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New South Wales
Insurance (Policyholders Protection)
Legislation Amendment Bill 2001
Contents
Page
1 Name of Act 2
2 Commencement 2
3 Amendment of Insurance Protection Tax Act 2001 2
4 Amendment of Home Building Act 1989 No 147 2
5 Amendment of Motor Accidents Compensation Act 1999
No 41 2
6 Consequential amendments of other Acts and instruments 2
Schedules
1 Amendment of Insurance Protection Tax Act 2001 3
2 Amendment of Home Building Act 1989 7
3 Amendment of Motor Accidents Compensation Act 1999 22
4 Consequential amendments of other Acts and instruments 24
I certify that this PUBLIC BILL, which originated in the LEGISLATIVE ASSEMBLY, has
finally passed the LEGISLATIVE COUNCIL and the LEGISLATIVE ASSEMBLY of NEW
SOUTH WALES.
Clerk of the Legislative Assembly.
Legislative Assembly,
Sydney, , 2001
New South Wales
Insurance (Policyholders Protection)
Legislation Amendment Bill 2001
Act No , 2001
An Act to amend the Insurance Protection Tax Act 2001, the Home Building
Act 1989 and the Motor Accidents Compensation Act 1999 to make provision for
the protection of policyholders of insolvent insurers; and for other purposes.
I have examined this Bill, and find it to correspond in all respects with the Bill as
finally passed by both Houses.
Chairman of Committees of the Legislative Assembly.
Clause 1 Insurance (Policyholders Protection) Legislation Amendment Bill 2001
The Legislature of New South Wales enacts:
1 Name of Act
This Act is the Insurance (Policyholders Protection) Legislation
Amendment Act 2001.
2 Commencement
This Act commences on 30 June 2001.
3 Amendment of Insurance Protection Tax Act 2001
The Insurance Protection Tax Act 2001 is amended as set out in
Schedule 1.
4 Amendment of Home Building Act 1989 No 147
The Home Building Act 1989 is amended as set out in Schedule 2.
5 Amendment of Motor Accidents Compensation Act 1999 No 41
The Motor Accidents Compensation Act 1999 is amended as set out in
Schedule 3.
6 Consequential amendments of other Acts and instruments
The Act and instrument specified in Schedule 4 are amended as set out
in that Schedule.
Page 2
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Insurance Protection Tax Act 2001 Schedule 1
Schedule 1 Amendment of Insurance Protection Tax
Act 2001
(Section 3)
[1] Section 3 Definitions
Insert in alphabetical order:
Policyholders Protection Fund means the Policyholders
Protection Fund established under section 16B.
[2] Part 3A
Omit section 16. Insert instead:
Part 3A Policyholders Protection Fund
16 Definitions
In this Part:
Building Insurers' Guarantee Fund means the Fund
established under section 103P of the Home Building Act 1989.
declared insolvent insurer means an insurer to which an order
of the Treasurer in force under section 16A relates.
Guarantee Corporation means the Building Insurers'
Guarantee Corporation constituted under Part 6A of the Home
Building Act 1989.
Nominal Defendant means the Nominal Defendant within the
meaning of the Motor Accidents Compensation Act 1999.
Nominal Defendant's Fund means the Fund established by
section 40 of the Motor Accidents Compensation Act 1999.
third-party policy means a third-party policy within the
meaning of Part 7.3 of the Motor Accidents Compensation
Act 1999.
Page 3
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 1 Amendment of Insurance Protection Tax Act 2001
16A Declaration of insolvent insurers
(1) If the Treasurer is satisfied that a liquidator or provisional
liquidator has been appointed in respect of an insurer, or that an
insurer has been dissolved, the Treasurer may, by order
published in the Gazette, declare that the insurer is a declared
insolvent insurer for the purposes of this Part.
