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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Home Building Amendment (Compensation
Reform) Bill 2017
Contents
Page
1 Name of Act 2
2 Commencement 2
Schedule 1 Amendment of Home Building Act 1989 No 147 3
Schedule 2 Amendment of other legislation 41
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, , 2017
New South Wales
Home Building Amendment (Compensation
Reform) Bill 2017
Act No , 2017
An Act to amend the Home Building Act 1989 with respect to insurance and alternative indemnity
cover in relation to residential building work and the licensing of insurers and alternative
indemnity cover providers; 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.
Assistant Speaker of the Legislative Assembly.
Home Building Amendment (Compensation Reform) Bill 2017 [NSW]
The Legislature of New South Wales enacts:
1 Name of Act
This Act is the Home Building Amendment (Compensation Reform) Act 2017.
2 Commencement
This Act commences on a day or days to be appointed by proclamation.
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Home Building Amendment (Compensation Reform) Bill 2017 [NSW]
Schedule 1 Amendment of Home Building Act 1989 No 147
Schedule 1 Amendment of Home Building Act 1989 No 147
[1] Section 3B Date of completion of residential building work
Omit "the Home Building Compensation Fund" from section 3B (5). Insert instead "Part 6".
[2] Sections 3C (4) and 103BA (4)
Omit "the Home Building Compensation Fund" wherever occurring.
Insert instead "Part 6".
[3] Section 7 Form of contracts (other than small jobs)
Insert after section 7 (2) (f):
(f1) the cost of cover under Part 6 or 6B (if insurance is required under
Part 6), and
[4] Section 33B General requirements for issue of certain authorities
Omit "or the Administration Corporation" from section 33B (1) (a) (ii).
[5] Section 33B (1) (a) (iii)
Omit "an insurer in relation to a claim relating to insurance under the Home Building
Compensation Fund".
Insert instead "an insurer or provider in relation to a claim relating to cover under Part 6 or
Part 6B".
[6] Sections 48A (2) (a), 48K (6) and 48P
Omit "contract of insurance" wherever occurring. Insert instead "building cover contract".
[7] Section 69 Protection if complaint lodged
Omit "under a contract of insurance entered into for the purposes of Part 6".
Insert instead "or provider under a building cover contract".
[8] Section 69
Omit "contractor insured under such a contract".
Insert instead "person covered by the contract".
[9] Section 69
Omit "insured" where secondly occurring. Insert instead "person covered by the contract".
[10] Part 6, heading
Omit "under Home Building Compensation Fund".
[11] Part 6, Division 1, heading
Insert before Division 2:
Division 1 Preliminary
[12] Part 6, Division 2, heading
Insert "requirements" after "Insurance".
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Home Building Amendment (Compensation Reform) Bill 2017 [NSW]
Schedule 1 Amendment of Home Building Act 1989 No 147
[13] Sections 90 and 91
Move the sections to Division 1 of Part 6.
[14] Section 91A Market practice and claims handling guidelines
Omit the section.
[15] Sections 92 and 96
Insert at the end of sections 92 (1) and 96 (2B), respectively:
Note. Part 6B (see section 104B) provides that the requirement to obtain insurance
under this section may be met by obtaining coverage through an alternative indemnity
product.
[16] Section 95 No insurance for owner-builder work
Omit "the Home Building Compensation Fund" from the note to section 95 (1).
Insert instead "this Part".
[17] Section 96 Insurance in relation to residential building work not carried out under
contract
Omit "Secretary" from section 96 (2B). Insert instead "Authority".
[18] Section 96A Obligations of developers in relation to insurance
Omit "Secretary" from section 96A (1A). Insert instead "Authority".
[19] Section 97 Exemptions from insurance requirements
Omit "Secretary" wherever occurring. Insert instead "Authority".
[20] Part 6, Division 3, heading
Insert after section 98:
Division 3 Insurance contracts and premiums
[21] Section 99 Requirements for insurance for residential building work done under
contract
Insert after section 99 (3):
(4) Despite any other provision of this section, a contract of insurance in relation
to residential building work required by section 92 may consist of 2 separate
contracts of insurance if:
(a) one contract (a construction period insurance contract) insures
against:
(i) the risk specified in subsection (1) (a), and
(ii) the risk specified in subsection (1) (b) in a case of
non-completion of the residential building work, and
(b) the other contract (a warranty period insurance contract) insures
against the risk specified in subsection (1) (b).
(5) A warranty period insurance contract is not required to, but may, cover loss
that arises from a breach of a statutory warranty in a case of non-completion
of residential building work.
(6) A licensed insurer is not required to, but may, provide both a construction
period insurance contract and a warranty period insurance contract in relation
to the same residential building work.
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Schedule 1 Amendment of Home Building Act 1989 No 147
(7) Nothing in this section requires a person obtaining insurance for the purposes
of section 92, and who obtains insurance for that purpose by entering into
2 contracts of insurance as specified by this section, to enter into both the
construction period insurance contract and the warranty period insurance
contract with the same licensed insurer.
[22] Section 100 Requirements for insurance of work not done under contract
Omit "any such breach" from section 100 (1) (a).
Insert instead "a breach of a statutory warranty in respect of the work".
[23] Section 101A Claim form
Omit "Secretary" from section 101A (1). Insert instead "Authority".
[24] Section 102 General requirements for insurance
Omit "Minister" from section 102 (2). Insert instead "Authority".
[25] Section 102 (2)
Insert "or another licensed insurer" after "Self Insurance Corporation" where firstly
occurring.
[26] Section 102 (2)
Omit the note to the subsection.
[27] Section 102 (5A)
Insert after section 102 (5):
(5A) A contract of insurance may provide for additional matters that are not
inconsistent with this Act or any requirements of regulations made under this
Act. Without limiting this subsection, the regulations may provide examples
of additional matters that may be provided for.
[28] Section 102 (8)
Insert after section 102 (7):
(8) Nothing in this Part prevents a contract of insurance entered into under this
Part from also providing insurance cover for:
(a) loss arising in additional circumstances to those required under this
Part, or
(b) risks, or loss, that is in addition to the risks, or loss, required to be
covered under this Part.
[29] Section 102A Register of insurance and other particulars
Omit section 102A (1). Insert instead:
(1) The Authority is to maintain or cause to be maintained a register of particulars
relating to contracts of insurance, contracts or arrangements for alternative
indemnity product cover and other matters relating to insurance or alternative
indemnity product cover under this Act.
(1A) Without limiting the matters that may be included in the register by the
Authority, the register may include particulars of the following (whether
relating to matters occurring before, on or after the commencement of this
subsection):
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Schedule 1 Amendment of Home Building Act 1989 No 147
(a) certificates issued to evidence contracts or arrangements entered into
under this Part or Part 6B,
(b) claims made successfully under those contracts or arrangements.
[30] Section 102A (2A)
Insert after section 102A (2):
(2A) A licensed insurer or licensed provider is authorised to disclose particulars to
the Authority for the purposes of the register despite the Privacy and Personal
Information Protection Act 1998.
[31] Section 102A (3)
Omit "Self Insurance Corporation" wherever occurring. Insert instead "Authority".
[32] Section 103B Period of cover
Insert "(other than a construction period insurance contract)" after "contract of insurance"
in section 103B (2).
[33] Section 103B (2AA)
Insert after section 103B (2):
(2AA) A construction period insurance contract must provide insurance cover for loss
insured in accordance with this Act for a period of not less than 12 months
after the failure to commence or cessation of the work the subject of the cover.
[34] Section 103B (2A)
Omit "Minister". Insert instead "Authority".
[35] Section 103BB Time limits for policies issued from 1.7.2002
Omit "the Home Building Compensation Fund" from section 103BB (1).
Insert instead "this Part".
[36] Section 103BB (2)
Omit "There is no extended claim period for a loss that arises from non-completion of
work.".
[37] Section 103BB (2A)
Insert after section 103BB (2):
(2A) Despite subsection (2), there is no extended claim period for loss that:
(a) arises from non-completion of work, or
(b) arises from a breach of a statutory warranty that is insured by a
construction period insurance contract.
[38] Section 103BC Limits on claims
Omit "under the Home Building Compensation Fund entered into before 1 July 2010" from
section 103BC (1).
Insert instead "entered into under this Part before, on or after 1 July 2010".
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Schedule 1 Amendment of Home Building Act 1989 No 147
[39] Section 103BC (3)-(5)
Insert after section 103BC (2):
(3) Except as provided by subsection (5), a contract of insurance under this Part
does not in any circumstances provide cover in respect of a loss arising from
a breach of statutory warranty if a claim has already been made to and paid by
the insurer or another insurer (whether under the same or a different contract
of insurance) or a provider of cover under Part 6B in respect of that breach to
the person or a predecessor in title of the person making the claim.
(4) Except as provided by subsection (5), a mortgagee in possession of a lot on
which there is building work that is subject to a contract of insurance under this
Part is not entitled to the benefit of that contract.
(5) A contract of insurance may provide cover in the circumstances specified in
subsection (3) or (4) if the contract expressly provides for cover in the
circumstances specified in the subsection.
[40] Sections 103BD-103BG
Insert after section 103BC:
103BD Insurance Guidelines for the determination of premiums
(1) The Insurance Guidelines may provide for the determination of insurance
premiums for contracts of insurance required to be entered into by or under
this Part.
(2) Insurance Guidelines may (without limiting the generality of subsection (1)):
(a) specify the manner in which premiums are to be determined and the
factors to be taken into account in determining premiums, and
(b) require licensed insurers to specify how they have determined
premiums, and
(c) specify the nature of the additional information and reports that the
Authority may require the licensed insurers to furnish with the
premiums they file or to justify premiums they have filed (including
with respect to estimated investment earnings, the verification of
assumptions, estimated profit, capital allocation to insurance business
under this Act and other relevant matters), and
(d) specify the maximum fee payable to the agents of the licensed insurers
and the maximum other acquisition or policy administration expenses
that licensed insurers may include in the determination of premiums
(including a specified maximum amount or a specified maximum
percentage of premium income).
103BE Premiums
(1) A licensed insurer must not charge an insurance premium for a contract of
insurance required to be entered into by or under this Part, except in
accordance with this Part.
(2) The licensed insurer must file with the Authority a premium or set of
premiums it proposes to charge.
(3) The licensed insurer may, on and from the proposed commencement date for
the premium, charge a premium that has not been rejected by the Authority
within the period allowed under this section for rejecting a premium. Except
as provided by section 103BG, the insurer must not charge any other premium
on and from that proposed commencement date.
