeds $2,000,000, the Treasurer must, after receiving a written request from Lloyd's, return to:

(a) Lloyd's; or

(b) if a company nominated by Lloyd's deposited those securities--that company;

(c) a direction is in force under section 74 or 78; or

(d) a determination is in force under section 93; or

(e) a designated security trust fund is under judicial trusteeship.

(7) For the purposes of this section, if securities are listed on the official list of a securities exchange in Australia, the value of those securities at a particular time is a reference to the value of those securities on that day worked out by reference to that securities exchange and:

(a) by reference to:

(i) the sale of securities of the same class last recorded before that time by the securities exchange; or

(ii) the selling offer for securities of the same class last recorded before that time by the securities exchange;

whichever is less; or

(b) by reference to the buying bid for securities of the same class last recorded before that time by the securities exchange;

SECT 92R Application of security deposit--costs of judicial trusteeship of designated security trust fund

(1) The securities lodged with the Treasurer under section 92Q are available to discharge any expenses that are directly attributable to the judicial trusteeship of a designated security trust fund under this Division.

(2) The Treasurer may apply the securities in discharge of those expenses.

(3) The expenses referred to in subsection (1) include, but are not limited to:

(a) expenses incurred in connection with an application made by the Commissioner under this Division; and

(b) expenses incurred in connection with the Commissioner being heard before the Federal Court under this Division; and

(c) the payment of the fees of a judicial trustee.

SECT 92S Return of security deposit

(1) If:

(a) section 93 has ceased to have effect; and

(b) the Treasurer is satisfied that there are no outstanding liabilities of Lloyd's underwriters that are covered by any designated security trust fund;

(c) Lloyd's; or

(d) if a company nominated by Lloyd's deposited securities with the Treasurer under section 92Q--that company;

(2) In this section:

Lloyd's underwriter includes:

(a) a former Lloyd's underwriter; and

(b) the legal personal representative of a Lloyd's underwriter or a former Lloyd's underwriter.

Omit ", or failure to comply with,".

7 Paragraph 93(2)(a)

Omit "the Schedule", substitute "Division 2, 3 or 4".

8 Paragraph 93(2)(b)

Omit "Imperial Act", substitute "Act of the United Kingdom".

9 Subsections 93(2), (3), (6) and (7)

Omit "this Part", substitute "this section".

10 Subsection 93(10)

Omit "this Part" (first occurring), substitute "this section".

11 Paragraph 93(10)(a)

Omit "this Part", substitute "this section".

12 At the end of paragraph 93(10)(a)

Add "and".

13 Paragraph 93(10)(b)

Repeal the paragraph.

14 Paragraph 93(10)(c)

Omit "this Part", substitute "this section".

15 After section 93

Insert:

16 Section 94

Repeal the section, substitute:

SECT 94 Trustee of designated security trust fund not to be treated as carrying on insurance business

To avoid doubt, the trustee of a designated security trust fund is not guilty of an offence against section 21 only because the trustee does an act in the capacity of trustee.

SECT 94A Injunctions

(1) If the trustee of a designated security trust fund has engaged, is engaging, or proposes to engage, in any conduct in contravention of this Part or the fund's trust deed, the Federal Court may, on the application of the Commissioner, grant an injunction:

(a) restraining the trustee from engaging in the conduct; or

(b) if the Court thinks it desirable to do so, requiring the trustee to do a particular act.

(3) The Court may grant an interim injunction pending the determination of an application.

(4) The Court may discharge or vary an injunction granted under subsection (1) or (2).

(5) The Commissioner cannot be required, as a condition of the grant of an interim injunction, to give an undertaking as to damages.

(6) The power of the Court to grant an injunction restraining a trustee from engaging in conduct may be exercised:

(a) whether or not it appears to the Court that the trustee intends to engage again, or to continue to engage, in conduct of that kind; and

(b) whether or not the trustee has previously engaged in conduct of that kind.

(8) The powers conferred on the Court by this section are in addition to, and not instead of, any other powers of the Court.

17 Sections 95, 96 and 97

Repeal the sections, substitute:

SECT 95 Agent of Lloyd's

(1) Lloyd's must at all times be represented for the purposes of this Act by an individual resident in Australia and appointed by Lloyd's as the agent of Lloyd's for the purposes of this Act.