(2) The following insurers are taken to have been declared by
order under this section to be declared insolvent insurers for the
purposes of this Part on 15 March 2001 (the date on which a
provisional liquidator was appointed in respect of those
insurers):
(a) HIH Casualty and General Insurance Limited,
(b) FAI General Insurance Company Limited,
(c) CIC Insurance Limited.
16B Policyholders Protection Fund
(1) There is established in the Special Deposits Account a
Policyholders Protection Fund.
(2) The following is to be paid into the Fund:
(a) money appropriated by Parliament to the Fund under
section 16C,
(b) money required to be paid into the Fund from the
Building Insurers' Guarantee Fund in accordance with
section 16F,
(c) money required to be paid into the Fund from the
Nominal Defendant's Fund in accordance with
section 16G,
(d) any gift or bequest of money for the purposes of the
Fund,
(e) any money appropriated by Parliament for the purposes
of the Fund,
(f) any other money required by law to be paid into the
Fund.
Page 4
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Insurance Protection Tax Act 2001 Schedule 1
(3) The following is to be paid from the Fund:
(a) money required to be paid from the Fund into the
Building Insurers' Guarantee Fund in accordance with
section 16D,
(b) money required to be paid from the Fund into the
Nominal Defendant's Fund in accordance with
section 16E,
(c) money to be paid from the Fund into the Consolidated
Fund in accordance with section 16H,
(d) any other money required by law to be paid from the
Fund.
16C Tax to be paid into Policyholders Protection Fund
(1) There is appropriated by this section for payment out of the
Consolidated Fund into the Policyholders Protection Fund all
amounts received in payment of tax under this Act.
(2) There is payable out of the Policyholders Protection Fund such
amounts as may become payable under this Act by way of
refunds of tax.
16D Application of Policyholders Protection Fund--claims under
home building insurance contracts of insolvent insurers
(1) The Policyholders Protection Fund must be applied to meet
expenditure from the Building Insurers' Guarantee Fund in
connection with contracts of insurance entered into by declared
insolvent insurers.
(2) All payments made from the Policyholders Protection Fund
under this section are to be made in the amounts, on the
conditions and at the times determined by the Treasurer.
16E Application of Policyholders Protection Fund--claims under
third-party motor accident policies of insolvent insurers
(1) The Policyholders Protection Fund must be applied to meet
expenditure from the Nominal Defendant's Fund in connection
with third-party policies issued by declared insolvent insurers.
(2) All payments made from the Policyholders Protection Fund
under this section are to be made in the amounts, on the
conditions and at the times determined by the Treasurer.
Page 5
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 1 Amendment of Insurance Protection Tax Act 2001
16F Repayments to Policyholders Protection Fund
If the Treasurer determines that any money in the Building
Insurers' Guarantee Fund is not needed for payments in
connection with contracts of insurance entered into by declared
insolvent insurers, the money is to be paid from that Fund into
the Policyholders Protection Fund in accordance with
arrangements made between the Treasurer and the Guarantee
Corporation.
16G Repayments to Policyholders Protection Fund--money
recovered from motor accident insolvent insurers and re-
insurers
(1) This section applies in relation to money recovered by the
Nominal Defendant:
(a) from a re-insurer under section 191 of the Motor
Accidents Compensation Act 1999 in connection with a
third-party policy issued by a declared insolvent insurer,
or
(b) in connection with the winding up of a declared
insolvent insurer.
(2) If the Treasurer determines that any money to which this
section applies is not needed for payments in connection with
third-party policies issued by declared insolvent insurers, the
money is to be paid from the Nominal Defendant's Fund into
the Policyholders Protection Fund in accordance with
arrangements made between the Treasurer and the Nominal
Defendant.
16H Policyholders Protection Fund to reimburse additional money
advanced from Consolidated Fund
If the Treasurer determines that money standing to the credit of
the Policyholders Protection Fund is not needed for payments
to the Building Insurers' Guarantee Fund or the Nominal
Defendant's Fund in accordance with this Part, the Treasurer
may pay an amount of money from the Policyholders
Protection Fund (up to the amount advanced to the
Policyholders Protection Fund by the Treasurer) into the
Consolidated Fund.
