Insurance Laws Amendment Act 1994 (Cth)

Insurance Laws Amendment Act 1994 No. 48 of 1994 TABLE OF PROVISIONS PART 1—PRELIMINARY Section 1. Short title 2. Commencement PART 2—AMENDMENTS OF THE INSURANCE ACT 1973 3. Principal Act 4. Valuation of assets 5. Inquiry by Commissioner and directions relating to certain assets 6. Principal banker 7. Application of amendments—section 33 of the Principal Act 8. Application of amendment—section 51 of the Principal Act 9. Transitional—phasing-in of asset valuation requirements TABLE OF PROVISIONS—continued Section PART 3—AMENDMENTS OF THE INSURANCE (AGENTS AND BROKERS) ACT 1984 10. Principal Act 11. Definitions 12. Insertion of new sections: 9B. Meaning of acceptable contracts of professional indemnity insurance 9C. Approved form 13. Insurance intermediaries other than brokers to operate under written agreements 14. Liability for conduct of agents and employees 15. Brokers not to carry on business unless registered 16. Applications for registration 17. Registration of brokers 18. Suspension or cancellation of registration 19. Annual return 20. Insertion of new section: 25C. Accounting records to be kept by registered brokers 21. Insurance broking accounts 22. Debts of brokers in relation to premiums etc. 23. Foreign insurance agents not to carry on business unless registered 24. Registration of foreign insurance agents 25. Suspension or cancellation of registration 26. Annual return 27. Insertion of new section: 33A. Insurance intermediaries to notify insurers of multiple agency arrangements 28. Insertion of new sections: 34A. Commissioner may direct an insurance intermediary to provide information 34B. Production of documents 34C. Identity cards 34D. Offence powers—entry and search of premises with occupier's consent 34E. Offence-related warrants 34F. Announcement before entry under warrant 34G. Details of warrant to be given to occupier etc. 34H. Continuance of warrants in certain circumstances 34J. Use of expert assistance in executing warrants 34K. Warrants may be granted by telephone etc. 34L. Discovery of evidence 34M. Compensation for damage to electronic equipment 34N. Copies of seized things to be provided 34P. Power to require persons to provide information etc. 34Q. Consent 34R. Persons to assist authorised officers 34S. Offence for making false statements in applications for warrants 34T. Offences relating to telephone warrants 34U. Secrecy 29. Certain money to be trust money 30. Insertion of new section: 37A. Commissioner may grant exemptions from certain requirements under section 37 31. Broker to notify insured of association with insurer 32. Insertion of new sections: 41A. Decision-making principles 41B. Insurance intermediaries taken to be associated because of prior conduct of personnel TABLE OF PROVISIONS—continued Section 33. Insertion of new section: 46A. Time for bringing proceedings 34. Further amendments of the Principal Act 35. Application of amendments—section 21 of the Principal Act 36. Transitional—applications for registration and renewal of registration 37. Transitional 38. Transitional—trust money 39. Application PART 4—AMENDMENT OF THE INSURANCE LAWS AMENDMENT ACT 1991 40. Principal Act 41. Phasing-in of capital and solvency requirements SCHEDULE FURTHER AMENDMENTS OF THE INSURANCE (AGENTS AND BROKERS) ACT 1984 Insurance Laws Amendment Act 1994 No. 48 of 1994 An Act to amend the Insurance Act 1973 and the Insurance (Agents and Brokers) Act 1984, and for related purposes [Assented to 7 April 1994] The Parliament of Australia enacts: PART 1—PRELIMINARY Short title 1. This Act may be cited as the Insurance Laws Amendment Act 1994. Commencement 2.(1) Sections 1, 2, 3, 10 and 40 commence on the day on which this Act receives the Royal Assent. (2) Section 41 is taken to have commenced on 6 January 1992. (3) The remaining provisions of this Act commence on such day as is, or such days as are, fixed by Proclamation. (4) If a provision of this Act referred to in subsection (3) does not commence within 6 months after the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period. PART 2—AMENDMENTS OF THE INSURANCE ACT 1973 Principal Act 3. In this Part, "Principal Act" means the Insurance Act 19731. Assets 3A. Section 30 of the Principal Act is amended by omitting subparagraphs (7)(a)(i) and (ii) and substituting the following subparagraphs: "(i) the number of those units or the aggregate of the number of those units and the number of units issued by the trust to a body corporate related to the first-mentioned body corporate exceeds 25% of the total number of units issued by the trust; or (ii) the value of those units or the aggregate of the value of those units and the value of units issued by the trust to bodies corporate related to the first-mentioned body corporate exceeds 25% of the total value of units