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Life Insurance Act 1995
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Administered by
Department of the Treasury
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C2015C00164 C46
25 March 2015
-
30 June 2015
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Part 1—Preliminary
1 Short title
2 Commencement
3 Objects of Act
4 Additional operation of Act
5 Exclusion of certain State insurance
6 Extension of Act to Norfolk Island
7 General administration of Act
7A Determination that certain provisions do not apply
7B Breach of condition of a determination under section 7A
8 Dictionary
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Part 2—Explanation of key concepts
9 Life policy
9A Continuous disability policy
10 Issue and ownership of policies
11 Life insurance business
12 Classes of life insurance business
12A Declarations that insurance or annuity business is life insurance business
12B Declarations that other financial business is life insurance business
13 Business of a statutory fund
14 Investment account benefits, investment linked benefits
15 Participating, non participating benefits
16 Related bodies corporate
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Part 2A—Special provisions relating to life companies that are friendly societies
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Division 1—Preliminary
16A Overview
16B Definitions
Division 2—Friendly societies and how this Act applies to them
16C What is a friendly society?
16D Act applies to friendly societies in accordance with this Part
16E Restriction on use of expression friendly society
Division 3—Modified operation of key concepts
16F Issue, ownership etc. of policies
Division 4—Modified operation of provisions relating to statutory funds
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Subdivision 1—Modifications
16G Act generally applies as if references to a statutory fund were references to an approved benefit fund
16H Modification of section 34
16I Modification of section 38
16J Modification of section 43
16K Modification of section 45
Subdivision 2—Approved benefit fund rules
16L Approval of benefit fund rules
16N When benefit fund rules approved by APRA come into force
16O Benefit fund rules approved by APRA and in force form part of company’s constitution
16P Amendment of approved benefit fund rules not effective unless approved by APRA
16Q Amendment of approved benefit fund rules on initiative of friendly society
16R Amendment of approved benefit fund rules as required by APRA
16T When amendment of benefit fund rules approved or determined by APRA come into force
16U Approval of consequential amendments of company’s constitution
16V Consequential amendments of constitution as required by APRA
16X When consequential amendments approved or determined by APRA come into force
16Y Consequential amendments approved by APRA and in force take effect as amendments of company’s constitution
16Z Contractual effect of approved benefit fund rules and policies
Division 5—Other modifications
16ZA Assignment of an interest in a benefit fund that is, because of section 16F, taken to be a policy
16ZB Certain friendly societies may continue to carry on health insurance business—modified operation of this Act
16ZC Other modifications
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Part 2B—Special provisions relating to Australian branches of foreign life insurance companies
16ZD Eligible foreign life insurance company
16ZE Act does not apply to foreign life insurance business of eligible foreign life insurance company
16ZF Compliance Committee of eligible foreign life insurance company
16ZG Address for service of eligible foreign life insurance companies
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Part 3—Registration of life companies and their NOHCs
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Division 1—Registration of life companies
17 When registration is required
18 Certain activities not regarded as carrying on life business
19 Certain persons taken to carry on life business etc.
20 Application for registration
21 Decision on application for registration
22 Conditions of registration
26 Cancellation of registration: defunct company
27 Voluntary deregistration
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Division 2—Registration of NOHCs of life companies
28A Registration as a NOHC
28B Conditions on a NOHC registration
28C When APRA may revoke a NOHC registration
28D When APRA must revoke a NOHC registration
28E Continuation of body corporate’s NOHC registration
28 Continuation of effect of company’s registration
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Part 4—Statutory funds of life companies
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Division 1—General requirements
29 What is a statutory fund?
30 Outline of requirements regarding statutory funds
31 Requirement that company have statutory funds
32 Duty of company in relation to statutory funds
33 Notice to APRA when fund established
34 Assets of statutory fund
35 Identification of policies referable to statutory fund
36 Payments to statutory fund
37 Capital payments to statutory funds
38 Expenditure and application of statutory fund
39 Prohibition of reinsurance between funds
40 Mortgages etc. of assets
41 Effect of non compliance with section 38general
41A Effect of non compliance with section 38certain classes of transactions
42 Investment performance guarantee—limit of certain liabilities
43 Investment of statutory funds
45 Transfer of assets between funds
46 Restriction on restructure or termination of statutory funds
47 Ascertainment of income and outgoings of a statutory fund
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Division 2—Duties and liabilities of directors etc.
48 Duty of directors in relation to statutory funds
49 APRA may give notice
50 Liability of directors
51 APRA’s power to sue in the name of a company
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Division 3—Restructure and termination of statutory funds
52 Restructure of statutory funds
53 Termination of statutory funds
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Division 4—Additional requirements for transfer of policies between statutory funds by endorsement
55 Additional requirements for transfer of policies between statutory funds by endorsement
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Division 5—Allocation of profits and losses and capital payments
56 Interpretation
57 Obligation to allocate operating profit or loss
58 Operating profit etc.
59 Allocation of operating profit etc.
60 Basis of allocation of operating profit etc.
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Division 6—Distribution of retained profits and shareholders’ capital
61 Interpretation
62 Distribution of retained profits
63 Distribution of shareholders’ capital
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Part 6—Financial management of life companies etc.
