Commonwealth of Australia Bills Commonwealth of Australia Bills[Index] [Search] [Download] [Related Items] [Help]
This is a Bill, not an Act. For current law, see the Acts databases.
2019-2020-2021-2022
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Treasury Laws Amendment (Cyclone
and Flood Damage Reinsurance Pool)
Bill 2022
No. , 2022
(Treasury)
A Bill for an Act to amend the Terrorism Insurance
Act 2003 in order to establish a cyclone and related
damage reinsurance pool operated by the
Australian Reinsurance Pool Corporation, and for
related purposes
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 2
3
Schedules ........................................................................................... 2
Schedule 1--Establishing a cyclone and related damage
reinsurance pool
3
Part 1--Amendments
3
Insurance Act 1973
3
Terrorism Insurance Act 2003
3
Part 2--Application of amendments
21
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
1
A Bill for an Act to amend the Terrorism Insurance
1
Act 2003 in order to establish a cyclone and related
2
damage reinsurance pool operated by the
3
Australian Reinsurance Pool Corporation, and for
4
related purposes
5
The Parliament of Australia enacts:
6
1 Short title
7
This Act is the
Treasury Laws Amendment (Cyclone and Flood
8
Damage Reinsurance Pool) Act 2022
.
9
2
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
2 Commencement
1
(1) Each provision of this Act specified in column 1 of the table
2
commences, or is taken to have commenced, in accordance with
3
column 2 of the table. Any other statement in column 2 has effect
4
according to its terms.
5
6
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
The day this Act receives the Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
7
enacted. It will not be amended to deal with any later amendments of
8
this Act.
9
(2) Any information in column 3 of the table is not part of this Act.
10
Information may be inserted in this column, or information in it
11
may be edited, in any published version of this Act.
12
3 Schedules
13
Legislation that is specified in a Schedule to this Act is amended or
14
repealed as set out in the applicable items in the Schedule
15
concerned, and any other item in a Schedule to this Act has effect
16
according to its terms.
17
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
3
Schedule 1--Establishing a cyclone and
1
related damage reinsurance pool
2
Part 1--Amendments
3
Insurance Act 1973
4
1 After section 127E
5
Insert:
6
127F Civil penalty for contravening section 8A of the Terrorism and
7
Cyclone Insurance Act 2003
8
A person commits a separate contravention of this section for each
9
calendar year during all or part of which the person fails to comply
10
with subsection 8A(1) of the
Terrorism and Cyclone Insurance Act
11
2003
.
12
Note:
That subsection requires most general insurers to reinsure specified
13
cyclone risks with the Australian Reinsurance Pool Corporation. It
14
also applies to syndicates of Lloyd's underwriters, and to unauthorised
15
foreign insurers, who choose to reinsure such risks with the
16
Corporation.
17
Civil penalty:
1,000 penalty units.
18
Terrorism Insurance Act 2003
19
2 Title
20
After "
acts,
", insert "
and for cyclone and related flood damage,
".
21
3 Section 1
22
Repeal the section, substitute:
23
1 Short title
24
This Act may be cited as the
Terrorism and Cyclone Insurance Act
25
2003
.
26
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
4
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
Note:
This item amends the short title of the Act. If another amendment of the Act is
1
described by reference to the Act's previous short title, that other amendment has effect
2
after the commencement of this item as an amendment of the Act under its amended
3
short title (see section 10 of the
Acts Interpretation Act 1901
).
4
4 Section 3
5
Insert:
6
APRA
means the Australian Prudential Regulation Authority.
7
5 Section 3
8
Insert:
9
body corporate
for a strata or community title development has the
10
meaning prescribed by the regulations.
11
Bureau
means the Commonwealth Bureau of Meteorology.
12
claims period
for a cyclone event means the period:
13
(a) starting on the day, and at the time, specified under
14
paragraph 8F(1)(a) for the cyclone event; and
15
(b) ending on the day, and at the time, specified under
16
paragraph 8F(2)(c) for the cyclone event.
17
cyclone
has the meaning prescribed by the regulations.
18
cyclone event
means a cyclone event declared under
19
subsection 8F(1) in relation to a cyclone.
20
cyclone reinsurance contract
means a contract of reinsurance that
21
the Corporation enters into as reinsurer under Part 2A.