issued by the trust; or". Valuation of assets 4. Section 33 of the Principal Act is amended: (a) by omitting paragraph (a) of component B of the formula appearing in subsection (6A) and substituting the following paragraph: "(a) if the share-issuing body is incorporated in Australia: (i) $2,000,000; or (ii) 20% of its premium income during its last preceding financial year; or (iii) 15% of its outstanding claims provision as at the end of its last preceding financial year; whichever is the greatest; or"; (b) by omitting paragraph (b) of component B of the formula appearing in subsection (6A) and substituting the following paragraph: "(b) if the share-issuing body is not incorporated in Australia: (i) $2,000,000; or (ii) 20% of its premium income in Australia during its last preceding financial year; or (iii) 15% of its outstanding claims provision as at the end of its last preceding financial year; whichever is the greatest; and". Inquiry by Commissioner and directions relating to certain assets 5. Section 51 of the Principal Act is amended by omitting paragraph (1)(b) and substituting the following paragraph: "(b) by notice in writing served on the body corporate direct: (i) that it not dispose of, or otherwise deal with or remove from Australia, any asset of the body corporate; or (ii) that it not dispose of, or otherwise deal with or remove from Australia, any asset of the body corporate that is, or that is of a kind that is, specified in the notice; or (iii) that it deal with any asset of the body corporate, or any asset of the body corporate that is, or that is of a kind that is, specified in the notice, on such terms and conditions as are specified in the notice; during such period after service of the notice, not exceeding 6 months, as is specified in the notice.". Principal banker 6. Section 119 of the Principal Act is amended by omitting subsection (3). Application of amendments—section 33 of the Principal Act 7. The amendments made by section 4 apply to a valuation of the assets of a body corporate at any time during: (a) the third of the first 3 financial years of the body corporate commencing after 6 January 1992; or (b) any subsequent financial year of the body corporate. Application of amendment—section 51 of the Principal Act 8. The amendment made by section 5 does not affect any direction in force under section 51 of the Principal Act immediately before this section commences. Transitional—phasing-in of asset valuation requirements 9.(1) In this section: "amended Act" means the Principal Act as amended by this Act; "insurance company" means a body corporate authorised under the Insurance Act 1973 to carry on insurance business; "interim year", in relation to an insurance company, means the third of the first 3 financial years of the insurance company commencing after 6 January 1992. (2) Section 33 of the amended Act applies to an insurance company in relation to the interim year of that insurance company as if: (a) a reference in that section to $2,000,000 were a reference to $1,500,000; and (b) a reference in that section to 15% were a reference to 12.5%. PART 3—AMENDMENTS OF THE INSURANCE (AGENTS AND BROKERS) ACT 1984 Principal Act 10. In this Part, "Principal Act" means the Insurance (Agents and Brokers) Act 19842. Definitions 11. Section 9 of the Principal Act is amended: (a) by omitting "provisional" (twice occurring) from the definition of "binder" and substituting "interim"; (b) by inserting the following definitions: " 'agency agreement', in relation to an insurer, means a written agreement of the kind referred to in section 10 that authorises a person to arrange contracts of insurance as agent for the insurer; 'agent', in relation to an insurer, means a person in relation to whom an agency agreement is in force with the insurer; 'approved form' means a form approved under section 9C; 'authorised officer', when used in a particular provision of this Act, means a person authorised by the Commissioner to exercise powers or perform functions under that provision; 'class of insurance business' means: (a) life insurance; or (b) a class of insurance business prescribed for the purposes of subsection 42(2) of the Insurance Act 1973.". Insertion of new sections 12. After section 9A of the Principal Act the following sections are inserted in Part 1: Meaning of acceptable contracts of professional indemnity insurance "9B.