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Division 1—Preliminary
74 Interpretation
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Division 2—Financial records and statements
75 Financial records—Australian and Australian/overseas funds
76 Financial records—overseas funds
76A Keeping records
77 Financial year of a life company
78 Treatment of income and outgoings relating to mixed business
79 Treatment of income or outgoings relating to 2 or more categories of business etc.
80 Basis of apportionment
81 Treatment of appreciation and depreciation of assets
83 Requirement for life company to have an auditor
83A Additional auditors
83B Compliance with prudential standards
84 Appointment of auditor
85 Ending an appointment as auditor
86 Life company must enable auditors
87 Notification of appointment etc. of auditor
88 Obligations of auditors of certain bodies to report to bodies and APRA
88A Auditor may give information to APRA
88B Duty of auditor to give information when required
89 Qualified privilege of auditors
90 Auditor must notify APRA of attempts to unduly influence etc. the auditor
91 Giving auditor false or misleading information
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Division 3—Appointed actuaries
93 Appointment
94 Ending an appointment as actuary
95 Notification of appointment etc.
96 Compliance with prudential standards
97 Role of actuary
98 Actuary’s obligation to report to APRA
98A Appointed actuary may give information to APRA
98B Duty of appointed actuary to give information when required
99 Qualified privilege of appointed actuary
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Division 8—Miscellaneous
114 Method of valuing policy liabilities
124 Policy owner’s right to copy of reporting documents
125 Referring matters to professional associations for auditors and actuaries
125A APRA may direct removal of auditor or actuary
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Part 7—Monitoring and investigation of life companies and registered NOHCs
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Division 1—Preliminary
126 Interpretation
127 Appointment of authorised persons
128 Associated body corporate
129 Related bodies corporate
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Division 2—Monitoring life companies and registered NOHCs
130 Purpose of Division
131 Requirement to give information to Regulator
132 Requirement to produce records
132A Requirement to notify APRA of certain matters
133 Access to premises
133A Enforceable undertakings
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Division 3—Investigation by APRA
135 Giving of show cause notice
136 Grounds for giving of show cause notice
137 Decision to investigate
138 Investigation of associated body corporate
139 Investigation procedure
140 Access to premises for purposes of investigation
141 Requirement to produce records
142 Regulator’s power to require assistance
143 Application for warrant to seize records not produced
144 Grant of warrant
145 Powers if records produced or seized
146 Powers if records not produced
147 Offences related to investigations
149 Regulator must give body corporate written summary of conclusions
151 Identity cards
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Division 3A—Life companies required to comply with determinations of the Superannuation Complaints Tribunal
151A Life companies must comply with determinations of the Superannuation Complaints Tribunal
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Division 4—Special provisions relating to the execution of warrants
152 Interpretation
153 Use of equipment to examine or process things
154 Use of electronic equipment at premises
155 Compensation for damage to electronic equipment
156 Copies of seized things to be provided
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Division 5—Protections in relation to information
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Subdivision A—Protection for whistleblowers
156A Disclosures qualifying for whistleblower protection
156B Whistleblower protection for disclosures that qualify
156C Victimisation of whistleblowers prohibited
156D Right to compensation
156E Confidentiality requirement for body and its officers, employees and auditors
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Subdivision B—Self incrimination
156F Self incrimination
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Part 8—Judicial management, other external administration and winding up
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Division 1—Judicial management
157 Application for order for judicial management
158 Order for judicial management after investigation
159 Order for judicial management on other grounds
160 Commencement of judicial management
161 Stay of proceedings during judicial management
162 No judicial management except in accordance with this Act
163 Appointment of judicial manager
164 Remuneration of judicial manager
165 Management vests in judicial manager
165A Effect on external administrator of judicial manager managing company
165B Judicial manager being in control not ground for denying obligation
166 Continued application of other Parts of Act
167 Court’s control of judicial manager
168 Powers of judicial manager
168A Judicial manager’s additional powers to facilitate recapitalisation
168B Considering report before acting under section 168A
168C Act under section 168A not ground for denying obligation
169 Application by APRA for instructions to judicial manager
170 Request by APRA for information
171 Duration of judicial management
172 Cancellation of judicial management
173 Judicial manager must conduct management efficiently and economically
174 Disclaimer of onerous property
175 Report by judicial manager
176 Order of Court on report of judicial manager
177 Transfer of business to another company
178 Resignation
179 Indemnity
179A Exceptions to Part IV of the Competition and Consumer Act 2010
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Division 1A—Other external administration
179B Relationship of this Division with Chapter 5 of the Corporations Act 2001
179C Involving APRA in applications to appoint external administrators of life companies
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Division 2—Winding up
180 Winding up of life companies
181 Order on application by APRA
182 Operation of Corporations Act
183 Notification to APRA regarding applications by liquidator
183A Application by liquidator for directions—voluntary winding up of friendly society
184 Application by APRA for directions
185 APRA’s power to ask for information
186 Determination of amounts to be treated as liabilities of life company
187 Application of statutory fund assets
188 Liability of directors for loss to statutory fund
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Part 9—Transfers and amalgamations of life insurance business
