House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Financial Services and Regulation, the Honourable J.B. Hockey, MP)

9 - Schedule 6 - Amendment of the Life Insurance Act 1995

Commencement

9.1 The Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 (No. 1 Act) transfers the prudential regulation of friendly societies to the Commonwealth regime. To enable continuity from the Friendly Societies Code in respect of the assignment of an interest in a benefit fund, the schedule 6 will commence on the same day as the No. 1 Act is due to come into operation.

Assignment of an Interest in a Friendly Society Benefit Fund

Item 1

9.2 This item proposes to extend the requirements already in section 16ZA of the LIA necessary for assigning an interest in a friendly society benefit fund. For friendly societies, this section applies in the place of subsection 200(2) of the LIA. Since the drafting of section 16ZA, a decision has been taken to replicate additional requirements for assignment from the Friendly Societies Code. These include a requirement that the assignment be by memorandum of transfer, signed by both the assignor and assignee, and registered by the friendly society. Together with the existing provisions, the proposed new requirements in section 16ZA only apply to friendly societies.

9.3 Given the continued application of the majority of section 200 (excluding subsection 200(2)) to friendly societies, the terminology in section 16ZA has been altered to ensure consistency with the rest of the LIA Act. Specifically, it is proposed that transferor and transferee replace assignor and assignee respectively in all paragraphs in section 16ZA.