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Schedule 1 Amendment of Home Building Act 1989 No 147
(4) The proposed commencement date for a premium is the date specified in a
filed premium as the date on and from which the proposed premium will be
charged. The proposed commencement date cannot be earlier than the end of
the period allowed for rejecting a premium but can be changed (with notice to
the Authority) to accommodate a change in the period allowed for rejecting a
premium.
(5) The period allowed for rejecting a premium is the period specified in the
Insurance Guidelines.
(6) A premium may only be rejected as provided by this section or section 103BG.
103BF Filing of premiums
(1) A licensed insurer must file its premiums with the Authority on the occasions
or with the frequency that is required by the Insurance Guidelines and may
(subject to any limitations specified in those Guidelines as to the frequency
with which premiums may be filed) file its premiums with the Authority at any
other times that the insurer considers appropriate.
(2) A licensed insurer must also file its premiums with the Authority whenever
required to do so by the Authority by notice in writing to the insurer. The
notice must allow a period of at least 8 weeks after the notice is served for
premiums to be filed.
(3) An insurer files its premiums by filing with the Authority a full set of the
insurance premiums it proposes to charge for the contracts of insurance
together with any additional information, including actuarial reports, that the
Authority may reasonably require.
(4) A licensed insurer must pay to the Authority any fees that are required by the
Insurance Guidelines to be paid by insurers in connection with the filing of
premiums by insurers.
(5) It is a condition of a licence granted to a licensed insurer under this Act that
the insurer must comply with this section.
103BG Rejection of premiums by Authority
(1) The Authority may reject an insurance premium filed with it under this
Division if it is of the opinion that:
(a) the premium is, having regard to actuarial advice and to other relevant
financial information available to the Authority, excessive or
inadequate, or
(b) the premium does not conform to the relevant provisions of the
Insurance Guidelines.
(2) Written notice of the Authority's rejection of a premium, and the reasons for
the rejection, must be given to the licensed insurer.
(3) If the Authority rejects a premium of a licensed insurer, the insurer may
request the Authority to reconsider the rejection.
(4) Pending its reconsideration, the Authority may request an actuary to determine
a provisional premium.
(5) A provisional premium so determined has effect, pending the Authority's
reconsideration, as if it were an insurance premium that may lawfully be
charged by the insurer concerned.
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Schedule 1 Amendment of Home Building Act 1989 No 147
(6) If the Authority has not withdrawn its rejection of a premium within 4 weeks
after a request to reconsider the rejection, the matter is to be arbitrated under
this section. The following provisions have effect:
(a) The Commercial Arbitration Act 2010 applies to an arbitration under
this section, subject to this Act and the regulations. The Authority and
the insurer concerned may by agreement appoint a person to act as
arbitrator in connection with the matter. Failing agreement within
7 days, paragraphs (b) and (c) apply.
(b) The Independent Pricing and Regulatory Tribunal (established by the
Independent Pricing and Regulatory Tribunal Act 1992) may act as
arbitrator to hear and determine the matter.
(c) Alternatively, that Tribunal may appoint a person to act as arbitrator in
connection with the matter. The person is to be appointed from a panel
constituted by the Minister and consisting of persons who have
appropriate knowledge and understanding of economics, general
insurance and the interests of consumers.
(d) The regulations may make provision for or with respect to the
arbitration of matters under this section.
(7) The arbitrator may determine the premium that may be charged by the licensed
insurer.
(8) The Insurance Guidelines may:
(a) specify the factors to be taken into account in determining for the
purposes of this section the reasonable cost of claims and reasonable
claim settlement expenses, and
(b) specify the factors to be taken into account in determining for the
purposes of this section whether a premium is excessive, and
(c) exclude specified costs and expenses from being taken into account as
costs and expenses of the insurer for the purposes of this section, and
(d) limit the extent to which specified costs and expenses can be taken into
account as costs and expenses of the insurer for the purposes of this
section.
[41] Section 103C Regulations
Insert "or (d)" after "subsection (2) (b)" in section 103C (3).
[42] Section 103C (4)
Insert after section 103C (3):
(4) The regulations may make provision for or with respect to the circumstances
that constitute cessation of work for the purposes of this Part.
[43] Section 103E
Omit the section. Insert instead:
103E Exemption for work done for public sector agencies
(1) This Part does not apply to or in respect of residential building work done by
or on behalf of the Crown or a State owned corporation.
(2) If the residential building work is being done under a contract, the exemption
from this Part will not apply unless the contract under which the work is
carried out specifies that the person is relying on the exemption under this
section.
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Schedule 1 Amendment of Home Building Act 1989 No 147
(3) The regulations may specify that the exemption does not apply in the
circumstances specified by the regulations and may impose conditions on the
exemption.
(4) Regulations may be made for or with respect to the inclusion of consumer
warnings in contracts for the sale of land on which residential building work
was carried out by a person who was subject to the exemption.
(5) In this section:
Crown has the same meaning as in the Crown Proceedings Act 1988.
[44] Section 103EA False or misleading applications for insurance
Omit "an insurer for insurance under the Home Building Compensation Fund" from
section 103EA (1).
Insert instead "a licensed insurer for insurance under this Part".
[45] Section 103EB
Insert after section 103EA:
103EB False or misleading conduct by insurers and insurance intermediaries
(1) In this section:
insurance intermediary means:
(a) a person who arranges contracts of insurance in New South Wales:
(i) for reward, or
(ii) as an agent for a person carrying on a business of insurance, or
(b) a financial services licensee (as defined in section 761A of the
Corporations Act 2001 of the Commonwealth) whose licence covers
arranging contracts of insurance as an agent for a person carrying on a
business of insurance, or
(c) a regulated principal (as defined in section 1430 of the Corporations Act
2001 of the Commonwealth) when carrying on business as an insurance
broker as authorised by Subdivision D of Division 1 of Part 10.2 of that
Act.
insurer means a person who carries on insurance business as defined in the
Insurance Act 1973 of the Commonwealth.
(2) An insurer or insurance intermediary must not make a representation with
respect to any insurance (whether by means of an advertisement or otherwise)
that could reasonably be expected to cause a person to believe that the
insurance meets the requirements of this Act, unless the insurance meets those
requirements.
(3) An insurer or insurance intermediary who contravenes this section is guilty of
an offence.
Maximum penalty: 200 penalty units.
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Schedule 1 Amendment of Home Building Act 1989 No 147
[46] Part 6, Divisions 4 and 5
Insert before Part 6A:
Division 4 Insurance Guidelines
103EC State Insurance Regulatory Authority may issue guidelines
The Authority may issue Insurance Guidelines with respect to the following
matters:
(a) appropriate market practices or claims handling procedures (or both) in
connection with the provision of insurance under this Part by a licensed
insurer,
(b) prudential standards and the application of those standards to licensed
insurers,
(c) contracts of insurance, including eligibility requirements for obtaining
insurance and underwriting of contracts of insurance,
(d) review of compliance with any such eligibility requirements.
103ED Insurance Guidelines--general provisions
(1) The Authority may issue Insurance Guidelines with respect to any matter that
is authorised or required by or under this Act to be provided for by Insurance
Guidelines.
(2) The Authority may amend, revoke or replace Insurance Guidelines.
(3) The Authority is:
(a) to consult with the licensed insurers or providers before it issues,
amends, revokes or replaces Insurance Guidelines relating to premiums
or market practices, and
(b) to provide reasonable notice of any amendment to, or replacement of,
Guidelines before it takes effect.
(4) Insurance Guidelines may adopt the provisions of other publications, whether
with or without modification or addition and whether in force at a particular
time or from time to time.
(5) Insurance Guidelines must not be inconsistent with this Act or the regulations.
(6) Insurance Guidelines are to be published on the NSW legislation website and
take effect on the day of that publication or, if a later day is specified in the
Guidelines for that purpose, on the day so specified.
(7) It is a condition of a licence under Part 6C that the licence holder comply with
relevant provisions of the Insurance Guidelines.
Note. The Self Insurance Corporation is required, by section 8A of the NSW Self
Insurance Corporation Act 2004, to comply with the Insurance Guidelines.
103EE Regulations relating to Guidelines
(1) The regulations may make provision with respect to the issue of Insurance
Guidelines.
(2) The regulations may make provision with respect to any matter for which
Insurance Guidelines may be issued. In that case, the regulations prevail to the
extent of any inconsistency with the Insurance Guidelines and a reference in
this Act to those Guidelines includes a reference to those regulations.
Note. Insurance Guidelines may be made about matters relating to alternative
indemnity products (see section 104E).
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Schedule 1 Amendment of Home Building Act 1989 No 147
Division 5 Home Building Operational Fund
103EF Home Building Operational Fund
(1) There is established a fund, to be known as the Home Building Operational
Fund, belonging to and vested in the Authority.
(2) The following is to be paid into the Fund:
(a) money required to be contributed to or otherwise paid into the Fund by
or under this or any other Act,
(b) the interest from time to time accruing from the investment of the Fund.
(3) The following is to be paid from the Fund:
(a) the remuneration, allowances, office accommodation and other
associated costs of the Board of the Authority and the members of staff
of the Authority to the extent that those costs relate to the administration
of this Act,
(b) all payments required to meet expenditure incurred in relation to the
functions of the Authority under this Act, where money is not otherwise
provided for that purpose,
(c) all other money required by or under this or any other Act to be paid
from the Fund.
(4) The Authority may invest money in the Fund which is not immediately
required for the purposes of the Fund:
(a) in any manner authorised by the Public Authorities (Financial
Arrangements) Act 1987, or
(b) if that Act does not confer power on the Authority to invest money in
the Fund--in any other manner approved by the Minister with the
concurrence of the Treasurer.
103EG Payment of contributions by licensed insurers
(1) Licensed insurers are to pay contributions to the Home Building Operational
Fund in respect of a relevant period, and of an amount, determined by the
Authority. Contributions are to be made in accordance with the arrangements
prescribed by the regulations.