189 Interpretation
190 Transfer or amalgamation of life insurance business
191 Steps to be taken before application for confirmation
192 Actuarial report on scheme
193 Application to Court
194 Confirmation of scheme
195 Effect of confirmation etc.
196 Costs of actuary’s report
197 Documents to be lodged in case of transfer or amalgamation
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Part 10—Provisions relating to policies
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Division 1—Issue of policies
198 Alteration of proposal and policy forms
199 Capacity of young persons to insure etc.
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Division 2—Assignments and mortgages
200 Assignment of policy
201 Mortgages and trusts
202 Effect of notice of trust etc.
203 Transfer of policy after change of trustee
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Division 2A—Restriction on assignment or commutation of payments under structured settlements and structured orders
203A Definitions
203B Application of Division to tax exempt annuities and lump sums
203C Assignments or commutations of tax exempt annuities are generally not effective
203D Assignments or commutations of tax exempt lump sums are not effective
203E Relationship with Division 2
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Division 3—Protection of policies
204 Protection of interest of insured
205 Protection of policy money on person’s death
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Division 4—Surrender values, paid up policies and non forfeiture of policies
206 Application of Division
207 Surrender of policies
208 Relaxation of company’s obligations to surrender
209 Paid up policies
210 Non forfeiture of policies in certain cases of non payment of premiums
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Division 5—Payment of policy money
211 Probate or administration not necessary in certain cases—a single policy
212 Probate or administration not necessary in certain cases—2 or more policies
213 Death of policy owner who is not the life insured
214 Company not bound to see to the application of money paid by it
215 Power to pay money into Court
216 Unclaimed money
217 No deduction in respect of other policies
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Division 6—Children’s advancement policies
218 Interpretation
219 Property in child’s advancement policy
220 Death or bankruptcy of policy owner
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Division 7—Lost or destroyed policy documents
221 Lost or destroyed policy—issue of replacement policy document
222 Form of replacement policy document
223 Notice before issuing replacement policy document
224 Claim under policy where policy document lost or destroyed
225 Application of sections 221, 222, 223 and 224 to replacement policy document
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Division 8—General
226 Registers
227 Registration of policies
228 Effect of suicide on policy
229 Condition as to war risk void
230 Policies not invalidated by contraventions of the Act
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Part 10A—Prudential standards and directions
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Division 1—Prudential standards
230A APRA may make prudential standards for life companies, registered NOHCs and subsidiaries
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Division 2—Directions
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Subdivision A—Recapitalisation directions
230AA Who this Subdivision applies to
230AB Recapitalisation direction by APRA
230AC Additional contents of a recapitalisation direction
230AD Compliance with a recapitalisation direction
230AE APRA must obtain expert’s report on the fair value of shares etc.
230AF Determination of the fair value of shares by an expert
230AG Determination of the fair value of rights by an expert
230AH Ascertaining the fair value of other capital instruments
230AI Contravention of certain provisions does not affect the validity of recapitalisation direction etc.
230AJ Recapitalisation direction not grounds for denial of obligations
230AK Supply of information about issue and revocation of recapitalisation directions
230AL Non compliance with a recapitalisation direction
230AM Exceptions to Part IV of the Competition and Consumer Act 2010
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Subdivision B—Other directions
230B APRA may give directions in certain circumstances
230C Direction not grounds for denial of obligations
230D Supply of information about issue and revocation of directions
230E Secrecy requirements
230F Non compliance with a direction
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Part 11—Miscellaneous
233 Operation of State and Territory laws
233A Transfer by life insurance company to statutory fund
234 Prohibition of mixed insurance business
235 Injunctions
236 Review of certain decisions
237 Constitution and procedure of Tribunal
240 Register of Life Companies and Non Operating Holding Companies
241 Inspection of Register etc.
242 Non shareholder members of life company—voting by post
245 Disqualified persons not to be directors, principal executive officers etc. of life companies
245A Court power of disqualification
245B Court power to revoke or vary a disqualification etc.
245C Privilege against exposure to penalty—disqualification under section 245A
246 Principal executive officer
247 Protection of person who discloses information etc. under compulsion
248 Offences
250 Conduct by directors, employees and agents
251 Compensation for acquisition of property
251A Authorising contracts etc. for protecting policy owners’ interests and financial system stability
251B Borrowing funds for payments under authorised contracts etc.
253 Regulations
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Part 12—How this Act affects existing life companies etc.
254 Companies registered under Life Insurance Act 1945
264 Saving provision: sections 83, 84 and 94 of the Life Insurance Act 1945
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Schedule—Dictionary
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Endnotes
Endnote 1—About the endnotes
Endnote 2—Abbreviation key
Endnote 3—Legislation history
Endnote 4—Amendment history