(2) Subsections 118(2) to (5) (inclusive) apply to Lloyd's in a corresponding way to the way in which they apply to a body corporate of the kind referred to in subsection 118(1).

(3) Subsections 118(2) to (5) (inclusive) apply to an appointment under subsection (1) of this section in a corresponding way to the way in which they apply to an appointment under subsection 118(1).

(4) Anything done in his or her representative capacity by a person appointed by Lloyd's as, or to act as, its agent in accordance with this section (including section 118 as applied by this section) is taken, for the purposes of this Part, to have been done by Lloyd's. However this subsection does not affect any liability of the agent under this Part.

SECT 96 Address for service

(1) Lloyd's must at all times have an address in Australia for service for the purposes of this Act.

(2) The address does not become the address for service of Lloyd's until Lloyd's has given notice in writing of the address to the Commissioner. An address so notified continues to be the address for service of Lloyd's until another address has been so notified.

SECT 97 Lloyd's to give notice of by-laws

If:

(a) an Act of the United Kingdom is enacted relating specifically to Lloyd's; or

(b) a by-law is made under the Acts of the United Kingdom known as Lloyd's Acts 1871-1951 or any later Act of the United Kingdom relating to Lloyd's;

18 Section 120

Omit "Part VII", substitute "section 93".

Note: The heading to section 120 of the Insurance Act 1973 is altered by omitting " Part VII " and substituting " section 93 ".

Omit "that Part", substitute "section 93".

20 Subsection 121(1)

Omit ", except Part VII,".

21 Paragraph 121(1)(c)

After "case of a body corporate", insert "(other than Lloyd's)".

22 At the end of subsection 121(1)

Add:

; or (d) in the case of Lloyd's, by leaving it at the address for service notified to the Commissioner in accordance with section 96 or by sending it by registered post to Lloyd's at that address.

Before "105(15)" (wherever occurring), insert "70(9), 74(6), 77(4), 78(7), 80(4), 82(1), 82(2),".

24 Schedule

Repeal the Schedule.

25 Transitional--statutory deposit

(1) This item applies to any securities held by the Treasurer in accordance with paragraph 1 of the Schedule to the Insurance Act 1973 immediately before the commencement of this item.

(2) Sections 92Q and 92S of the Insurance Act 1973 have effect as if those securities had been deposited under section 92Q of that Act, immediately after the commencement of this item, by:

(a) Lloyd's; or

(b) if a company is nominated in a written notice given by Lloyd's to the Commissioner--that company.

(1) This item applies to anything done by Lloyd's in accordance with paragraph 6 or 7 of the Schedule to the Insurance Act 1973 before the commencement of this item.

(2) The Insurance Act 1973 has effect, after the commencement of this item, as if those things had been done by Lloyd's in accordance with section 95 or 96, as the case may be, of that Act.

27 Transitional--exercise of approval powers between Royal Assent and commencement

If:

(a) in accordance with section 4 of the Acts Interpretation Act 1901 , an instrument is made under section 68 or 70 of the Insurance Act 1973 before the commencement of item 5; and

(b) the instrument is expressed to confer power on the Commissioner to give an approval;

Insurance (Agents and Brokers) Act 1984

28 Section 9

Insert:

Lloyd's underwriter has the same meaning as in the Insurance Act 1973 .

29 Section 9 (definition of unauthorised foreign insurer )

Repeal the definition, substitute:

unauthorised foreign insurer means:

(a) an insurer who:

(i) does not have an authority under the Insurance Act 1973 to carry on insurance business; and

(ii) is not a person who, because of section 5 of that Act, is not required to have such an authority; and

(iii) carries on insurance business outside Australia and the external Territories to which the Insurance Act 1973 extends; or

(b) if a direction is in force under section 74 the Insurance Act 1973 --a Lloyd's underwriter.

30 Section 3 (paragraph (b) of the definition of leviable day )

Omit "Part VII", substitute "section 93".

31 Paragraph 6(2)(a)

Repeal the paragraph, substitute:

(a) that consists of a calendar year; and

Repeal the paragraph, substitute:

(a) the 30 April next following the end of that period;