(2) The Authority is to take the following steps for determining the contribution
payable to the Fund by licensed insurers for a relevant period:
(a) estimate the total of the amounts to be paid from the Fund during that
relevant period,
(b) determine what amounts, if any, are to be set aside as provisions to meet
expenditure from the Fund in future periods, and specify for what
purpose each amount is being set aside,
(c) estimate the total amounts (including the amounts already received) to
be received into the Fund during that relevant period otherwise than by
way of contributions in respect of that relevant period under this
Division from licensed insurers,
(d) determine the total amount to be contributed to the Fund under this
Division in respect of that relevant period by licensed insurers after
having regard to the amounts likely to be standing to the credit of the
Fund at the beginning of the period (including any amounts set aside in
earlier periods as provisions to meet expenditure in later periods) and
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Schedule 1 Amendment of Home Building Act 1989 No 147
the amounts estimated under paragraph (c) to be received into the Fund
during the relevant period,
(e) specify in writing the estimates, provisions and amounts to be
contributed to the Fund by licensed insurers.
(3) It is a condition of the licence of a licensed insurer that the insurer pay
contributions in accordance with this section.
(4) A relevant period is a financial year or any other period that the Authority
determines from time to time to be a relevant period for the purposes of this
section. Relevant periods can be determined so as to overlap but there must be
no gap between successive relevant periods and each relevant period must not
be longer than 12 months.
(5) The Authority may determine different contributions for different classes of
licensed insurers and may determine that a licensed insurer or class of licensed
insurers is not liable to pay a contribution in respect of a financial year.
(6) A contribution that is payable under this section may be recovered by the
Authority in a court of competent jurisdiction as a debt due to the Authority.
(7) In this section:
financial year means a year commencing on 1 July.
[47] Section 103F Interpretation
Omit the definition of insurer from section 103F (1). Insert in alphabetical order:
claims administrator means:
(a) in relation to a matter involving a contract of insurance entered into
under Part 6 by a former approved insurer as such an insurer--the
Guarantee Corporation, or
(b) in relation to any other matter involving a contract of insurance entered
into under Part 6--the Authority.
former approved insurer means an insurer that was formerly approved by the
Minister under section 103A as in force before its repeal by the NSW Self
Insurance Corporation Amendment (Home Warranty Insurance) Act 2010.
guarantee fund means:
(a) in relation to a matter involving a contract of insurance entered into
under Part 6 by a former approved insurer as such an insurer--the
Building Insurers' Guarantee Fund, or
(b) in relation to any other matter involving a contract of insurance entered
into under Part 6--the Home Building Insurers Guarantee Fund.
insurer means:
(a) a former approved insurer, or
(b) a licensed insurer (other than the Self Insurance Corporation),
but does not include an insolvent insurer.
[48] Sections 103J, 103K (1), 103L (where firstly occurring), 103M (1) (where firstly
occurring), 103S (1A), 103V (where firstly occurring) and 103X (2) (where firstly
occurring)
Omit "the Guarantee Corporation" wherever occurring.
Insert instead "a claims administrator".
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Schedule 1 Amendment of Home Building Act 1989 No 147
[49] Sections 103K (3) and (4), 103L (where secondly and thirdly occurring), 103M (1)
(where secondly occurring), (2) and (3), 103N, 103V (where secondly occurring),
103W, 103X (2) (a) and (b), 103Z and 103ZB
Omit "Guarantee Corporation" wherever occurring. Insert instead "claims administrator".
[50] Sections 103L, 103N (1) (b) and (2) and 103ZB (where secondly occurring)
Omit "Building Insurers' Guarantee Fund" wherever occurring.
Insert instead "guarantee fund".
[51] Section 103N Claims administrator may require builder to make payments or
rectification
Omit "Fund" where secondly occurring in section 103N (2).
Insert instead "guarantee fund".
[52] Sections 103OA and 103OB
Insert after section 103O:
103OA Home Building Insurers Guarantee Fund
(1) There is established a Fund, to be known as the Home Building Insurers
Guarantee Fund.
(2) The Fund is, subject to this Act, under the direction, control and management
of the Authority.
(3) The following is to be paid into the Fund:
(a) money contributed under section 103OB,
(b) the interest and any other amounts accruing from the investment of the
Fund,
(c) money recovered by the Authority under this Part, including money
recovered by the Authority by the exercise of a beneficiary's rights
assigned to the Authority under this Part,
(d) money borrowed for the purposes of the Fund,
(e) money required to be paid into the Fund by or under this or any other
Act.
(4) The following is to be paid from the Fund:
(a) money required to be paid from the Fund by this Part,
(b) payments relating to the costs and expenses of the Authority incurred in
or in connection with the exercise of its functions under this Part,
(c) repayments of money borrowed for the purposes of the Fund.
(5) The Authority may invest money in the Fund which is not immediately
required for the purposes of the Fund:
(a) in any manner authorised by the Public Authorities (Financial
Arrangements) Act 1987, or
(b) if that Act does not confer power on the Authority to invest money in
the Fund--in any other manner approved by the Minister with the
concurrence of the Treasurer.
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103OB Contributions to Home Building Insurers Guarantee Fund
(1) Licensed insurers are to pay contributions to the Home Building Insurers
Guarantee Fund in respect of a relevant period, and of an amount, determined
by the Authority. Contributions are to be made in accordance with the
arrangements prescribed by the regulations.
(2) The Authority is to have regard to the sufficiency of the Fund to manage the
risk of insurers becoming insolvent when determining the contribution
payable to the Fund by licensed insurers for a relevant period.
(3) It is a condition of the licence of a licensed insurer that the insurer pay
contributions in accordance with this section.
(4) A relevant period is a financial year or any other period that the Authority
determines from time to time to be a relevant period for the purposes of this
section. Relevant periods can be determined so as to overlap but there must be
no gap between successive relevant periods and each relevant period must not
be longer than 12 months.
(5) The Authority may determine different contributions for different classes of
licensed insurers and may determine that a licensed insurer or class of licensed
insurers is not liable to pay a contribution in respect of a relevant period.
(6) A contribution that is payable under this section may be recovered by the
Authority in a court of competent jurisdiction as a debt due to the Authority.
(7) In this section:
financial year means a year commencing on 1 July.
[53] Part 6A, Division 3, heading
Omit "Miscellaneous".
Insert instead "Administrative and financial matters relating to former approved
insurers".
[54] Part 6A, Division 4, heading
Insert before section 103S:
Division 4 Miscellaneous
[55] Section 103S Functions of claims administrators
Insert after section 103S (1):
(1AA) The Authority has the following functions:
(a) to deal with and finalise claims under this Part (other than claims
relating to insolvent former approved insurers),
(b) to hold and manage the Home Building Insurers Guarantee Fund in
accordance with this Act.
[56] Sections 103S (2) and (3) and 103U
Omit "The Guarantee Corporation" wherever occurring.
Insert instead "A claims administrator".
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[57] Section 103V Recovery of amounts under contracts or arrangements for
re-insurance or co-insurance
Omit "the Building Insurers' Guarantee Fund" where firstly occurring.
Insert instead "a guarantee fund".
[58] Section 103V
Omit "the Building Insurers' Guarantee Fund" where secondly occurring.
Insert instead "the guarantee fund".
[59] Section 103ZB Recovery of amounts under guarantees or indemnities
Omit "the Building Insurers' Guarantee Fund" where firstly occurring.
Insert instead "a guarantee fund managed by a claims administrator".
[60] Part 6B
Insert after Part 6A:
Part 6B Alternative indemnity products
104 Alternative indemnity products
In this Act:
alternative indemnity product means:
(a) a fidelity fund scheme, or
(b) a specialised insurance arrangement, or
(c) any other insurance product or arrangement prescribed by the
regulations for the purposes of this Part.
provider of an alternative indemnity product means a person who provides an
alternative indemnity product and includes the trustee of any fidelity fund
under a fidelity fund scheme.
104A Approval of alternative indemnity products
(1) The Authority may approve the use of an alternative indemnity product to
provide cover for loss of a kind that is required to be covered by an insurance
contract under Part 6 for at least the period for which any such cover is
required to be provided.
(2) The Authority must not approve an alternative indemnity product unless it is
satisfied that the product will provide cover for loss of that kind.
(3) An approval may be unconditional or subject to conditions.
104B Alternative indemnity product may be used instead of insurance
(1) A person who does residential building work and who obtains cover by means
of an alternative indemnity product that complies with an approval of the
Authority, this Part and regulations made under this Part is taken to have
complied with any applicable requirement that a contract of insurance under
Part 6 must be in force in relation to the building work.
(2) Evidence of cover by means of an alternative indemnity product, in the form
prescribed by the regulations, is taken to be evidence of a contract of insurance
(including a certificate of insurance) for the purposes of this Act or the
regulations.
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(3) Sections 90, 92 (5), 92A, 92C, 94, 95, 96 (4), 96A (1A), 99 (2A)-(3), 100 (2),
101, 101A, 102 (other than subsection (1)), 102A, 103C-103E and 103EA
apply to or in respect of an alternative indemnity product in the same way as
they apply to or in respect of a contract of insurance, subject to any necessary
modifications.
(4) The regulations may modify the application of the provisions referred to in
subsection (3) to an alternative indemnity product.
Note. Providers are required to be licensed under Part 6C.
104C Regulation of alternative indemnity cover
(1) Regulations may be made for or with respect to the following:
(a) the information required to be provided to the provider of an alternative
indemnity product by the person to whom the cover is provided,
(b) the loss to be covered by alternative indemnity products,
(c) the period of cover to be provided by an alternative indemnity product,
(d) limits on claims generally,
(e) the determination of and rejection of premiums or equivalent charges
payable for cover by an alternative indemnity product,
(f) actuarial or auditing requirements for providers of alternative indemnity
products,
(g) the disclosure of data and other information by or to, or about, providers
or former providers of alternative indemnity products,
(h) prohibiting false or misleading conduct by providers of alternative
indemnity products and persons who arrange cover under any such
products,
(i) provision for dealing with arrangements made for alternative indemnity
product cover if the provider's licence is cancelled,
(j) contributions to the Home Building Operational Fund by licensed
providers of alternative indemnity products.
(2) For the purposes of providing for a matter for which regulations may be made
under this Part, the regulations may:
(a) apply provisions of this Act (including relevant offences) that apply to
or in respect of contracts of insurance or insurance under Part 6, with
necessary modifications, to or in respect of alternative indemnity
products, and
(b) apply provisions of this Act (including relevant offences) that apply to
or in respect of insurers or former insurers, with necessary
modifications, to or in respect of providers or former providers of
alternative indemnity products.
104D Insolvent providers
(1) Part 6A applies to or in respect of a provider of an alternative indemnity
product in the same way that it applies to or in respect of an insurer.
(2) The regulations may provide for circumstances in which the provider of a
fidelity fund scheme is taken to be insolvent for the purposes of that Part.