22
cyclone reinsurance scheme
means:
23
(a) the scheme operated by the Corporation in performing its
24
function under paragraph 10(b) (cyclone and related flood
25
damage reinsurance); and
26
(b) any other activities the Corporation undertakes for the
27
purposes of performing that function.
28
eligible cyclone loss
has the meaning given by section 8C.
29
end
, in relation to a cyclone, has the meaning prescribed by the
30
regulations.
31
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
5
Finance Minister
means the Minister administering the
Public
1
Governance, Performance and Accountability Act 2013
.
2
financial year
of a general insurer means a financial year of the
3
insurer determined under section 323D of the
Corporations Act
4
2001
.
5
general insurer
has the same meaning as in the
Insurance Act
6
1973
.
7
insurance business
has the same meaning as in the
Insurance Act
8
1973
.
9
Lloyd's underwriter
has the same meaning as in the
Insurance Act
10
1973
.
11
6 Section 3 (definition of own)
12
Omit "eligible".
13
7 Section 3
14
Insert:
15
pool insurance contract
has the meaning given by section 8B.
16
reintensify
, in relation to a cyclone, has the meaning prescribed by
17
the regulations.
18
strata or community title development
has the meaning prescribed
19
by the regulations.
20
unauthorised foreign insurer
has the same meaning as in the
21
Insurance Regulations 2002
.
22
unit
in a strata or community title development has the meaning
23
prescribed by the regulations.
24
8 At the end of Part 1
25
Add:
26
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
6
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
5 Application to the Commonwealth
1
(1) Part 2A applies to the Commonwealth, when undertaking
2
insurance under Part VI (about the Defence Service Homes
3
Insurance Scheme) of the
Defence Service Homes Act 1918
, in the
4
same way as Part 2A applies to a general insurer.
5
(2) Part 2A binds the Crown in right of the Commonwealth to the
6
extent provided in subsection (1), but nothing in that Part makes
7
the Crown liable to a pecuniary penalty.
8
9 After Part 2
9
Insert:
10
Part 2A--Cyclone and related flood damage
11
reinsurance pool
12
13
8A When cyclone risks must be reinsured with the Corporation
14
(1) If a general insurer carries on insurance business that includes
15
undertaking liability, under pool insurance contracts, in respect of
16
eligible cyclone losses, the insurer must maintain contracts of
17
reinsurance with the Corporation that:
18
(a) cover the insurer's liability, under all pool insurance
19
contracts that it enters into, in respect of all eligible cyclone
20
losses; and
21
(b) insure against 100% of the insurer's liability, under each of
22
those pool insurance contracts, in respect of all eligible
23
cyclone losses.
24
Note:
A pecuniary penalty may be imposed for a contravention of this
25
subsection: see section 127F of the
Insurance Act 1973
.
26
(2) Subsection (1) has effect subject to a direction that is in force under
27
section 38 and provides for the extent to which risk is to be
28
retained by reinsureds under the relevant contracts of reinsurance.
29
(3) Subsection (1) has effect even if the general insurer has entered
30
into a contract of reinsurance otherwise than with the Corporation.
31
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
7
(4) The Corporation may enter into contracts of reinsurance that insure
1
against the reinsureds' liability, under pool insurance contracts, in
2
respect of eligible cyclone losses arising on and after 1 July 2022.
3
Exception where premium income is below prescribed threshold in
4
previous financial year
5
(5) Subsection (1) does not apply to a general insurer during a calendar
6
year if the amount worked out under subsection (6) does not
7
exceed the threshold amount prescribed by the regulations.
8
(6) For the purposes of subsection (5), the amount is the total gross
9
written premiums that the reporting standard prescribed by the
10
regulations for the purposes of this subsection would require the
11
general insurer to report to APRA:
12
(a) in respect of the last financial year of the general insurer that
13
ended before the start of the calendar year referred to in
14
subsection (5); and
15
(b) for a class of direct business consisting of contracts of
16
insurance:
17
(i) that the general insurer enters into as insurer; and
18
(ii) that are wholly or partly pool insurance contracts; and
19
(iii) under which the insurer undertakes any liability in
20
respect of eligible cyclone losses (whether or not the
21
contracts cover other risks) other than eligible cyclone
22
losses arising at a place covered by a determination in
23
force under subsection (7);
24
if such contracts were a distinct class of direct insurance business.
25
(7) The Corporation may, by notifiable instrument, determine areas
26
where, in its opinion, the risk of eligible cyclone losses arising is so
27
small as to be negligible.
