Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007 (154 of 2007)

Schedule 1   Streamlining prudential regulation

Part 1   Amendments commencing on Royal Assent

Insurance Act 1973

62   At the end of Part IIIA

Add:

Division 4 - Protections in relation to information

Subdivision A - Protection for whistleblowers

38A Disclosures qualifying for whistleblower protection

(1) This section applies to a disclosure of information made by a person (the discloser ) who is, in relation to a body corporate that is a general insurer, an authorised NOHC or a subsidiary of a general insurer or authorised NOHC, any of the following:

(a) an officer of the body corporate;

(b) an employee of the body corporate;

(c) a person who has a contract for the supply of services or goods to the body corporate;

(d) an employee of a person who has a contract for the supply of services or goods to the body corporate.

(2) The disclosure of information by the discloser qualifies for protection under this Subdivision if:

(a) the disclosure is made to any of the following:

(i) APRA;

(ii) the auditor, or a member of an audit team conducting an audit, of the body corporate or a related body corporate;

(iii) the actuary of the body corporate or a related body corporate;

(iv) a director or senior manager of the body corporate or a related body corporate;

(v) a person authorised by the body corporate to receive disclosures of the kind made; and

(b) the discloser informs the person to whom the disclosure is made of the discloser’s name before making the disclosure; and

(c) both:

(i) the information concerns misconduct, or an improper state of affairs or circumstances, in relation to the body corporate or a related body corporate; and

(ii) the discloser considers that the information may assist a person referred to in paragraph (a) to perform the person’s functions or duties in relation to the body corporate or a related body corporate; and

(d) the discloser makes the disclosure in good faith.

(3) For the purposes of this section, a body corporate is a related body corporate of another body corporate if:

(a) in the case of a general insurer - the other body corporate is the authorised NOHC of the general insurer or a subsidiary of the general insurer or authorised NOHC; or

(b) in the case of an authorised NOHC of a general insurer - the other body corporate is the general insurer or a subsidiary of the general insurer or authorised NOHC; or

(c) in the case of a subsidiary of a general insurer or authorised NOHC - the other body corporate is the general insurer, the authorised NOHC or another subsidiary of the general insurer or authorised NOHC.

(4) In this section, officer has the same meaning as it has in the Corporations Act 2001.

38B Whistleblower protection for disclosures that qualify

(1) If a person makes a disclosure that qualifies for protection under this Subdivision:

(a) the person is not subject to any civil or criminal liability for making the disclosure; and

(b) no contractual or other remedy may be enforced, and no contractual or other right may be exercised, against the person on the basis of the disclosure.

(2) Without limiting subsection (1):

(a) the person has qualified privilege in respect of the disclosure; and

(b) a contract to which the person is a party must not be terminated on the basis that the disclosure constitutes a breach of the contract.

(3) Without limiting paragraphs (1)(b) and (2)(b), if a court is satisfied that:

(a) a person (the employee ) is employed in a particular position under a contract of employment with another person (the employer ); and

(b) the employee makes a disclosure that qualifies for protection under this Subdivision; and

(c) the employer purports to terminate the contract of employment on the basis of the disclosure;

the court may order that the employee be reinstated in that position or a position at a comparable level.

(4) If an individual makes a disclosure of information that qualifies for protection under this Subdivision, the information is not admissible in evidence against the individual in criminal proceedings or in proceedings for the imposition of a penalty, other than proceedings in respect of the falsity of the information.

38C Victimisation of whistleblowers prohibited

Actually causing detriment to another person

(1) A person commits an offence if:

(a) the person engages in conduct; and

(b) the person’s conduct causes any detriment to another person; and

(c) the person intends that his or her conduct cause detriment to the other person; and

(d) the person engages in his or her conduct because the other person made a disclosure that qualifies for protection under this Subdivision.

Penalty: 25 penalty units or imprisonment for 6 months, or both.