(3) The regulations may provide for additional circumstances in which the
provider of an alternative indemnity product is taken to be insolvent for the
purposes of that Part.
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104E Insurance Guidelines relating to alternative indemnity products
(1) The Authority may issue Insurance Guidelines with respect to the following
matters:
(a) the requirements for approval of an alternative indemnity product,
(b) the determination of premiums or other charges for provision of cover
by means of alternative indemnity products, including any matter of a
kind specified in section 103BD (2),
(c) appropriate market practices or claims handling procedures (or both) in
connection with the provision of alternative indemnity products by a
licensed provider,
(d) prudential standards and the application of those standards to licensed
providers,
(e) alternative indemnity products, including eligibility requirements for
obtaining cover and underwriting of products,
(f) the review of compliance with any such eligibility requirements.
(2) An Insurance Guideline issued for the purposes of this Act in relation to a
provider or an alternative indemnity product may be referred to as an AIP
Guideline.
[61] Part 6C
Insert before Part 7:
Part 6C Insurers and providers
Division 1 Licences
105 Definition
In this Part:
licence holder means a licensed insurer or a licensed provider.
105A Offence--unlicensed insurers and providers
(1) A person must not enter into a contract of insurance to provide insurance under
Part 6 unless the person is a licensed insurer.
Maximum penalty: 1,000 penalty units.
(2) A person must not enter into a contract or arrangement to provide cover by
means of an alternative indemnity product unless the person is a licensed
provider.
Maximum penalty: 1,000 penalty units.
(3) If a person contravenes this section, or any condition to which a licence under
this Part is subject, the building cover contract remains a valid contract or
arrangement and the contravention does not annul or affect the building cover
contract or affect the liability of the insurer or provider to the person covered
under the building cover contract.
105B Self Insurance Corporation taken to be licensed insurer
(1) The Self Insurance Corporation is taken to be a licensed insurer for the
purposes of this Act.
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(2) The Authority may, by written notice served on the Corporation, impose
conditions on the exercise by the Corporation of functions as a licensed insurer
under this Act and vary or revoke any such condition.
Note. Section 105I sets out some of the matters about which conditions may be
imposed.
(3) The Corporation must comply with a condition imposed by the Authority.
(4) A condition cannot be imposed, revoked or varied except with the approval of
the Board of the Authority.
105C Applications for insurer licences
(1) An application for a licence as a licensed insurer under this Part may be made
to the Authority by any corporation that carries on insurance business within
the meaning of the Insurance Act 1973 of the Commonwealth.
(2) An application cannot be made by a corporation that is required to be
authorised to carry on that business under that Act unless the corporation is so
authorised.
105D Applications for provider licences
(1) An application for a licence as a licensed provider under this Part may be made
by the provider of an alternative indemnity product, subject to any
qualifications for applicants prescribed by the regulations.
(2) An application for a licence as a licensed provider to provide cover under a
fidelity fund scheme must be made to the Authority jointly by all of the
trustees of the fund.
105E Application requirements
(1) An application for a licence is to be made in the manner and accompanied by
the documents (if any) determined by the Authority.
(2) An application for a joint licence may be made by 2 or more persons.
(3) Without affecting the generality of subsection (1), an applicant for a licence
may be required to furnish the following particulars and documents:
(a) particulars of the shareholders, directors and other managers of the
applicant,
(b) previous returns and accounts under the Corporations Law, the
Corporations Act 2001 of the Commonwealth and the Insurance Act
1973 of the Commonwealth,
(c) particulars of re-insurance arrangements to which the applicant is a
party,
(d) a draft business plan under section 105S.
(4) In addition to the matter specified in subsection (3), an applicant for a licence
as a licensed provider to provide cover under a fidelity fund scheme must
furnish the following:
(a) particulars of all of the trustees of the fund,
(b) a copy of the trust deed for the fund certified in accordance with the
requirements of the regulations (if any),
(c) particulars of any insurance arrangements to underwrite the liabilities of
the Fund.
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(5) A person who, in or in connection with an application for a licence, makes a
statement knowing that it is false or misleading in a material particular is guilty
of an offence.
Maximum penalty: 500 penalty units or imprisonment for 2 years, or both.
105F Determination of application for licence
(1) The Authority is to consider each application for a licence under this Part and
may:
(a) grant a licence to the applicant, or
(b) refuse the application.
(2) The Authority may, in determining an application for a licence as a licensed
insurer, take into consideration:
(a) the suitability of the applicant, and
(b) the paid-up share capital and reserves of the applicant, and
(c) the constitution of the applicant (if any), and
(d) the re-insurance arrangements of the applicant, and
(e) the efficiency of the insurance scheme (including any alternative
arrangements under Part 6B) under this Act generally, and
(f) any applicable Insurance Guidelines, and
(g) any other matters that the Authority thinks fit.
(3) The Authority may, in determining an application for a licence as a licensed
provider, take into consideration:
(a) the suitability of the applicant, and
(b) the efficiency of the insurance scheme (including any alternative
arrangements under Part 6B) under this Act generally, and
(c) any applicable Insurance Guidelines, and
(d) any other matters that the Authority thinks fit.
(4) The Authority may request an applicant for a licence to provide further
information before determining the application.
(5) Despite subsection (1), the Authority must refuse an application for a licence
from a corporation or other person who does not comply with any
requirements that are prescribed by the regulations for the purposes of this
section or set out in Insurance Guidelines made under this section.
(6) The Insurance Guidelines may specify eligibility criteria for a licence under
this Part.
(7) A licence must not be granted under this Part unless the applicant has paid (or
has made arrangements acceptable to the Authority for the payment of) the fee
determined by the Authority for the grant of the licence.
(8) When the Authority proposes to grant a licence, it must give 14 days notice of
the proposal to all licence holders specifying the name of the proposed licence
holder.
105G Duration of licences
(1) A licence granted under this Part is in force for the period specified in the
licence, unless sooner cancelled under this Act.
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(2) If a licence is suspended under this Part:
(a) it has no effect during any period of suspension, and
(b) the suspension does not extend the period for which the licence is in
force.
105H Conditions of licences
(1) A licence granted under this Part is subject to:
(a) any conditions that are prescribed by this Act or the regulations, and
(b) any conditions (not inconsistent with this Act or the regulations) that are
imposed by the Authority:
(i) on the granting of the licence, or
(ii) at any time during the currency of the licence.
(2) The Authority may, by written notice served on a licence holder, impose
conditions (or further conditions) to which the licence is to be subject or
revoke or vary any condition imposed on the licence by the Authority.
(3) A condition cannot be imposed, revoked or varied except with the approval of
the Board of the Authority.
(4) A condition to which a licence is subject has effect whether or not it is
endorsed on the licence.
(5) A licence holder who contravenes, whether by act or omission, any condition
to which the licence is subject is guilty of an offence.
Maximum penalty: 1,000 penalty units.
(6) An insurer or provider (not being a licence holder) who contravenes, whether
by act or omission, any obligation imposed by this Act on the holder in
connection with insurance or an alternative indemnity product, being an
obligation that is declared by this Act to be a condition of a licence under this
Part, is guilty of an offence.
Maximum penalty: 1,000 penalty units.
(7) A licence holder cannot be convicted of an offence under subsection (5) and
required to pay a civil penalty under section 105M in respect of the same act
or omission.
105I Matters that may be regulated by conditions of licences
Without limiting the generality of section 105H, the conditions to which a
licence under this Part may be subject, or to which the Self Insurance
Corporation may be subject, include conditions:
(a) for the purpose of ensuring compliance with the obligations of the
licence holder, or
(b) requiring the licence holder to undertake a specified amount of
insurance or alternative indemnity product cover, or insurance or
alternative indemnity product cover of a specified kind, or
(c) requiring a charge or other security to be taken by the Authority in
respect of the assets of a licence holder, or otherwise requiring the
licence holder to provide security, for the purpose of securing the
payment of the licence holder's liabilities (including contingent
liabilities) for the payment of compensation under this Act, or
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(d) specifying the persons, or classes of persons, to whom the licence
holder may provide insurance or cover by means of alternative
indemnity products, or
(e) for the purpose of ensuring that premiums or charges are available to
meet claims, or
(f) for the purpose of the efficiency of the insurance scheme (including any
alternative arrangements under Part 6B) under this Act generally, or
(g) relating to the provision of information concerning claims and profits,
or
(h) if the licence relates to the provision of cover under a fidelity fund
scheme, relating to:
(i) compliance with the scheme's trust deed, or
(ii) requirements for appointment as a trustee, or
(iii) the functions of trustees, or
(iv) the financial management of the scheme.
105J Matters not subject to conditions of licences
(1) A condition of a licence under this Part must not be prescribed by the
regulations or imposed, revoked or varied by the Authority if this would give
or be likely to give a competitive advantage to the licence holder over other
licence holders.
(2) A condition of a licence under this Part that requires or has the effect of
requiring a licence holder to obtain a share of the insurance market or the
alternative indemnity product market specified in or determined in accordance
with the terms of the condition is of no effect.
(3) This section has effect despite anything to the contrary in sections 105H
and 105I.
(4) This section does not prevent the imposition as a condition of a licence under
this Part of a condition that limits the kinds of building cover contracts that can
be entered into by the licence holder under this Act, for example a condition
that limits an insurer to contracts insuring for particular risks.
(5) This section does not apply to the Self Insurance Corporation.
105K Assignment of licences
(1) A licence holder may, with the approval of the Authority, assign its licence to
another licence holder or to an insurer or provider to whom the Authority
proposes to grant a licence.
(2) The Authority must not approve the assignment of a licence unless the
Authority is satisfied that the proposed assignee is able to meet the past,
present and future liabilities of the assignor:
(a) under any building cover contract in respect of which the assignor is the
insurer or provider, and
(b) to the Home Building Operational Fund or a guarantee fund under
Part 6A, and
(c) to any other licence holder.
(3) The Authority may approve the assignment subject to conditions and may, for
that purpose, impose conditions on or revoke or vary conditions of the licence.
(4) This section does not apply to the Self Insurance Corporation.
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105L Suspension of licences
(1) The Authority may, by notice served on a licence holder, suspend the holder's
licence and the holder is thereby prohibited from entering into any building
cover contracts after the date that is specified in the notice for the purpose.
(2) A licence holder who contravenes, whether by act or omission, the terms of
any such notice is guilty of an offence.
Maximum penalty: 1,000 penalty units.