28
One in, all in rule for exempt general insurer
29
(8) However, if a general insurer enters into a contract of reinsurance
30
with the Corporation that insures against the insurer's liability
31
under a pool insurance contract in respect of eligible cyclone
32
losses, subsection (5) does not apply to the general insurer while
33
that contract of reinsurance is in force.
34
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
8
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
How this section applies to a Lloyd's syndicate
1
(9) If a syndicate of Lloyd's underwriters enter into a contract of
2
reinsurance with the Corporation that insures against their liability
3
under a pool insurance contract in respect of eligible cyclone
4
losses, then, while that contract of reinsurance is in force,
5
subsections (1), (2) and (3) apply to:
6
(a) the syndicate; and
7
(b) each Lloyd's underwriter who is a member of the syndicate,
8
when acting in that capacity;
9
in the same way as those subsections apply to a general insurer.
10
How this section applies to an unauthorised foreign insurer
11
(10) If an unauthorised foreign insurer enters into a contract of
12
reinsurance with the Corporation that insures against the liability of
13
the foreign insurer under a pool insurance contract in respect of
14
eligible cyclone losses, then, while that contract of reinsurance is in
15
force, subsections (1), (2) and (3) apply to that foreign insurer in
16
the same way as those subsections apply to a general insurer.
17
8B Definition of pool insurance contract
18
(1) A contract of insurance is a
pool insurance contract
to the extent
19
(but only to the extent) that:
20
(a) it provides insurance cover that is of a kind referred to in
21
subsection (2) and also of a kind referred to in subsection (3),
22
whether or not the cover is limited or restricted in any way,
23
and whether or not the contract also provides any other
24
insurance cover; or
25
(b) it is prescribed by the regulations for the purposes of this
26
paragraph.
27
Note:
Subsections (5) to (8) contain exclusions.
28
Type of risk covered
29
(2) The kinds of insurance cover referred to in this subsection are the
30
following:
31
(a) insurance cover for loss of, or damage to, eligible property
32
that is owned by the insured;
33
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
9
(b) insurance cover for business interruption and consequential
1
loss arising from:
2
(i) loss of, or damage to; or
3
(ii) inability to use all or part of;
4
eligible property that is owned or occupied by the insured.
5
Note:
An example of insurance cover referred to in paragraph (b) is a
6
contract of insurance that is entered into by the owner of leased
7
premises and insures against loss of rental income if the premises are
8
damaged.
9
Type of cover
10
(3) The kinds of insurance cover referred to in this subsection are the
11
following:
12
(a) insurance cover in respect of a home building;
13
(b) insurance cover in respect of contents of a home building;
14
(c) if:
15
(i) the insured is the body corporate for a strata or
16
community title development; and
17
(ii) at least 50% of the total floor space of the units in the
18
development is used wholly or mainly for residential
19
purposes;
20
insurance cover in respect of either or both of:
21
(iii) a building located on land that is included in the
22
development; and
23
(iv) contents of such a building;
24
(d) insurance cover (other than insurance cover of a kind referred
25
to in paragraph (a), (b) or (c)):
26
(i) that is in respect of a building, contents of a building, or
27
both; and
28
(ii) for which the total of the sums insured does not exceed
29
the amount prescribed by the regulations for the
30
purposes of this paragraph.
31
Terms used in subsection (3) that are defined by the regulations
32
(4) For the purposes of a paragraph of subsection (3):
33
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
10
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
building
means a building as defined by the regulations for the
1
purposes of that paragraph.
2
contents
means contents as defined by the regulations for the
3
purposes of that paragraph.
4
home building
means a home building as defined by the
5
regulations for the purposes of that paragraph.
6
Exclusion from subsection (3) of buildings owned and managed by
7
government entities
8
(5) Paragraph (3)(a) or (d) does not apply if:
9
(a) the insured is a government entity as defined by the
10
regulations for the purposes of this subsection; and
11
(b) the home building or building, as the case may be, is
12
managed by such a government entity (whether or not the
13
same as the one referred to in paragraph (a) of this
14
subsection).
15
Other exclusions
16
(6) A contract is not a pool insurance contract to the extent that it
17
provides cover of a kind referred to in paragraph (3)(a) or (b) if the
18
contract also provides cover that would be of a kind referred to in
19
paragraph (3)(d) but for the fact that the last-mentioned cover does
20
not satisfy subparagraph (3)(d)(ii).
