Explanatory Memorandum
(Circulated by authority of the Treasurer, the Honourable Peter Costello MP)14 Schedule 10: Amendment of the Insurance (Agents and Brokers) Act 1984
The purpose of Schedule 10 is to transfer regulatory responsibility for the Insurance (Agents and Brokers) Act 1984 (the Act) to ASIC. The Act regulates insurance intermediaries, in part by requiring that insurance brokers and foreign insurance agents are registered under the Act. All of the functions and powers under the Act were formerly performed and exercised by the ISC.
Commencement
14.1 Parts 1 - 3 of Schedule 10 (comprising items 1-64) will commence on the commencement of the proposed Australian Prudential Regulation Authority Act 1998.
14.2 In the event that items 47, 52, 60 and 66 of Schedule 1 to the proposed Insurance Laws Amendment Act 1998 commence before the proposed Australian Prudential Regulation Authority Act commences, Part 4 of Schedule 10 (comprising items 61 64) comes into effect at the time of the commencement of the proposed Australian Prudential Regulation Authority Act.
14.3 In the event that items 47, 52, 60 and 66 of Schedule 1 to the proposed Insurance Laws Amendment Act commence after or at the same time as the proposed Australian Prudential Regulation Authority Act, Part 4 of Schedule 10 comes into effect immediately after the commencement of those items in the proposed Insurance Laws Amendment Act.
Change of name of regulator
Items 1, 3 - 10, 12, 13, 16 - 60
14.4 Until the commencement of the proposed Financial Sector Reform (Amendments and Transitional Provisions) Act (the FSR Act), the Insurance and Superannuation Commissioner is responsible for supervising all aspects of compliance with the Act. On commencement of the proposed FSR Act, the Insurance and Superannuation Commissioner Act 1987 will be repealed and the office of Insurance and Superannuation Commissioner will no longer exist. Item 1 inserts a definition of 'ASIC' into s9 of the Act. Item 3 repeals the definition of 'Commissioner', which is no longer required under the Act.
14.5 Schedule 10 therefore amends references in the Act to the Insurance and Superannuation Commissioner by replacing them with references to ASIC.
14.6 The items which insert references to ASIC in place of references to the Insurance and Superannuation Commissioner are: 8 - 10 and 16 60.
14.7 Because the Act no longer refers to regulation conducted by a natural person (the Insurance and Superannuation Commissioner), but rather to the acts of an agency (ASIC), the Act no longer uses the expressions 'he or she', 'his or her' or 'him or her' when referring to the Commissioner. Amendments of the Act to refer to 'it' or to 'ASIC' are in items 4; 5; 8; and 13.
14.8 Similarly, because ASIC is not a natural person, references to documents in writing signed by the Insurance and Superannuation Commissioner are amended to refer to documents prepared 'in writing'. Items 6 10 and 12 make this change.
Co-operation between regulators
14.9 To assist ASIC and APRA to co-operate, a new section 47 empowers ASIC to appoint a member of the staff of ASIC or APRA to carry out the functions of an 'authorised person' under the Act. It is expected that the two regulators will enter a memorandum of understanding which will refer to such provisions and other matters. The relevant items are items 2 and 15.
Repeal of provisions
14.10 Some of the provisions in the Act deal with general administrative matters which are more appropriately dealt with in the specific ASIC Act. For example, the ASIC Act includes comprehensive provisions dealing with the delegation of powers by ASIC. For this reason, it is no longer necessary to include in the Act a separate power to delegate functions. Therefore, the delegation power in s47 of the Act is repealed.
14.11 Similarly, ASIC's annual reporting responsibility is dealt with in the Commonwealth Authorities and Companies Act 1997 and the ASIC Act. It is therefore no longer necessary to retain s45 of the Act.
14.12 The secrecy provision in the Act (s34U) deals with the manner in which the ISC was required to treat information gathered by it under the Act in the course of conducting its functions. This provision is broadly consistent with the secrecy provisions administered by the ISC under other legislation for which it had responsibility, eg the Superannuation Industry (Supervision) Act 1993 and the Life Insurance Act 1995. However, it is different from the secrecy regime under which the ASC operated in relation to its corporate law functions.
14.13 Section 127 of the ASIC Act, which previously related only to corporate regulatory functions, will be extended to cover ASIC's new functions under the Act, so that ASIC will be able to perform all of its functions under the same secrecy regime. Therefore, section 34U is repealed.
14.14 The items which repeal superfluous powers and functions in the Act are: 11; 14 and 15.
Schedule 10, Part 4: Amendments to take account of the Insurance Laws Amendment Act 1998
14.15 The purpose of Part 4 of Schedule 10 is to amend the Act as amended by the proposed Insurance Laws Amendment Act 1998 to reflect the change of regulatory responsibility under the proposed FSR Act. References to the Insurance and Superannuation Commissioner in provisions amended by Schedule 1 to the proposed Insurance Laws Amendment Act 1998 are repealed and references to ASIC substituted. Items 61 64 of Part 4 make this change.