(3) A suspension of a licensed insurer's licence may be effected only if:
(a) subject to subsection (5), the insurer has contravened its licence or this
Act or the regulations, or
(b) the insurer ceases to be a person who carries on insurance business
within the meaning of the Insurance Act 1973 of the Commonwealth or
to hold any authorisation under that Act that the person is required to
hold, or
(c) a provisional liquidator, liquidator or official liquidator, or a receiver,
receiver and manager, official manager or trustee, is appointed over all
or any part of the assets or undertaking of the insurer, or
(d) the insurer is given a direction under Part IX of the Insurance Act 1973
of the Commonwealth or an inspector is appointed to investigate the
affairs of the insurer under Part V of that Act, or
(e) after receiving a report under section 105Y, the Authority is of the
opinion that the insurer is, or is likely to become, unable to meet its
liabilities under this Act or under contracts of insurance under Part 6, or
(f) there is any default by the insurer in the payment of principal or interest
in excess of $100,000 under any debenture, or series of debentures,
issued by the insurer (except where the default occurs because the
insurer genuinely disputes its liability to make the payment), or
(g) the insurer enters into, or resolves to enter into, any arrangement,
composition or compromise with its creditors or any assignment for the
benefit of its creditors, or proceedings are commenced to sanction any
such arrangement, composition, compromise or assignment (except for
the purposes of a reconstruction or amalgamation, on terms that have
been approved by the Authority), or
(h) an application (other than a frivolous or vexatious application) or an
order is made for the winding up or dissolution of the insurer or a
resolution is passed for the winding up or dissolution of the insurer
(except for the purposes of a reconstruction or amalgamation, on terms
that have been approved by the Authority), or
(i) there is a change in the effective control of the insurer or the insurer
becomes a subsidiary of a company of which it was not a subsidiary at
the date of the issue of its licence, or
(j) the Authority is of the opinion that the insurer has failed to comply at
any time with a condition imposed on its authority to carry on insurance
business under the Insurance Act 1973 of the Commonwealth, or
(k) a person claiming to be a creditor by assignment or otherwise of the
insurer for a sum exceeding $100,000 then due has served on the
insurer, by leaving at its registered office, a demand requiring the
insurer to pay the sum so claimed to be due, and the insurer has for
3 weeks thereafter failed to pay the sum or to secure or compound for it
to the satisfaction of the person claiming to be a creditor, or
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(l) there is returned unsatisfied, in whole or part, any execution or other
process issued on a judgment, decree or order of any court in favour of
a creditor of the insurer and the amount unsatisfied exceeds $100,000,
or
(m) the insurer has agreed to the suspension.
(4) A suspension of a licensed provider's licence may be effected only if:
(a) subject to subsection (5), the provider has contravened its licence or this
Act or the regulations, or
(b) a provisional liquidator, liquidator or official liquidator, or a receiver,
receiver and manager, official manager or trustee, is appointed over all
or any part of the assets or undertaking of the provider, or
(c) after receiving a report under section 105Y, the Authority is of the
opinion that the provider is, or is likely to become, unable to meet its
liabilities under this Act or under contracts or arrangements under
Part 6B, or
(d) there is any default by the provider in the payment of principal or
interest in excess of $100,000 under any debenture, or series of
debentures, issued by the provider (except where the default occurs
because the provider genuinely disputes its liability to make the
payment), or
(e) the provider enters into, or resolves to enter into, any arrangement,
composition or compromise with its creditors or any assignment for the
benefit of its creditors, or proceedings are commenced to sanction any
such arrangement, composition, compromise or assignment (except for
the purposes of a reconstruction or amalgamation, on terms that have
been approved by the Authority), or
(f) an application (other than a frivolous or vexatious application) or an
order is made for the winding up or dissolution of the provider or a
resolution is passed for the winding up or dissolution of the provider
(except for the purposes of a reconstruction or amalgamation, on terms
that have been approved by the Authority), or
(g) there is a change in the effective control of the provider or the provider
becomes a subsidiary of a company of which it was not a subsidiary at
the date of the issue of its licence, or
(h) a person claiming to be a creditor by assignment or otherwise of the
provider for a sum exceeding $100,000 then due has served on the
provider, by leaving at its registered office, a demand requiring the
provider to pay the sum so claimed to be due, and the provider has for
3 weeks thereafter failed to pay the sum or to secure or compound for it
to the satisfaction of the person claiming to be a creditor, or
(i) there is returned unsatisfied, in whole or part, any execution or other
process issued on a judgment, decree or order of any court in favour of
a creditor of the provider and the amount unsatisfied exceeds $100,000,
or
(j) any of the circumstances set out in subsection (3) (b), (d) or (j) apply to
the provider, or
(k) the provider has agreed to the suspension.
(5) If a contravention by a licence holder of its licence or this Act or the
regulations is capable, in the opinion of the Authority, of being remedied
within 21 days after the contravention occurred (or any longer period that the
Authority, having regard to the nature of the contravention and the need to
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protect the interests of insured persons and other persons, may reasonably
allow), the Authority must not suspend the licence during that period.
(6) The Authority may, by notice served on a licence holder, terminate the
suspension of the holder's licence if the Authority is satisfied that the holder
is able to comply with the requirements that would be imposed on the holder
if it were then to be granted a licence for the first time.
(7) This section does not apply to the Self Insurance Corporation.
105M Imposition of civil penalty on or censure of licence holder
(1) If the Authority is satisfied that a licence holder has contravened its licence or
this Act or the regulations, the Authority may:
(a) impose a civil penalty on the holder not exceeding $110,000, or
(b) issue a letter of censure to the holder.
(2) An action under subsection (1) may be taken against a licence holder instead
of suspending the holder's licence.
(3) Before imposing a civil penalty, the Authority is required to refer the matter to
a special committee for advice and to consider any advice provided by the
committee.
(4) Any such special committee:
(a) is to comprise the Chairperson of the Board of the Authority, a nominee
of the Insurance Council of Australia Limited and another member
nominated jointly by the Authority and that Council, and
(b) is required to give the licence holder concerned an opportunity to make
written submissions with respect to the alleged contravention, but is not
required to conduct a hearing into the matter.
If that Council fails to make a nomination for the purposes of constituting any
such special committee within the time required by the Authority, the Minister
may make that nomination on its behalf.
(5) A civil penalty that has been imposed under this section may be recovered by
the Authority in a court of competent jurisdiction as a debt due to the
Authority.
(6) A civil penalty that is paid or recovered is payable into the Home Building
Operational Fund.
(7) Subsection (2) does not apply to the Self Insurance Corporation.
105N Cancellation of licences
(1) The Authority may, by notice served on the licence holder, cancel a licence
granted under this Part.
(2) The Authority may cancel a licence for any reason it thinks fit, but must give
the reasons for its decision.
(3) Without affecting the generality of subsection (2), the Authority may cancel a
licence for reasons that relate to the insurance scheme under Part 6 (including
any alternative arrangements under Part 6B) generally, whether or not the
reasons relate to the efficiency and conduct of the licence holder.
(4) The Authority must, as far as practicable, give a licence holder whose licence
it proposes to cancel an opportunity to make representations on the matter.
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(5) A licence surrendered by a licence holder is not cancelled until the Authority
approves of the surrender.
(6) The Authority must not cancel a licence unless the Authority is satisfied that
the licence holder has discharged all of its past, present and future liabilities:
(a) under any building cover contract in respect of which it is the insurer or
provider, and
(b) to the Home Building Operational Fund or a guarantee fund under
Part 6A, and
(c) to any other licence holder,
or that the holder has provided security or entered into other arrangements
satisfactory to the Authority in respect of those liabilities.
(7) If the Authority is unable to cancel a licence because of any such liabilities, the
Authority may, instead, impose a condition on the licence that prohibits the
licence holder from entering into any further building cover contracts.
(8) This section does not apply to the Self Insurance Corporation.
105O Assignment of contracts of insurance following cancellation of licence and in
other cases
(1) In this section:
licensed insurer includes an insurer whose licence has been cancelled or has
otherwise ceased to be in force.
(2) The Authority may assign the contracts of insurance of a licensed insurer to
another licensed insurer with the agreement of that other insurer if:
(a) the licence of the licensed insurer is cancelled or otherwise ceases to be
in force, or
(b) the Authority is satisfied that it is necessary to do so to ensure
compliance with any conditions to which a licence is subject.
(3) Contracts may be assigned under this section by notice served by the Authority
on the insurers concerned.
(4) On the service of any such notice:
(a) the contracts of insurance to which it relates are cancelled as from the
date and time specified in the notice, and
(b) the licensed insurer to whom those contracts are assigned is taken (as
from the time and date of cancellation) to have entered into contracts
with those covered under the assigned contracts on the same terms as,
and for the balance of the periods of, those contracts, and
(c) the licensed insurer whose contracts are assigned must provide the
insurer's records relating to the assigned contracts to the insurer to
whom the contracts are assigned.
(5) On the cancellation of a contract under subsection (4) (a), the insurer whose
contract is cancelled must pay to the insurer to whom the contract is assigned:
(a) the same proportion of the premium paid or to be paid in respect of the
contract as the balance of the indemnity period of the contract bears to
the whole indemnity period of the contract, and
(b) any additional amount that the Authority directs relating to the income
from investment and the management fee with respect to the premium.
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(6) Any amount payable under subsection (5) to a licensed insurer may be
recovered by the insurer as a debt in a court of competent jurisdiction.
(7) The effect of the cancellation of a contract under this section is to terminate
the indemnity period of the contract but, subject to this section, without
affecting any right, obligation or liability acquired, accrued or incurred under
the contract in respect of that period before its termination.
105P Records and evidence relating to licences
(1) The Authority must keep records in relation to all licences granted by the
Authority under this Part, including particulars of:
(a) the granting, refusal, conditions, suspension and cancellation of
licences, the assignment of licences and notices served under
section 105L, and
(b) any other matters relating to licences as the Authority thinks fit.
(2) A certificate purporting to be signed by the chief executive of the Authority
and certifying that on any date or during any period specified in the certificate
the particulars set forth in the certificate as to any of the matters referred to in
subsection (1) did or did not appear on or from the records is (without the
production of any record or document on which the certificate is founded)
admissible in any proceedings and is evidence of the particulars certified in
and by the certificate.