21
(7) A contract is not a pool insurance contract to the extent that:
22
(a) it is a contract of reinsurance; or
23
(b) it provides insurance cover (other than insurance cover of a
24
kind referred to in paragraph (3)(a) or (b)) to a farm business,
25
including:
26
(i) producing crops or livestock, or produce derived from
27
the crops or livestock; and
28
(ii) secondary processing of, or manufacturing goods from,
29
the crops, livestock or produce, at the place where the
30
crops or livestock are produced; and
31
(iii) the interests of the insured in property used in doing
32
something covered by subparagraph (i) or (ii) of this
33
paragraph; or
34
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
11
(c) it is prescribed by the regulations for the purposes of this
1
subsection.
2
(8) A contract of insurance is not a pool insurance contract if it is
3
made in the course of State insurance not extending beyond the
4
limits of the State concerned.
5
(9) Subsections (6) to (8) have effect despite subsection (1).
6
8C Definition of eligible cyclone loss
7
(1) For the purposes of this Act, an
eligible cyclone loss
is a loss that
8
satisfies the conditions in subsections (2) and (3).
9
(2) The loss must arise:
10
(a) from the weather system in relation to which a cyclone event
11
was declared under subsection 8F(1); or
12
(b) without limiting the generality of paragraph (a) of this
13
subsection, from any of the following that is caused by that
14
weather system:
15
(i) wind, rain, rainwater or rainwater runoff;
16
(ii) a storm surge, as defined by the regulations for the
17
purposes of this subparagraph;
18
(iii) a flood, as defined by the regulations for the purposes of
19
this subparagraph.
20
(3) The loss must commence during the claims period for the cyclone
21
event referred to in paragraph (2)(a).
22
8D Setting reinsurance premiums
23
When setting premiums that reinsureds are to pay under cyclone
24
reinsurance contracts, the Corporation is to seek:
25
(a) to ensure that, over the longer term, premiums paid under
26
such contracts are sufficient to cover or offset:
27
(i) the amounts paid in meeting the Corporation's liabilities
28
under such contracts (including payments by the
29
Commonwealth under section 35A in respect of such
30
liabilities); and
31
(ii) all other amounts applied by the Corporation as
32
mentioned in subsection 34(1), in so far as those
33
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
12
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
amounts may reasonably be regarded as connected with
1
the cyclone reinsurance scheme; and
2
(b) in so far as those premiums are for reinsuring liability under
3
pool insurance contracts that involve medium to high levels
4
of exposure to eligible cyclone losses--to keep the premiums
5
as low as possible while maintaining incentives to reduce and
6
mitigate the risk of eligible cyclone losses; and
7
(c) in so far as those premiums are for reinsuring liability under
8
pool insurance contracts that involve lower levels of
9
exposure to eligible cyclone losses--to keep those premiums
10
at levels comparable to what would be charged by other
11
reinsurers.
12
8E Bureau to notify the Corporation when cyclone begins and ends
13
(1) If the Bureau determines that:
14
(a) a cyclone exists or has reintensified; and
15
(b) the cyclone is likely to affect any part of Australia;
16
the Bureau must notify the Corporation that the cyclone exists or
17
has reintensified, specifying the day and time when, in the
18
Bureau's opinion, the cyclone began or reintensified, as the case
19
may be.
20
(2) If:
21
(a) the Bureau determines that a cyclone has ended; and
22
(b) the cyclone is one about which the Bureau has notified the
23
Corporation under subsection (1);
24
the Bureau must notify the Corporation that the cyclone has ended,
25
specifying the day and time when, in the Bureau's opinion, the
26
cyclone ended.
27
(3) A notification under this section must be given:
28
(a) as soon as practicable, and in any event within 24 hours, after
29
the Bureau determines as mentioned in subsection (1) or (2),
30
as the case may be; and
31
(b) in writing sent by electronic communication within the
32
meaning of the
Electronic Transactions Act 1999
.
33
Note:
This section confers functions on the Bureau in addition to its
34
functions under the
Meteorology Act 1955
.
35
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
13
8F Declarations about cyclone events
1
(1) If the Bureau notifies the Corporation that a cyclone exists or has
2
reintensified, the Corporation must declare that a cyclone event has
3
begun. The declaration must:
4
(a) specify the day and time when the cyclone began or
5
reintensified, as notified by the Bureau; and
6
(b) state that the claims period for the cyclone event began on
7
that day at that time.