Page 6
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
Schedule 2 Amendment of Home Building Act 1989
(Section 4)
[1] Part 6A
Insert after Part 6:
Part 6A Insolvent insurers
Division 1 Preliminary
103F Interpretation
(1) In this Part:
beneficiary means a person covered by an indemnity from the
State under Division 2.
builder means a contractor or supplier (within the meaning of
Part 6), an owner-builder or person who does residential
building work otherwise than under a contract.
developer has the same meaning as in Part 6.
Guarantee Corporation means the Building Insurers'
Guarantee Corporation constituted under Division 3.
insolvent insurer means an insurer to whom:
(a) an order of the Treasurer in force under section 16A of
the Insurance Protection Tax Act 2001 relates, or
(b) an order of the Minister in force under section 103G
relates.
Note. See also section 16A (2) of the Insurance Protection Tax Act 2001
in relation to HIH companies.
insolvent insurer's policy means a contract of insurance,
required under Part 6, that has been entered into by an insolvent
insurer, whether before or after the insurer became an insolvent
insurer.
Page 7
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
insurer means an insurer approved by the Minister under
section 103A of this Act (an approved insurer) or a former
approved insurer, but does not include an insolvent insurer.
liquidator includes a provisional liquidator.
(2) In this Part, a reference to a liquidator or to a provisional
liquidator includes a reference to a liquidator or a provisional
liquidator appointed outside New South Wales.
(3) So far as the legislative power of Parliament permits, the
liquidator of an insolvent insurer has outside New South Wales
the functions conferred or imposed on the liquidator by this
Part, in addition to having those functions within New South
Wales.
(4) This Part has effect despite any provisions of the Corporations
(New South Wales) Act 1990 or of the applicable provisions (as
defined in that Act) of the State.
103G Insolvent insurers
If the Minister is satisfied that a liquidator or provisional
liquidator has been appointed in respect of an insurer, or that an
insurer has been dissolved, the Minister may with the approval
of the Treasurer, by order published in the Gazette, declare that
the insurer is an insolvent insurer for the purposes of this Part.
Note. Declared insolvent insurers under the Insurance Protection Tax
Act 2001 are also insolvent insurers for the purposes of this Part. See the
definition of insolvent insurer in section 103F of this Act.
103H Transitional--payments made by State before commencement
of this Part
Any payments made by the State in respect of an insolvent
insurer's policy relating to any such insurer, any assignment
given by a person to whom the payment was made and any
other related action taken after 15 March 2001 and before the
commencement of this Part are taken to have been made, given
or taken under this Part.
Page 8
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
Division 2 Insurance claims indemnified by State
103I Indemnity
(1) Subject to this Part, the State must indemnify any person:
(a) who is entitled to recover an amount under a contract of
insurance entered into under Part 6 in connection with
any matter, and
(b) who is covered by an insolvent insurer's policy,
to the extent of the amount that the person is entitled to recover
under that policy in connection with that matter.