105Q Administrative reviews of licensing decisions by Civil and Administrative
Tribunal
(1) A person may apply to the Civil and Administrative Tribunal for an
administrative review under the Administrative Decisions Review Act 1997 of
any of the following decisions of the Authority under this Part:
(a) a decision to refuse the person's application for a licence,
(b) a decision to impose a condition on the person's licence,
(c) a decision to vary any condition imposed on the person's licence,
(d) a decision to refuse to grant approval to the person to assign a licence,
(e) a decision to suspend the person's licence,
(f) a decision to impose a fine on the person,
(g) a decision to cancel the person's licence.
(2) Despite the provisions of Division 2 of Part 3 of Chapter 3 of the
Administrative Decisions Review Act 1997, the Tribunal may not order that a
decision referred to in subsection (1) be stayed pending the determination of
an application for its administrative review.
105R Publication of information about licence holders
(1) The Authority may from time to time publish any of the following information
about licence holders under this Act:
(a) information about the level of compliance by licence holders with the
requirements of and duties imposed under this Act and the regulations,
the Insurance Guidelines and the conditions of licences under this Act,
(b) information about the pricing by licence holders of premiums or charges
for building cover contracts,
(c) information about the profitability of the insurance or alternative
indemnity products operations of licence holders,
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(d) information that compares the performance of licence holders in
connection with claims under this Act (for example, by reference to
timeliness, outcomes, customer service or complaints),
(e) any other information about licence holders that the Authority considers
should be made public in the public interest.
(2) The form and type of information published under this section is required to
be approved by the Board of the Authority.
(3) Information published under this section can identify individual insurers or
providers.
(4) No liability (including liability in defamation) is incurred for publishing in
good faith information under this section or a fair report or summary of such
a publication.
(5) The Authority cannot publish information under this section that is protected
information within the meaning of section 121A unless it is satisfied that it is
necessary in the public interest to do so.
Division 2 Supervision of licence holders
105S Business plans of licence holders
(1) A licence holder must prepare and deliver to the Authority a business plan for
its insurance business under Part 6 or its alternative indemnity product
business for cover under Part 6B as soon as practicable after it is requested to
do so by the Authority.
(2) The licence holder must revise its business plan:
(a) whenever it departs significantly from its business plan, and
(b) at intervals of not less than 12 months as the Authority directs.
(3) The licence holder must, as far as practicable, conduct its insurance business
under Part 6 or its alternative indemnity product business for cover under
Part 6B in accordance with its current business plan, but if the holder departs
significantly from that plan the holder must notify the Authority accordingly.
(4) A business plan must be prepared in accordance with the Insurance
Guidelines.
(5) A business plan must describe the manner in which the licence holder's
business for insurance under Part 6 or its alternative indemnity product
business for cover under Part 6B is to be conducted (including claims
handling, management, expenses and systems).
(6) It is a condition of a licence granted under this Act that a licence holder must
comply with this section.
105T Re-insurance arrangements of licensed insurers
(1) It is a condition of a licence as a licensed insurer granted under this Act that
the insurer must notify the Authority of:
(a) particulars of arrangements made or proposed to be made for
re-insurance in respect of liabilities under contracts of insurance entered
into under Part 6 by the licensed insurer, and
(b) the terms of any approval of the Australian Prudential Regulation
Authority under the Insurance Act 1973 of the Commonwealth in
respect of any such re-insurance.
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(2) This section does not apply to the Self Insurance Corporation.
105U Investment of funds of licence holder
(1) A licence holder, if required to do so by the Authority, must provide the
Authority with details of the way in which its funds relating to insurance under
Part 6 or cover under Part 6B and other funds are invested.
(2) It is a condition of the licence of a licence holder that the holder comply with
subsection (1).
(3) The funds of a licensed insurer relating to insurance under Part 6 are the funds
of the insurer derived from the payment of insurance premiums for insurance
under that Part and from their investment.
(4) The funds of a licensed provider relating to cover under Part 6B are the funds
of the provider derived from the payment of premiums or charges for the cover
and from their investment.
105V Accounts, returns and other records of licence holder
(1) A licence holder must keep any accounting and other records in relation to the
business or financial position of the holder:
(a) that are prescribed by the regulations, and
(b) subject to the regulations, that it is directed by the Authority to keep by
notice served on the holder.
(2) The regulations may prescribe the manner in which financial transactions are
to be accounted for in any such records.
(3) A licence holder must lodge with the Authority returns in relation to the
business or financial position of the holder in the form, containing the
particulars and accompanied by any documents:
(a) that may be prescribed by the regulations, and
(b) subject to the regulations, that may be directed by the Authority by
notice served on the holder.
(4) Returns must be lodged:
(a) subject to paragraph (b), within 6 weeks after each 31 March, 30 June,
30 September and 31 December, or
(b) at any other times as the Authority, by notice served on the licence
holder, directs.
(5) The regulations may require returns, and documents accompanying returns, to
be certified by an auditor or by an actuary.
(6) A licence holder who contravenes any requirement imposed on the holder by
or under this section is guilty of an offence.
Maximum penalty: 500 penalty units.
(7) The Authority may make publicly available a copy of any return, and any
documents accompanying a return, under this section.
(8) In this section and section 105W:
accounting records includes invoices, receipts, orders for the payment of
money, bills of exchange, cheques, promissory notes, vouchers and other
documents of prime entry, and also includes any working papers and other
documents that are necessary to explain the methods and calculations by
which accounts are made up.
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105W Audit of accounting and other records and performance audit
(1) The Authority may appoint an appropriately qualified person to audit or
inspect, and report to the Authority on, the accounting and other records
relating to the business or financial position of a licence holder, including
accounting and other records relating to:
(a) the manner in which its funds are invested, or
(b) compliance with this Act and the regulations (including any Insurance
Guidelines).
(2) A person so appointed is (if directed to do so by the Authority) to report to the
Authority on whether the licence holder is carrying out its business for
insurance contracts entered into under Part 6 or cover provided under Part 6B
effectively, economically and efficiently.
(3) A person so appointed is, for the purpose of exercising any functions under this
section, entitled to inspect the accounting and other records of the licence
holder.
(4) A licence holder must provide all reasonable assistance to enable the exercise
of those functions.
(5) A person must not intentionally obstruct or delay a person exercising a
function under this section.
(6) A person exercising functions under this section has qualified privilege in
proceedings for defamation in respect of any statement that the person makes
orally or in writing in the course of the exercise of those functions.
(7) A licence holder or another person who contravenes any requirement imposed
on the holder or other person by or under this section is guilty of an offence.
Maximum penalty: 500 penalty units.
(8) The Authority may from time to time carry out an audit to determine the
profitability of a licence holder and for that purpose may exercise the functions
of a person appointed under subsection (1). The Authority is to report on any
such audit to the Board of the Authority and to the Minister, on a confidential
basis.
105X Information and documents to be supplied to Authority by licence holders and
former holders
(1) In this section:
documents includes returns and accounts furnished under the Corporations
Law, the Corporations Act 2001 of the Commonwealth and the Insurance Act
1973 of the Commonwealth.
licence holder includes a former licence holder.
(2) The Authority may require a licence holder:
(a) to disclose to the Authority specified information relating to the
business and financial position of the holder or of any corporation
which is a related body corporate (within the meaning of the
Corporations Act 2001 of the Commonwealth) or of any fund managed
by the holder, or
(b) to forward to the Authority, or make available for inspection, specified
documents, or copies of or extracts from specified documents, kept by
the licence holder or by any corporation which is such a related body
corporate.
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(3) Subsection (2) extends to requiring:
(a) financial information that is or may be relevant to the consideration by
the Authority of premiums filed by the licence holder under this Act,
and
(b) information about claims dealt with by the licence holder and the
handling of claims, including the cost of claims handling incurred by the
holder and the settlement of claims by the holder, and
(c) information about building cover contracts entered into by the licence
holder, and
(d) information required for the purposes of the register maintained by the
Authority under section 102A, and
(e) information about other matters concerning the licence holder.
This subsection does not affect the generality of subsection (2) or any other
provision of this Act regarding the obtaining of information by the Authority
and does not limit any other manner in which the Authority may obtain
information.
(4) A licence holder must forward to the Authority details of a claim under a
building cover contract within the period specified for the purposes of this
section by the Authority. A holder must forward any additional information
reasonably required by the Authority for the purposes of the register kept
under section 102A.
(5) A requirement under this section:
(a) must be made in writing and served on the licence holder, and
(b) must specify the manner in which and the time within which the
requirement is to be complied with.
(6) The manner in which a requirement is to be complied with may include the
supply to the Authority of a certificate by a registered tax agent, a registered
company auditor (within the meaning of the Corporations Act 2001 of the
Commonwealth) or an actuary approved by the Authority as to the correctness
of any specified information or specified documents (or copies of or extracts
from specified documents).
(7) Unless the licence holder satisfies the court that it is not within its power to
comply with the requirement, a holder that fails to comply with a requirement
under this section is guilty of an offence.
Maximum penalty: 1,000 penalty units.
105Y Reports about licence holders
(1) The Authority may from time to time forward to the Minister reports relating
to:
(a) the level of compliance by licence holders with:
(i) any requirements of this Act, and
(ii) any conditions of licences under this Act (including any relevant
Insurance Guidelines), and
(b) complaints made about licence holders, and any other matters relating
to insurers or providers, in connection with any matters to which this
Act relates.
(2) A report may relate to licence holders generally, or to any class of holders, or
to any particular holders.
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(3) A report may identify particular licence holders.
(4) A report may include such observations and recommendations as the
Authority thinks fit.
(5) The Minister may make a report public and may lay a report or cause it to be
laid before both or either of the Houses of Parliament.
(6) Nothing in this section affects reports that may be made apart from this
section.
105Z Power of Supreme Court to deal with licence holders unable to meet liabilities
(1) The Supreme Court may, on the application of the Authority, make such
orders as the Supreme Court considers necessary or desirable for the purpose
of protecting the interests of the persons covered under building cover
contracts entered into by a licence holder or a former licence holder.
(2) The Supreme Court may make such an order if it is satisfied that the licence
holder or former licence holder:
(a) is not able to meet the licence holder's liabilities under the contracts or
may not be able to do so, or
(b) has acted or may act in a manner that is prejudicial to the interests of the
persons covered under the contracts.
(3) Without limiting the generality of subsection (1), the Supreme Court may
make the following orders:
(a) an order regulating the administration and payment of claims under the
contracts,
(b) an order prohibiting or regulating the transfer or disposal of, or other
dealing in, the assets of the licence holder or former licence holder,
(c) an order requiring the licence holder or former licence holder to
discharge its liabilities under the contracts out of its assets and the assets
of any related body corporate (within the meaning of the Corporations
Act 2001 of the Commonwealth),
(d) an order appointing a receiver or receiver and manager, having such
powers as the Supreme Court orders, of the property or part of the
property of the licence holder or former licence holder or of any such
related body corporate.