8
Note:
If a cyclone ends but then reintensifies, a new cyclone event is
9
declared under this section in relation to the cyclone.
10
(2) If the Bureau notifies the Corporation that a cyclone has ended, the
11
Corporation must declare that the cyclone event has ended that was
12
previously declared under subsection (1) in relation to that cyclone.
13
The declaration under this subsection must specify:
14
(a) the previous declaration; and
15
(b) the day and time when the cyclone ended, as notified by the
16
Bureau; and
17
(c) the day and time when the claims period for the cyclone
18
event ended, or will end, as the case requires.
19
(3) The day and time specified under paragraph (2)(c) must be the day
20
and time when the period ends:
21
(a) that began on the day, and at the time, specified under
22
paragraph (2)(b); and
23
(b) whose duration is prescribed by the regulations for the
24
purposes of this subsection.
25
(4) A declaration under this section:
26
(a) must be made as soon as practicable, and in any event within
27
24 hours, after the Bureau notifies the Corporation that a
28
cyclone exists, has reintensified or has ended, as the case
29
may be; and
30
(b) must be made by notifiable instrument; and
31
(c) cannot be varied or revoked; and
32
(d) must be published on the Corporation's website as soon as
33
practicable, and in any event within those 24 hours.
34
(5) The validity of a declaration under this section is not affected by:
35
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
14
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
(a) an error in matter specified in the declaration; or
1
(b) a contravention of subsection (4).
2
10 Paragraph 10(b)
3
Repeal the paragraph, substitute:
4
(b) to operate a cyclone and related flood damage reinsurance
5
pool by entering into contracts of reinsurance as reinsurer in
6
accordance with Part 2A;
7
(c) any other functions prescribed by the regulations.
8
11 At the end of section 11
9
Add:
10
(3) Division 1 of Part III (Authorisation to carry on insurance
11
business) of the
Insurance Act 1973
does not apply, and is taken
12
never to have applied, to the Corporation.
13
12 Paragraph 12(1)(b)
14
Repeal the paragraph, substitute:
15
(b) at least 6, but not more than 8, other members.
16
13 Heading to Division 2 of Part 3
17
Repeal the heading, substitute:
18
Division 2--Administrative provisions about members and
19
observers
20
14 At the end of Division 2 of Part 3
21
Add:
22
20A Observers
23
Role of observers
24
(1) A person appointed under this section (an
observer
):
25
(a) is entitled to receive notice of meetings of the Corporation;
26
and
27
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
15
(b) may attend any meeting of the Corporation and take such
1
part in the proceedings, not including voting, as the observer
2
thinks fit; and
3
(c) may report to the Minister on any matter relating to the
4
cyclone reinsurance scheme; and
5
(d) if the Minister requests a report on such a matter, must report
6
to the Minister on that matter.
7
Appointment of observers
8
(2) The Minister may, by written instrument, appoint a representative
9
of APRA or of the Australian Government Actuary to be an
10
observer, on a part-time basis. At most 2 persons may hold office
11
as observers at the same time, of whom:
12
(a) at most one may be a representative of APRA; and
13
(b) at most one may be a representative of the Australian
14
Government Actuary.
15
(3) A person is not eligible to be appointed as an observer unless the
16
Minister is satisfied that the person has qualifications or experience
17
that the Minister considers relevant to the performance of the
18
Corporation's functions.
19
(4) An observer holds office for the period specified in the instrument
20
of appointment. The period must not exceed 2 years.
21
Note:
An observer may be reappointed: see section 33AA of the
Acts
22
Interpretation Act 1901
.
23
(5) The Minister may at any time terminate the appointment of an
24
observer.
25
Terms and conditions
26
(6) The Minister may grant leave of absence to an observer on the
27
terms and conditions that the Minister determines.
28
(7) An observer may resign by giving the Minister a written
29
resignation. The resignation takes effect on the day it is received by
30
the Minister or, if a later day is specified in the resignation, on that
31
later day.