(2) The following provisions apply to that indemnity:
(a) the builder to which the policy relates is not entitled to
the indemnity,
(b) a developer to which the policy relates, or a company
related, within the meaning of the Corporations Law, to
a developer, is not entitled to the indemnity,
(c) the indemnity does not apply in connection with any
matter that is covered by another contract of insurance
that is not an insolvent insurer's policy,
(d) the indemnity does not apply in connection with any
matter if a claim has been made under an insolvent
insurer's policy in respect of the matter and payment in
full has been received by the claimant or the matter has
been otherwise settled,
(e) the indemnity does not apply in connection with any
matter if:
(i) a claim in respect of the matter has been
determined by the Tribunal or a court not to be
a valid claim under an insolvent insurer's policy,
and
(ii) the claimant is not entitled to bring any further
proceedings to appeal against or seek a review of
that determination,
(f) unless the regulations otherwise provide, the indemnity
does not apply in connection with any matter covered
by an insolvent insurer's policy issued by HIH Casualty
Page 9
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
and General Insurance Limited or FAI General
Insurance Company Limited if:
(i) in a case where section 92 or 93 required a
person to be provided with a certificate of
insurance evidencing the insolvent insurer's
policy--the certificate of insurance relating to
the matter was provided to the person after 20
June 2001, or
(ii) in a case where an owner-builder obtained a
certificate of insurance evidencing the insolvent
insurer's policy in order to comply with the
requirements of section 95--the certificate of
insurance relating to the matter was provided to
the owner-builder after 15 March 2001, or
(iii) in a case where section 96 (1) required a person
to ensure a contract of insurance was in force to
enable the person to do residential building
work--the certificate of insurance evidencing
the insolvent insurer's policy relating to the
work was issued, or the work commenced, or
both, after 20 June 2001,
(g) the indemnity does not apply in connection with any
matter or other circumstance prescribed by the
regulations.
(3) If a claim has been made under an insolvent insurer's policy in
connection with any matter and settlement has been reached or
a determination has been made by the Tribunal or a court in
respect of the claim:
(a) the amount for which an indemnity is provided by the
State under this section in connection with that matter is
the amount so agreed in the settlement or determined by
the Tribunal or the court, and
(b) the amount for which an indemnity is provided by the
State under this section in connection with that matter is
reduced by any amount paid by the insolvent insurer or
a liquidator of the insolvent insurer to the claimant in
respect of the claim on the insolvent insurer's policy.
Note. The person who is covered by the indemnity under this section is
called the beneficiary in this Part (see section 103F).
Page 10
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
103J Enforcement of indemnity provided by State
The indemnity provided by the State under this Division may
only be enforced by a claim made to, and proceedings taken
against, the Guarantee Corporation.
103K Making claim under indemnity
(1) A claim by a beneficiary under the indemnity provided by this
Division is to be made to the Guarantee Corporation in
accordance with the procedures approved under this section.
(2) The claim may be made in respect of any matter whether or not
a claim in respect of that matter has been made against an
insolvent insurer or a liquidator of an insolvent insurer or any
other person.
(3) The Guarantee Corporation may from time to time approve of
procedures for the making, handling and resolution of claims.
(4) Without limiting subsection (3), the Guarantee Corporation
may approve as part of those procedures:
(a) the requirement that a claim be made in a particular
way, and
(b) the requirement that a claim be made within a particular
time, and
(c) the requirement that the claimant provide particular
information, and
(d) the requirement that the claimant verify any information
by statutory declaration.
(5) A person must not make a statement in relation to the making
of a claim under this Part that the person knows is false or
misleading.
Maximum penalty (subsection (5)): 100 penalty units.
103L Payment of claims
If the Guarantee Corporation accepts a claim by a beneficiary,
the Guarantee Corporation must pay to the beneficiary (or a
person nominated by the beneficiary) out of the Building
Insurers' Guarantee Fund the amount assessed by the
Guarantee Corporation as payable under the indemnity
provided by this Division.
Page 11
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
103M Assignment of rights
(1) Where the Guarantee Corporation pays an amount to a
beneficiary (or a person nominated by a beneficiary) under the
indemnity provided by this Division, the beneficiary is taken to
have assigned the beneficiary's rights in respect of the matter
covered by the indemnity to the Guarantee Corporation.
(2) The Guarantee Corporation may enforce the rights assigned to
it under this section as if those rights had been personally
assigned by the beneficiary.
(3) The regulations may make provision for or with respect to
assignments of beneficiaries' rights under this section,
including, but not limited to, provisions relating to:
(a) the nature and extent of the assignment, and
(b) the enforcement of the assignment by the Guarantee
Corporation.