(4) If an application is made to the Supreme Court for an order under
subsection (1), the Supreme Court may, if in its opinion it is desirable to do so,
before considering the application, grant an interim order, being an order of
the kind applied for that is expressed to have effect pending the determination
of the application.
(5) If an application is made to the Supreme Court for an order under
subsection (1), the Supreme Court is not to require the Authority, as a
condition of granting an interim order, to give any undertaking as to damages.
(6) The Authority is to give the Australian Prudential Regulation Authority and
the Australian Securities and Investments Commission notice of its intention
to apply for an order under this section.
(7) The Australian Prudential Regulation Authority and the Australian Securities
and Investments Commission each has a right to appear and be heard in
proceedings for an order under this section.
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(8) If the Supreme Court has made an order under this section, the Supreme Court
may, on application by the Authority or by any person affected by the order,
make a further order rescinding or varying the first mentioned order.
(9) A person who contravenes, whether by act or omission, an order made by the
Supreme Court under this section that is applicable to the person is guilty of
an offence.
Maximum penalty: 100 penalty units or imprisonment for 6 months, or both.
(10) The Supreme Court is not to exercise its powers under this section in respect
of a corporation that is in the course of being wound up.
(11) The powers of the Supreme Court under this section are in addition to any
other powers of the Supreme Court.
105ZA Notification to Authority of certain defaults in relation to licence holders
(1) A licence holder and a former licence holder must notify the Authority in
writing of the occurrence of any of the following events or things referred to
in the following provisions within 21 days after the event or thing happens
(whether within or outside the State):
(a) section 105L (3) (paragraphs (a), (e), (j) and (m) excepted),
(b) section 105L (4) (paragraphs (a), (c) and (k) excepted).
(2) A licence holder must notify the Authority in writing of:
(a) a decrease or proposed decrease in the issued capital of the licence
holder within 21 days after the decrease or proposal to effect the
decrease, and
(b) the receipt by the licence holder of any bidder's statement or target's
statement within the meaning of the Corporations Act 2001 of the
Commonwealth.
Maximum penalty: 100 penalty units.
105ZB Proceedings for failure to comply with licence
No proceedings may be taken against a licence holder for failure to comply
with the terms of the holder's licence or this Act or the regulations, except by
the Authority.
[62] Part 7, heading
Omit the heading. Insert instead:
Part 7 Additional functions of Secretary
[63] Sections 105, 107-113 and 125
Omit the sections.
[64] Section 121A Secrecy of information obtained from or relating to insurers or
proposed insurers
Insert "or Authority" after "Minister" wherever occurring in section 121A (2) (a)
and (4) (a).
[65] Section 121A (2) (c) and (4) (b)
Insert "or provider of an alternative indemnity product" after "insurer" wherever occurring.
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[66] Section 121A (2) (d)
Insert at the end of section 121A (2) (c):
, or
(d) to the Minister or the Authority.
[67] Section 121A (6A)
Insert after section 121A (6):
(6A) This section does not apply to the publishing of protected information in
accordance with section 105R or a report in accordance with section 105Y.
[68] Section 121A (7), definition of "protected information"
Omit "obtained from an insurer under (or in connection with the administration or
execution of) Part 6".
Insert instead "or provider of an alternative indemnity product obtained from an insurer or
provider under (or in connection with the administration or execution of) Part 6, 6A, 6B
or 6C".
[69] Section 121B Information sharing
Omit section 121B (1) and (2). Insert instead:
(1) A person engaged in the administration of this Act may disclose information
obtained in the course of the administration or execution of this Act to the
following persons or bodies, if the disclosure is for the purpose of assisting
those persons or bodies to exercise functions under this Act:
(a) the Authority or a member of staff of the Authority,
(b) the Self Insurance Corporation or a licence holder under Part 6C or a
member of staff of the Corporation or a licence holder,
(c) a government sector agency prescribed by the regulations for the
purposes of this section or a member of staff of the agency.
(2) A person or body to which information may be disclosed under subsection (1)
may disclose to a person engaged in the administration of this Act information
obtained in connection with the exercise of functions of the person or body
under this Act, if the disclosure is for the purpose of assisting in the
administration or execution of this Act.
(2A) The Authority may disclose information obtained in the course of the
administration or execution of this Act to a government sector agency
prescribed by the regulations for the purposes of this section or a member of
staff of the agency, if the disclosure is for the purpose of assisting in the
administration or execution of any other Act.
[70] Section 121B (3A)
Insert after section 121B (3):
(3A) To avoid doubt, information that is personal information (within the meaning
of the Privacy and Personal Information Protection Act 1998) or health
information (within the meaning of the Health Records and Information
Privacy Act 2002) may be disclosed for the purposes of subsection (1) or (2).
[71] Section 121B (4)
Omit "(Specific functions in relation to home warranty insurance)".
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[72] Section 121C
Insert after section 121B:
121C Data required to be supplied to Authority by licence holders
(1) The Authority may require a licence holder to disclose to the Authority (within
the time and manner specified by the Authority) data relating to building cover
contracts, claims and other related matters under this Act.
(2) Subsection (1) extends to requiring:
(a) data relating to any aspect of the insurance scheme (including any
alternative arrangements under Part 6B) under this Act, and
(b) data relating to building cover contracts or claims generally or to
particular building cover contracts or claims.
This subsection does not affect the generality of subsection (1) or any other
provision of this Act regarding the obtaining of data by the Authority.
(3) A licence holder may be required to disclose data to the Authority under this
section that is personal information or health information about an individual
despite anything to the contrary in the Privacy and Personal Information
Protection Act 1998 or the Health Records and Information Privacy Act 2002.
(4) Unless the licence holder under Part 6C satisfies the court that it is not within
its power to comply with a requirement under this section, a licence holder that
fails to comply with a requirement under this section is guilty of an offence.
Maximum penalty: 100 penalty units.
(5) Nothing in this section prevents data that may be required to be disclosed
under this section from being disclosed under any other provision of this Act
under which the Authority may require the disclosure of information.
Note. Data provided under this section is information that may be disclosed by the
Authority under section 121B.
(6) In this section, licence holder means a licence holder under Part 6C and
includes a former licence holder (including any insurance broker or
commission agent engaged in home building insurance business).
[73] Section 123A
Insert after section 123:
123A Service of documents on Authority or claims administrator
(1) A document may be served on the Authority or a claims administrator for the
purposes of this Act or the regulations by any of the following methods:
(a) by post to the address specified by the Authority or claims administrator
for the service of documents of that kind,
(b) by post to an office of the Authority or claims administrator by leaving
it at any such office with a person apparently over the age of 16 years,
(c) by email to an email address specified by the Authority or claims
administrator for the service of documents of that kind,
(d) by any other method authorised by the regulations for the service of
documents of that kind.
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(2) Nothing in this section affects the operation of any provision of a law or of the
rules of a court authorising a document to be served on the Authority or a
claims administrator by any other method.
(3) In this section, serve includes give or send.
[74] Section 124 Order for substituted service
Insert ", Authority or a claims administrator" after "Secretary" in section 124 (1).
[75] Section 126 Power of entry
Insert "or Authority's" after "Secretary's" in section 126 (1).
[76] Section 126 (1)
Insert "or Authority" after "Secretary".
[77] Section 127 Power to obtain information
Insert at the end of paragraph (b) of the definition of authorised person in section 127 (1):
, or
(c) a person authorised in writing by the Authority for the purposes of this
section and holding a certificate issued by the Authority as to that
authority.
[78] Section 127 (1), definition of "relevant information"
Insert at the end of paragraph (e):
, or
(f) an application for a licence under Part 6C, or
(g) an investigation by the Authority into a matter that is or may be the
subject of action against an insurer or provider of an alternative
indemnity product under this Act or a licence under Part 6C.
[79] Section 127 (2)
Insert "or Authority" after "Secretary".
[80] Section 127A Power to request name and address of persons undertaking residential
building work or specialist work
Insert at the end of paragraph (b) of the definition of authorised person in section 127A (6):
, or
(c) a person authorised in writing by the Authority for the purposes of this
section and holding a certificate issued by the Authority as to that
authority.
[81] Section 131 Certificate of evidence
Insert at the end of the section:
(2) A certificate purporting to be signed by an employee of the Authority
prescribed by the regulations and certifying:
(a) that residential building work, was or was not, on a day or during a
period specified in the certificate, the subject of a contract of insurance
entered into under Part 6 or cover provided under Part 6B, or
(b) that a person was, or was not, on a day or during a period specified in
the certificate, the holder of a licence under Part 6C, or
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(c) that conditions set out in the certificate were the conditions of a
specified licence under Part 6C on a day or during a period specified in
the certificate, or
(d) that a licence under Part 6C identified in the certificate was, or was not,
suspended, surrendered or cancelled on a day, or suspended for a period,
specified in the certificate, or
(e) that a notice required to be given to or by, or served on or by, the
Authority or a claims administrator by or under this Act or the
regulations was or was not given or served on a day or during a period
specified in the certificate,
is admissible in evidence in any proceedings and is prima facie evidence of the
matters stated in it.
[82] Section 137 Offence by body corporate--general liability of directors etc
Omit "Division 3" from section 137 (1A). Insert instead "Division 4".
[83] Section 138A Penalty notices
Insert "or Authority" after "Secretary" wherever occurring.
[84] Schedule 1 Definitions and other interpretative provisions
Omit the definitions of Administration Corporation and insurance under the Home
Building Compensation Fund from clause 1 (1).
[85] Schedule 1, clause 1 (1)
Insert in alphabetical order:
alternative indemnity product--see section 104.
Authority means the State Insurance Regulatory Authority.
building cover contract means:
(a) a contract of insurance under Part 6, or
(b) a contract or arrangement for the provision of cover by means of an
alternative indemnity product.
claims administrator--see section 103F (1).
construction period insurance contract--see section 99 (4).
data means any facts, statistics, instructions, concepts or other information in
a form that is capable of being communicated, analysed or processed (whether
by an individual or by a computer or other automated means).
Home Building Insurers Guarantee Fund means the Home Building Insurers
Guarantee Fund established under Part 6A.
Home Building Operational Fund means the Home Building Operational
Fund established under Part 6.