32
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
16
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
15 After Division 5 of Part 3
1
Insert:
2
Division 5A--Reviewing actuary
3
33A Nomination of reviewing actuary
4
(1) The Corporation must, in writing, nominate a person as reviewing
5
actuary. The person must be an actuary who:
6
(a) is a Fellow of The Institute of Actuaries of Australia; and
7
(b) in the opinion of the Corporation, is a fit and proper person,
8
and has appropriate skills, experience or knowledge, to be the
9
reviewing actuary; and
10
(c) is neither a person employed under section 32 nor a
11
consultant engaged under section 33.
12
(2) The nomination has effect for 3 years, or a shorter period specified
13
in the nomination.
14
(3) The Corporation must, in writing, revoke the nomination if the
15
nominee:
16
(a) ceases to be a Fellow of The Institute of Actuaries of
17
Australia; or
18
(b) becomes a person employed under section 32 or a consultant
19
engaged under section 33.
20
(4) Subsections (2) and (3) do not limit subsection 33(3) of the
Acts
21
Interpretation Act 1901
(which deals with revocation and variation
22
of instruments).
23
Reviewing actuary for first 3 years of cyclone reinsurance scheme
24
(5) The Corporation must nominate the Australian Government
25
Actuary under subsection (1) as the first reviewing actuary, as soon
26
as reasonably practicable after the commencement of this section.
27
The nomination has effect for 3 years, despite subsection (2) of this
28
section and subsection 33(3) of the
Acts Interpretation Act 1901
,
29
but subject to subsection (3) of this section.
30
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
17
Nominations and revocations are not legislative instruments
1
(6) Neither a nomination under subsection (1) nor a revocation under
2
subsection (3) is a legislative instrument.
3
33B Duties of reviewing actuary
4
(1) The duties of the reviewing actuary are:
5
(a) to review the premiums that the Corporation proposes to
6
charge in respect of cyclone reinsurance contracts, and the
7
Corporation's compliance with section 8D in setting those
8
premiums; and
9
(b) to review, and report to the Corporation on, each Financial
10
Outlook Report prepared under section 40A, before the
11
Report is given to the Minister; and
12
(c) to provide advice and reports on actuarial matters, as
13
requested by the Corporation.
14
(2) A report to the Corporation under paragraph (1)(b) must state
15
whether, in the reviewing actuary's opinion, the Corporation has
16
made all arrangements necessary for the reviewing actuary to
17
conduct the review to which the report relates.
18
(3) If the reviewing actuary has significant concerns about the
19
financial sustainability of the cyclone reinsurance scheme, or the
20
risk management processes of the Corporation, the reviewing
21
actuary must report those concerns to the Corporation as soon as
22
reasonably practicable.
23
33C Corporation to assist reviewing actuary
24
The Corporation must make arrangements to enable the reviewing
25
actuary to perform the duties for which section 33B provides.
26
16 Section 35 (heading)
27
Repeal the heading, substitute:
28
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
18
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
35 Commonwealth guarantee: payments otherwise than under
1
cyclone reinsurance contracts
2
17 Subsection 35(1)
3
Omit "other than the Commonwealth", substitute "(other than the
4
Commonwealth) otherwise than in respect of a liability of the
5
Corporation under a cyclone reinsurance contract".
6
18 Subsection 35(3)
7
After "liabilities", insert "(other than its liabilities under cyclone
8
reinsurance contracts)".
9
19 After section 35
10
Insert:
11
35A Commonwealth guarantee: payments under cyclone
12
reinsurance contracts
13
(1) The Commonwealth guarantees the due payment of money that
14
may become payable by the Corporation to any person (other than
15
the Commonwealth) in respect of a liability (a
cyclone loss
16
liability
) of the Corporation under a cyclone reinsurance contract.
17
(2) However, the total of the amounts paid by the Commonwealth
18
under subsection (1) in a financial year must not exceed:
19
(a) unless paragraph (b) of this subsection applies--$10 billion;
20
or
21
(b) if an amount is determined for that financial year under
22
subsection (4)--the greatest amount so determined.
23
(3) If at any time the Corporation considers it likely that, after taking
24
into account the guarantee under this section, the Corporation will
25
be unable to discharge all its cyclone loss liabilities, the
26
Corporation must give the Minister a written notice to that effect.
27
(4) If the Minister receives a notice under subsection (3), the Minister
28
must:
29
(a) if the Minister is not the Treasurer--consult with the
30
Treasurer; and
31
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Amendments
Part 1
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
19
(b) consult with the Prime Minister and the Finance Minister;
1
and
2
(c) determine an amount for a financial year, for the purposes of
3
paragraph (2)(b), that in the Minister's opinion is sufficient to
4
ensure that, after taking into account the guarantee under this
5
section, the Corporation will be able to discharge all its
6
cyclone loss liabilities.