103N Guarantee Corporation may require builder to make payments
or rectify work
(1) Subject to subsection (3), if a claim is made by a beneficiary
under the indemnity provided by this Division in respect of
incomplete or defective residential building work or the non-
supply of a kit home or supply of a defective kit home, the
Guarantee Corporation may give reasonable directions to the
builder concerned in respect of:
(a) the completion of the building work or the rectification
of the defective building work, or the supply of the kit
home or the replacement of the defective kit home, or
(b) the payment by the builder to the Building Insurers'
Guarantee Fund of any amount in respect of the
completion of the building work or the rectification of
the defective building work, or the supply of the kit
home or the replacement of the defective kit home.
(2) Subject to subsection (3), if a claim is made by a beneficiary
under the indemnity provided by this Division, the Guarantee
Corporation may direct the builder concerned to pay to the
Building Insurers' Guarantee Fund any amount paid out of the
Fund on that claim.
Page 12
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
(3) The Guarantee Corporation may only give a direction under
subsection (1) or (2) to the extent that an insolvent insurer (if
it was not insolvent) would be able to require that work or
supply, or require a payment to the insurer by the builder, under
the relevant insolvent insurer's policy.
(4) A builder must comply with a direction under subsection (1)
or (2).
(5) The Guarantee Corporation may recover an amount to be paid
by a builder under this section in any court of competent
jurisdiction as a debt due to the State.
(6) A builder who fails to comply with a direction under
subsection (1) or (2) is guilty of improper conduct.
103O Indemnity payments after insolvent insurer dissolved
(1) The indemnity provided by this Division continues despite the
dissolution of the insolvent insurer.
(2) In that case, the provisions of this Part apply as if the insurer
had not been dissolved.
Division 3 Miscellaneous
103P Building Insurers' Guarantee Fund
(1) There is established a fund, to be known as the Building
Insurers' Guarantee Fund, belonging to the Guarantee
Corporation.
(2) The following is to be paid into the Fund:
(a) money required to be paid into the Fund out of the
Policyholders Protection Fund in accordance with
section 16D of the Insurance Protection Tax Act 2001,
(b) the interest and any other amounts from time to time
accruing from the investment of the Fund,
(c) money recovered by the Guarantee Corporation under
this Part, including money recovered by the Guarantee
Corporation by the exercise of a beneficiary's rights
assigned to the Guarantee Corporation under this Part,
(d) money borrowed for the purposes of the Fund.
Page 13
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
(3) The following is to be paid from the Fund:
(a) money required to be paid from the Fund under
Division 2,
(b) payments relating to the costs and expenses of the
Guarantee Corporation incurred in or in connection with
the exercise of its functions under this Part,
(c) money required to be paid from the Fund into the
Policyholders Protection Fund in accordance with
section 16F of the Insurance Protection Tax Act 2001,
(d) repayments of money borrowed for the purposes of the
Fund.
(4) The Guarantee Corporation may invest money in the Fund
which is not immediately required for the purposes of the Fund
in such manner as may be authorised by the Public Authorities
(Financial Arrangements) Act 1987.
103Q Constitution of Guarantee Corporation
(1) There is constituted by this Act a body corporate with the
corporate name of the Building Insurers' Guarantee
Corporation.
(2) The Guarantee Corporation is, for the purposes of any Act, a
statutory body representing the Crown.
(3) The seal of the Guarantee Corporation may be affixed to a
document only:
(a) in the presence of the Minister or a person authorised by
the Minister, and
(b) with an attestation by the signature of the Minister or
that person of the fact of the affixing of the seal.
103R Minister to manage and control affairs of Guarantee Corporation
(1) The affairs of the Guarantee Corporation are to be managed
and controlled by the Minister.
(2) Any act, matter or thing done in the name of, or on behalf of,
the Guarantee Corporation by the Minister or the
Director-General is taken to have been done by the Guarantee
Corporation.
Page 14
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
103S Functions of Guarantee Corporation
(1) The Guarantee Corporation has the following functions:
(a) to deal with and finalise claims under this Part on behalf
of the State,
(b) to hold and manage, on behalf of the State, the Building
Insurers' Guarantee Fund in accordance with this Act,
(c) any other function conferred or imposed on it by or
under this or any other Act or law.