Threatening to cause detriment to another person

(2) A person (the first person ) commits an offence if:

(a) the first person makes a threat to another person (the second person ) to cause any detriment to the second person or to a third person; and

(b) the first person:

(i) intends the second person to fear that the threat will be carried out; or

(ii) is reckless as to causing the second person to fear that the threat will be carried out; and

(c) the first person makes the threat because a person:

(i) made a disclosure that qualifies for protection under this Subdivision; or

(ii) may make a disclosure that would qualify for protection under this Subdivision.

Penalty: 25 penalty units or imprisonment for 6 months, or both.

Threats

(3) For the purposes of subsection (2), a threat may be:

(a) express or implied; or

(b) conditional or unconditional.

(4) In a prosecution for an offence under subsection (2), it is not necessary to prove that the person threatened actually feared that the threat would be carried out.

Definition

(5) In this section:

engage in conduct means:

(a) do an act; or

(b) omit to do an act.

38D Right to compensation

If:

(a) a person:

(i) commits an offence under subsection 38C(1) or (2); or

(ii) commits an offence under Part 2.4 of the Criminal Code in relation to subsection 38C(1) or (2); and

(b) another person suffers damage because of the conduct constituting the offence or because of the contravention;

the person is liable to compensate the other person for the damage.

38E Confidentiality requirement for company, company officers and employees and auditors

(1) A person (the offender ) commits an offence under this subsection if:

(a) a person (the discloser ) makes a disclosure of information that qualifies for protection under this Subdivision; and

(b) the disclosure is made to:

(i) the auditor, or a member of an audit team conducting an audit, of the body corporate or a related body corporate in within the meaning of subsection 38A(3); or

(ii) a director or senior manager of the body corporate or a related body corporate; or

(iii) a person authorised by the body corporate to receive disclosures of that kind; and

(c) the offender is:

(i) the auditor, or a member of an audit team conducting an audit, of the body corporate or a related body corporate; or

(ii) a director or senior manager of the body corporate or a related body corporate; or

(iii) a person authorised by the body corporate to receive disclosures of that kind; or

(iv) the body corporate or a related body corporate; or

(v) an officer or employee of the body corporate or a related body corporate; and

(d) the offender discloses any of the following information (the confidential information ):

(i) the information referred to in paragraph (a);

(ii) the identity of the discloser;

(iii) information that is likely to lead to the identification of the discloser; and

(e) the confidential information is information that the offender obtained directly or indirectly because of the disclosure referred to in paragraph (a); and

(f) either:

(i) the offender is the person to whom the disclosure referred to in paragraph (a) is made; or

(ii) the offender is a person to whom the confidential information is disclosed in contravention of this section and the offender knows that the disclosure of the confidential information to the offender was unlawful or made in breach of confidence; and

(g) the disclosure referred to in paragraph (d) is not authorised under subsection (2).

Penalty: 25 penalty units.

(2) The disclosure referred to in paragraph (1)(d) is authorised under this subsection if:

(a) it is made to APRA; or

(b) it is made to a member of the Australian Federal Police (within the meaning of the Australian Federal Police Act 1979); or

(c) it is made to someone else with the consent of the discloser.

(3) In this section, officer has the same meaning as it has in the Corporations Act 2001.

Subdivision B - Self-incrimination

38F Self-incrimination

(1) A person is not excused from complying with a requirement under this Act, the prudential standards or the Financial Sector (Collection of Data) Act 2001 to give information to APRA on the ground that doing so would tend to incriminate the person or make the person liable to a penalty.

(2) However, if the person is an individual, the information given by the individual in compliance with the requirement is not admissible in evidence against the individual in criminal proceedings or in proceedings for the imposition of a penalty, other than proceedings in respect of the falsity of the information, if:

(a) before giving the information, the individual claims that giving the information might tend to incriminate the individual or make the individual liable to a penalty; and

(b) giving the information might in fact tend to incriminate the individual or make the individual liable to a penalty.