Insurance Guidelines means Insurance Guidelines issued by the Authority
under this Act and in force.
licensed insurer means an insurer that is the holder of a licence that is in force
under Part 6C and includes the Self Insurance Corporation.
licensed provider means a provider of an alternative indemnity product that is
the holder of a licence that is in force under Part 6C.
provider of an alternative indemnity product--see section 104.
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[86] Schedule 4 Savings and transitional provisions
Insert at the end of the Schedule, with appropriate Part and clause numbering:
Part Provisions consequent on enactment of Home
Building Amendment (Compensation Reform) Act
2017
Definitions
In this Part:
amending Act means the Home Building Amendment (Compensation Reform)
Act 2017.
assets means any legal or equitable estate or interest (whether present or
future, whether vested or contingent and whether personal or assignable) in
real or personal property of any description (including money), and includes
securities, choses in action and documents.
dissolution day for FTAC means the day on which section 107 is repealed by
the amending Act.
FTAC means the Fair Trading Administration Corporation constituted by
section 107, as in force immediately before its repeal by the amending Act.
instrument means an instrument (other than this Act or an instrument made
under this Act) or any other document that creates, modifies or extinguishes
rights or liabilities (or would do so if lodged, filed or registered in accordance
with any law), and includes any judgment, order, process or other instrument
issued by a court or tribunal.
liabilities means any liabilities, debts or obligations (whether present or future,
whether vested or contingent and whether personal or assignable).
rights means any rights, powers, privileges or immunities (whether present or
future, whether vested or contingent and whether personal or assignable).
Register to continue
(1) For the purposes of section 102A, as amended by the amending Act, the
particulars kept in the register maintained by the Self Insurance Corporation
immediately before that amendment are to form part of the register kept by the
Authority under that section.
(2) This clause does not prevent the Authority from correcting those particulars or
omitting those particulars from the register.
Changes to claim period
(1) Section 103BC, as amended by the amending Act, extends to contracts of
insurance in force on the commencement of that amendment.
(2) However, subclause (1) does not apply to any claims made in respect of any
such contract before that commencement.
Exemptions to continue
Section 103E, as in force before its substitution by the amending Act,
continues to have effect in relation to the following:
(a) residential building work commenced before that substitution,
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(b) residential building work the subject of a contract entered into before
that substitution,
(c) sales entered into before that substitution.
Closure of Building Insurers' Guarantee Fund to further claims
(1) A new claim may not be made by a beneficiary under Division 2 of Part 6A of
the Act in relation to a matter covered by a former approved insurer as such an
insurer.
(2) A claim is a new claim for the purposes of this clause if:
(a) the claim is made on or after the commencement of section 103OA (as
inserted by the amending Act), or
(b) the claim is a continuation, or a revival, of a claim made before that
commencement that had been previously finalised or withdrawn, or had
not been prosecuted by the claimant for a period of not less than
12 months.
(3) This clause does not affect any claim that is not a new claim.
(4) In this clause, former approved insurer has the same meaning as in Part 6A.
Dissolution of FTAC and closure of accounts
(1) FTAC is dissolved on the dissolution day.
(2) On the dissolution day for FTAC:
(a) the Home Building Trust Account, the Building Insurance Fund and the
Fair Trading Administration Corporation General Account are closed,
and
(b) any balance standing to the credit of those accounts is transferred to the
Crown.
(3) The annual report for the year ending 30 June 2017 may be included in the
annual report of the Department of Finance, Services and Innovation for that
year.
(4) Subject to the regulations, a reference in any other Act or instrument made
under any other Act or in any instrument of any kind to FTAC is (to the extent
that it relates to the assets, rights and liabilities transferred to the Crown) to be
read on and from the dissolution day as being a reference to the Crown.
(5) In this clause:
Building Insurance Fund means the Building Insurance Fund required to be
maintained under section 112A, as in force immediately before its repeal by
the amending Act.
Fair Trading Administration Corporation General Account and Home
Building Trust Account mean the accounts required to be maintained under
sections 113 and 112, respectively, as in force immediately before the repeal
of those sections by the amending Act.
Transfer of assets, rights and liabilities
(1) On the dissolution day, any assets, rights and liabilities of FTAC immediately
before its dissolution by this Part are transferred to the Crown.
(2) On and from the dissolution day, the following provisions have effect in
relation to the transfer:
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(a) the transferred assets vest in the transferee by virtue of this clause
without the need for any further conveyance, transfer, assignment or
assurance,
(b) the transferred rights and liabilities become, by virtue of this clause, the
rights and liabilities of the transferee,
(c) all proceedings relating to the transferred assets, rights or liabilities
commenced before the dissolution day by or against FTAC pending
immediately before the dissolution day are taken to be proceedings
pending by or against the Crown,
(d) any act, matter or thing done or omitted to be done in relation to the
transferred assets, rights or liabilities before the dissolution day by, to
or in respect of FTAC is (to the extent to which that act, matter or thing
has any force or effect) taken to have been done or omitted by, to or in
respect of the Crown,
(e) the Crown has all the entitlements and obligations of FTAC in relation
to the transferred assets, rights and liabilities that FTAC would have had
but for the dissolution of FTAC, whether or not those entitlements and
obligations were actual or potential at the time the dissolution took
effect.
(3) The operation of this clause and the clause dissolving FTAC is not to be
regarded as:
(a) a breach of contract, trust or confidence or otherwise as a civil wrong, or
(b) a breach of any contractual provision prohibiting, restricting or
regulating the assignment or transfer of assets, rights or liabilities, or
(c) giving rise to any remedy by a party to an instrument, or as causing or
permitting the termination of, or exercise of rights under, any
instrument, or
(d) an event of default under any contract or other instrument.
Page 40
Home Building Amendment (Compensation Reform) Bill 2017 [NSW]
Schedule 2 Amendment of other legislation
Schedule 2 Amendment of other legislation
2.1 Civil and Administrative Tribunal Act 2013 No 2
Schedule 4 Consumer and Commercial Division
Omit clause 5 (2) (b).
2.2 Government Information (Public Access) Regulation 2009
Schedule 3 Agencies declared to be part of other agencies
Omit the matter relating to the Fair Trading Administration Corporation.
2.3 NSW Self Insurance Corporation Act 2004 No 106
[1] Section 3 Definitions
Omit the definitions of insurance agency arrangement and insurance intermediary.
Insert in alphabetical order:
insurance agency or broker arrangement--see section 8A (4).
insurance intermediary means a person who enters into a contract, agreement
or other arrangement with an insurance agent in connection with the provision
of insurance under Part 6 of the Home Building Act 1989 by or on behalf of the
Self Insurance Corporation.
[2] Section 8A Specific functions in relation to insurance under Home Building Act 1989
Omit "the Home Building Compensation Fund" where firstly occurring in section 8A (1)
and wherever occurring in section 8A (2), (3), (4) and (8).
Insert instead "Part 6 of the Home Building Act 1989".
[3] Section 8A (1) (a)
Omit the paragraph. Insert instead:
(a) to carry on the business of providing insurance for building work done
in New South Wales that requires insurance under that Part,
[4] Section 8A (1) (c)
Omit "the Home Building Compensation Fund" where firstly occurring.
Insert instead "that Part".
[5] Section 8A (2), heading
Omit "Market practice and claims handling". Insert instead "Insurance".
[6] Section 8A (2)
Omit "applicable guidelines issued under section 91A of".
Insert instead "Insurance Guidelines issued under".
[7] Section 8A (2), note
Omit the note.
[8] Section 8A (4), heading
Omit "intermediaries". Insert instead "brokers".
Page 41
Home Building Amendment (Compensation Reform) Bill 2017 [NSW]
Schedule 2 Amendment of other legislation
[9] Section 8A (4)
Omit "insurance agency arrangements".
Insert instead "insurance agency or broker arrangements".
[10] Section 8A (4)
Insert "or insurance brokers" before "for the Corporation".
[11] Section 8A (5) and (6)
Insert "or insurance broker" after "insurance agent" wherever occurring.
[12] Sections 8A (5)
Omit "insurance agency arrangement" wherever occurring.
Insert instead "insurance agency or broker arrangement".
[13] Section 8A (6)
Insert "or broker's" after "agent's".
[14] Sections 8A (7) and 13 (1A) (f)
Omit "insurance agency arrangements" wherever occurring.
Insert instead "insurance agency or broker arrangements".
[15] Section 8B Competition authorisations
Omit the section.
[16] Sections 12A (2) and (3) (a) and 13 (1A) (f)
Omit "the Home Building Compensation Fund" wherever occurring.
Insert instead "Part 6 of the Home Building Act 1989".
[17] Section 12A (2A)
Omit the subsection.
[18] Section 12A (3) (b)
Omit "insurance under the Home Building Compensation Fund business".
Insert instead "insurance business under that Act".
[19] Section 13 Regulations
Insert ", insurance brokers" after "insurance agents" where firstly occurring in
section 13 (1A) (a), (b) and (c) and wherever occurring in section 13 (1A) (d) and (f).
[20] Section 13 (1A) (a), (b) and (c)
Insert ", former brokers" after "former insurance agents" wherever occurring.
[21] Section 13 (1A) (a)
Insert ", brokers" after "such agents".
[22] Section 13 (1A) (a)
Insert ", former brokers" after "former agents".
Page 42
Home Building Amendment (Compensation Reform) Bill 2017 [NSW]
Schedule 2 Amendment of other legislation
[23] Section 13 (1A) (d)
Insert ", brokers" after "capacities as agents".
2.4 Public Authorities (Financial Arrangements) Regulation 2013
Schedule 2 Authorities having Part 2 investment powers
Omit "Fair Trading Administration Corporation".
2.5 Public Finance and Audit Act 1983 No 152
Schedule 2 Statutory bodies
Omit "Fair Trading Administration Corporation".
2.6 State Insurance and Care Governance Act 2015 No 19
[1] Sections 18 (3), 23 and 24
Insert "and the Home Building Act 1989" after "legislation" wherever occurring.
[2] Section 24 Functions of SIRA
Insert after section 24 (2):
(3) In this section, a reference to an insurer under the Home Building Act 1989
includes a reference to the provider of an alternative indemnity product under
that Act.
2.7 Strata Schemes Management Act 2015 No 50
[1] Section 191 Building work to which Part applies
Omit "the Home Building Compensation Fund" from section 191 (3).
Insert instead "Part 6 of the Home Building Act 1989".
[2] Section 191 (5)
Omit the subsection.
Page 43
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