(2) The Guarantee Corporation may do all such things as are
supplemental or incidental to the exercise of its functions.
(3) The Guarantee Corporation may appoint an insurer or other
person as its agent or contractor for the purpose of exercising
any or all of its functions under this Part.
103T Combined financial and other reporting by Guarantee
Corporation and Department of Fair Trading
The reports of the Guarantee Corporation and the Department
of Fair Trading under the Public Finance and Audit Act 1983,
the Annual Reports (Statutory Bodies) Act 1984 and the Annual
Reports (Departments) Act 1985 may be combined, but must
include a separate report of the financial transactions and
activities of the Guarantee Corporation.
103U Guarantee Corporation may enter into agreements and
arrangements with liquidator of an insolvent insurer
The Guarantee Corporation may:
(a) enter into agreements or arrangements on behalf of the
State with, and
(b) on behalf of the State accept any assignment from,
any liquidator of an insolvent insurer or any other person for
the purpose of the settling of any claim in respect of which an
assignment was made under section 103M or for any other
purpose relating to an indemnity under this Part.
Page 15
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
103V Recovery of amounts under contracts or arrangements for
re-insurance or co-insurance
To the extent that any amounts are paid out of the Building
Insurers' Guarantee Fund in respect of an indemnity under
Division 2, the Guarantee Corporation is, where an insolvent
insurer (if it had provided indemnity to that extent under a
contract of insurance) would have been entitled to recover any
sum under a contract or arrangement for re-insurance or
co-insurance, entitled to the benefit of and may exercise the
rights and powers of the insolvent insurer under that contract or
arrangement so as to enable the Guarantee Corporation to
recover from the re-insurer or co-insurer and pay into the
Building Insurers' Guarantee Fund the amount due under that
contract or arrangement.
103W Liquidator to notify Guarantee Corporation of claims
The liquidator of an insolvent insurer must, on receiving any
claim relating to an insolvent insurer's policy covered by the
indemnity provided by Division 2, forward a copy of the claim
to the Guarantee Corporation.
Maximum penalty: 20 penalty units.
103X Delivery of documents to Guarantee Corporation
(1) This section applies to the following persons:
(a) the liquidator of an insolvent insurer,
(b) any other person who holds documents relating to
insolvent insurer's policies covered by the indemnity
provided by Division 2 that the liquidator is entitled to
possess (including documents the liquidator would be
entitled to possess but for a lien).
(2) A person to whom this section applies must, whenever
requested to do so by the Guarantee Corporation:
(a) deliver to the Guarantee Corporation copies of
documents relating to insolvent insurer's policies
covered by the indemnity provided by Division 2, and
of all claims or judgments made in respect of any such
policies in the person's possession, and
Page 16
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
(b) supply to the Guarantee Corporation all information in
the person's possession relating to any such policies or
any such claims or judgments.
Maximum penalty: 20 penalty units.
103Y Inspection of documents by person authorised by Minister
(1) This section applies to the following persons:
(a) the liquidator of an insolvent insurer,
(b) a person who holds documents relating to insolvent
insurer's policies covered by the indemnity provided by
Division 2 that the liquidator is entitled to possess
(including documents the liquidator would be entitled to
possess but for a lien).
(2) A person to whom this section applies must, whenever
requested to do so by a person authorised by the Minister, make
any documents relating to insolvent insurer's policies covered
by the indemnity provided by Division 2, and any claims or
judgments made in respect of any such policies in the person's
possession available for inspection by that authorised person.
Maximum penalty: 20 penalty units.