7
Note:
If the Corporation gives the Minister a further notice under
8
subsection (3), this subsection may have a further application.
9
(5) A determination under subsection (4) must be made by notifiable
10
instrument, and cannot be revoked.
11
(6) The validity of a determination under subsection (4) is not affected
12
by a failure to comply with paragraph (4)(a) or (b).
13
20 Paragraph 37(b)
14
After "35", insert "or 35A".
15
21 Paragraph 38(2)(d)
16
After "insurance", insert "(except cyclone reinsurance contracts)".
17
22 Paragraph 38(2)(e)
18
Repeal the paragraph, substitute:
19
(e) directions relating to the extent to which risk is to be retained
20
by reinsureds under contracts of reinsurance that the
21
Corporation enters into as reinsurer.
22
23 Section 40
23
Omit "The", substitute "(1) The".
24
24 Section 40 (note)
25
Repeal the note.
26
25 At the end of section 40
27
Add:
28
(2) However, a power or function under section 8F (declarations about
29
cyclone events) may only be delegated to:
30
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 1
Amendments
20
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
(a) the Chief Executive; or
1
(b) a person employed under section 32 in a senior executive
2
position.
3
26 Section 41
4
Repeal the section, substitute:
5
40A Annual Financial Outlook Report
6
(1) After the end of a financial year beginning on or after 1 July 2023,
7
the Corporation must prepare and give to the Minister a Financial
8
Outlook Report that sets out the matters prescribed by the
9
regulations.
10
(2) The Report must be given to the Minister on or before the next
11
15 October after the end of the financial year.
12
(3) The Report must be published on the Corporation's website within
13
10 business days after it is given to the Minister.
14
41 Review of Act
15
The Minister must:
16
(a) as soon as practicable after 1 July 2025; and
17
(b) at least once every 5 years after that day;
18
prepare a report that reviews the need for this Act to continue in
19
operation.
20
Establishing a cyclone and related damage reinsurance pool
Schedule 1
Application of amendments
Part 2
No. , 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
21
Part 2--Application of amendments
1
27 Application of section 8A of the Terrorism and Cyclone
2
Insurance Act 2003
3
(1)
Subsections 8A(1) to (3) and (5) to (8) of the
Terrorism and Cyclone
4
Insurance Act 2003
, as inserted by item 9 of this Schedule, apply to a
5
general insurer from the start of:
6
(a) unless paragraph (b) applies--the 2024 calendar year; or
7
(b) if the total gross written premiums for the householders class
8
of direct business, as reported to APRA:
9
(i) under the reporting standard prescribed for the purposes
10
of subsection 8A(6) of that Act, as so inserted; and
11
(ii) in respect of the last financial year of the insurer to end
12
before 31 December 2022;
13
is less than $300 million--the 2025 calendar year.
14
(2)
The following provisions of the
Terrorism and Cyclone Insurance Act
15
2003
, as inserted by item 9 of this Schedule, apply in relation to a
16
Lloyd's underwriter or unauthorised foreign insurer from the start of the
17
2024 calendar year:
18
(a) subsections 8A(9) and (10);
19
(b) subsections 8A(1) to (3), as applying because of
20
subsections 8A(9) and (10).
21
28 Application of section 8B of the Terrorism and Cyclone
22
Insurance Act 2003
23
Section 8B of the
Terrorism and Cyclone Insurance Act 2003
, as
24
inserted by item 9 of this Schedule, applies to a contract whether made
25
before, at or after the commencement of that item.
26
29 Appointment of members of the Corporation
27
The amendment made by item 12 of this Schedule does not affect the
28
appointment of a member holding office at the commencement of that
29
item.
30
Schedule 1
Establishing a cyclone and related damage reinsurance pool
Part 2
Application of amendments
22
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance
Pool) Bill 2022
No. , 2022
30 Directions given by the Minister
1
A direction in force under section 38 of the
Terrorism Insurance Act
2
2003
immediately before the commencement of items 21 and 22 of this
3
Schedule has effect at and after that commencement as if it had been
4
made under that section as amended by those items.
5
[Index] [Search] [Download] [Related Items] [Help]