103Z Guarantee Corporation may take certain legal proceedings
(1) If:
(a) the liquidator of an insolvent insurer applies to any
court for directions in relation to any particular matter
arising under the winding up, or
(b) the exercise by the liquidator of an insolvent insurer of
any of the liquidator's functions, whether under this Part
or not, is challenged, reviewed or called into question in
proceedings before the Tribunal or any court, or
(c) any other matter that concerns or may affect the
operation of this Part is raised in proceedings before the
Tribunal or any court,
the Guarantee Corporation may intervene at any stage of the
proceedings before the Tribunal or that court, by counsel or
agent, and the Guarantee Corporation thereupon becomes a
party to, and has all the rights of a party to, those proceedings
Page 17
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
before the Tribunal or that court, including the right to appeal
against any order, judgment or direction of the Tribunal or the
court.
(2) In any case in which the Attorney General might take
proceedings on the relation or on behalf of or for the benefit of
a beneficiary who is (or who would but for the dissolution of
the insolvent insurer be) entitled, under an insolvent insurer's
policy, to be indemnified against a claim or judgment arising
from or relating to the policy, being proceedings for or with
respect to enforcing or securing the observance of any
provision made by or under this Part, any Act or any rule of
law, the Guarantee Corporation is taken to represent
sufficiently the interests of the public and may take the
proceedings in its own name.
103ZA Disputes regarding decisions of Guarantee Corporation
(1) The Tribunal has the same jurisdiction in relation to claims for
indemnity under Division 2 as it has in relation to claims under
contracts of insurance required to be entered into under Part 6.
(2) The regulations may make provision for or with respect to the
application, with such modifications as may be provided by the
regulations, of any of the provisions of this Act in relation to
the dealing with or finalising of claims, the satisfying of
judgments or the resolving of disputes regarding claims.
103ZB Recovery of amounts under guarantees or indemnities
To the extent that any amounts are paid out of the Building
Insurers' Guarantee Fund in respect of an indemnity under
Division 2, the Guarantee Corporation is, where an insolvent
insurer (if it had provided indemnity to that extent under an
insolvent insurer's policy) would have been entitled to recover
any sum under a guarantee or indemnity given by a builder or
any other person, entitled to the benefit of and may exercise the
rights and powers of the insolvent insurer under that guarantee
or indemnity so as to enable the Guarantee Corporation to
recover from the builder or other person and pay into the
Building Insurers' Guarantee Fund the amount due under that
guarantee or indemnity.
Page 18
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
[2] Schedule 4 Savings and transitional provisions
Insert at the end of clause 2 (1):
Insurance (Policyholders Protection) Legislation Amendment
Act 2001.
[3] Schedule 4
Insert at the end of the Schedule with appropriate Part and clause numbers:
Part Provisions consequent on enactment of
Insurance (Policyholders Protection)
Legislation Amendment Act 2001
Contracts of insurance with HIH Casualty and General Insurance
Limited and FAI General Insurance Company Limited
(1) To avoid doubt:
(a) a certificate of insurance provided on or before 20 June
2001 evidencing a contract of insurance in relation to
residential building work:
(i) that was entered into with HIH Casualty and
General Insurance Limited or FAI General
Insurance Company Limited, and
(ii) that complied with this Act, and
(iii) that was in force on 20 June 2001,
is, for the purposes of section 92, taken to be a
certificate evidencing a contract of insurance that
complies with this Act and is in force in relation to that
work, and
(b) a certificate of insurance provided on or before 20 June
2001 evidencing a contract of insurance in relation to
the supply of a kit home:
(i) that was entered into with HIH Casualty and
General Insurance Limited or FAI General
Insurance Company Limited, and
(ii) that complied with this Act, and
Page 19
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 2 Amendment of Home Building Act 1989
(iii) that was in force on 20 June 2001,
is, for the purposes of section 93, taken to be a
certificate evidencing a contract of insurance that
complies with this Act and is in force in relation to that
supply, and
(c) a certificate of insurance provided on or before 15
March 2001 evidencing a contract of insurance in
relation to owner-builder work:
(i) that was entered into with HIH Casualty and
General Insurance Limited or FAI General
Insurance Company Limited, and
(ii) that complied with this Act, and
(iii) that was in force on 15 March 2001,
is, for the purposes of section 95, taken to be a
certificate evidencing a contract of insurance that
complies with this Act and is in force in relation to that
work, and
(d) a certificate of insurance provided on or before 20 June
2001 evidencing a contract of insurance in relation to
residential building work:
(i) that was entered into with HIH Casualty and
General Insurance Limited or FAI General
Insurance Company Limited, and
(ii) that complied with this Act, and
(iii) that was in force on 20 June 2001,
is, for the purposes of section 96, taken to be a
certificate evidencing a contract of insurance that
complies with this Act and is in force in relation to that
work.
(2) To avoid doubt:
(a) a certificate of insurance provided after 20 June 2001
evidencing a contract of insurance that was entered into
with HIH Casualty and General Insurance Limited or
FAI General Insurance Company Limited is, for the
purposes of section 92, 93 or 96, not a certificate
evidencing a contract of insurance that complies with
this Act, and
Page 20
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Home Building Act 1989 Schedule 2
(b) a certificate of insurance provided after 15 March 2001
evidencing a contract of insurance that was entered into
with HIH Casualty and General Insurance Limited or
FAI General Insurance Company Limited is, for the
purposes of section 95, not a certificate evidencing a
contract of insurance that complies with this Act.
Page 21
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 3 Amendment of Motor Accidents Compensation Act 1999
Schedule 3 Amendment of Motor Accidents
Compensation Act 1999
(Section 5)
[1] Section 40 Establishment of Nominal Defendant's Fund
Insert after section 40 (2) (c):
(c1) money required to be paid into the Fund out of the
Policyholders Protection Fund in accordance with
section 16E of the Insurance Protection Tax Act 2001,
[2] Section 40 (3) (a1)
Insert after section 40 (3) (a):
(a1) money required to be paid from the Fund into the
Policyholders Protection Fund in accordance with
section 16G of the Insurance Protection Tax Act 2001,
[3] Section 184 Interpretation
Omit the definition of insolvent insurer in section 184 (1). Insert instead:
insolvent insurer means an insurer to whom:
(a) an order of the Treasurer in force under section 16A of
the Insurance Protection Tax Act 2001 relates, or
(b) an order of the Minister in force under section 185
relates.
[4] Section 184 (1)
Insert in alphabetical order:
liquidator includes a provisional liquidator.
Page 22
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Amendment of Motor Accidents Compensation Act 1999 Schedule 3
[5] Section 184 (4) and (5)
Insert after section 184 (3):
(4) In this Part, a reference to a third-party policy, a licensed
insurer and a former licensed insurer includes a reference to a
third-party policy, a licensed insurer and a former licensed
insurer within the meaning of the Motor Accidents Act 1988 (as
in force immediately before the commencement of this Part),
respectively.
(5) This Part has effect despite any provisions of the Corporations
(New South Wales) Act 1990 or of the applicable provisions (as
defined in that Act) of the State.
[6] Section 185 Insolvent insurers
Insert " with the approval of the Treasurer" after "Minister may" in section
185 (1).
[7] Section 185, note
Insert at the end of the section:
Note. Declared insolvent insurers under the Insurance Protection Tax
Act 2001 are also insolvent insurers for the purposes of this Part. See the
definition of insolvent insurer in section 184 of this Act.
Page 23
Insurance (Policyholders Protection) Legislation Amendment Bill 2001
Schedule 4 Consequential amendments of other Acts and instruments
Schedule 4 Consequential amendments of other Acts
and instruments
(Section 6)
4.1 Public Finance and Audit Act 1983 No 152
Schedule 2 Statutory bodies
Insert in alphabetical order:
Building Insurers' Guarantee Corporation
4.2 Public Authorities (Financial Arrangements) Regulation 2000
Schedule 1 Authorities having Part 2 investment powers
Insert in alphabetical order:
Building Insurers' Guarantee Corporation
Page 24
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