(1) An acceptable contract of professional indemnity insurance, in relation to liabilities that are prescribed for the purposes of a nominated provision, means a contract of insurance: (a) that is accepted by the Commissioner; and (b) that contains a clause indicating that the parties to the contract intend that any claim under the contract will be determined according to the law of a State or Territory specified in the contract; and (c) under which the insured is indemnified to the extent required by the regulations in respect of the prescribed liabilities arising out of or in the course of the insured's business as an insurance intermediary. "(2) Regulations specifying the extent to which a person is to be indemnified under an acceptable contract of professional indemnity insurance may make provision for different amounts according to the date on which the contract is entered into or renewed. "(3) Despite section 28 of the Insurance Contracts Act 1984: (a) a failure to comply with a duty of disclosure by a person seeking to enter into an acceptable contract of professional indemnity insurance; or (b) a misrepresentation by such a person to an insurer before such a contract was entered into; whether that failure or misrepresentation was fraudulent or not, is not a ground for the insurer to avoid the contract or to reduce its liability under the contract. "(4) An acceptable contract of professional indemnity insurance in respect of liabilities that are prescribed for the purposes of a nominated provision must provide that, despite the fact: (a) that the person entering into the contract subsequently ceases to trade as an insurance intermediary; or (b) that the contract is cancelled under subsection (5); that person, or any other person who becomes responsible for the liabilities of that person, is to continue to be indemnified in relation to a claim: (c) that is made in respect of a contract of insurance entered into by the insurance intermediary; and (d) that gives rise to such a prescribed liability; if that claim is made within the period after entry into that last-mentioned contract of insurance that is, at the time of entry into that contract, prescribed by regulations made for the purposes of this subsection. "(5) The insurer under an acceptable contract of professional indemnity insurance must not cancel the contract unless, at least 3 business days before the date of intended cancellation of the contract, the Commissioner is notified in writing by the insurer or by the agent of the insurer: (a) of the insurer's intention to cancel the contract; and (b) of the date of the intended cancellation of the contract; and (c) of the reason for the intended cancellation of the contract. Penalty: 150 penalty units. "(6) For the purposes of subsection (5), the following days do not count as business days: (a) a Saturday or a Sunday; (b) a day that is a public holiday or a bank holiday; (i) in the Australian Capital Territory; and (ii) if the insured is a natural person—in the place of residence of the insured; and (iii) if the insured is a company—in the State or Territory in which the insured is incorporated; and (iv) if the insured is a partnership or a body corporate other than a company—in the principal place of business of the insured. "(7) A provision in a contract of professional indemnity insurance has no effect if it purports to permit the contract to be cancelled by a person (the 'premium funder') who has entered into a loan agreement with the insured for the provision of all or a part of the premium payable under the contract if the insured is unable or unwilling to comply with the terms of the loan agreement. "(8) In this section: 'nominated provision' means: (a) paragraph 19(1)(b); or (b) subparagraph 31B(1)(a)(ii) or (b)(ii). Approved form "9C.(1) In this Act, a reference to an approved form is a reference to a form that is approved, by written instrument, by the Commissioner. "(2) The instrument by which a form is approved under subsection (1) after this section commences is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.". Insurance intermediaries other than brokers to operate under written agreements 13. Section 10 of the Principal Act is amended by inserting after subsection (2) the following subsection: "(2A) An agreement referred to in this section must specify whether an insurance intermediary can appoint a person as his or her agent for the purposes of the agreement.". Liability for conduct of agents and employees 14. Section 11 of the Principal Act is amended: (a) by omitting subsection (1) and substituting the following subsections: "(1) This section applies to any conduct of an employee or agent of an insurer: (a) on which a person in the circumstances of the insured or intending insured could reasonably be expected to rely; and (b) on which the insured or intending insured in fact relied in good faith. "(1A) An insurer is responsible, as between the insurer and the insured or intending insured, for the conduct of an employee of the insurer in relation to any matter relating to insurance, whether or not the employee acted within the scope of his or her employment. "(1B) If a person is the agent of one insurer only, the insurer is responsible, as between the insurer and the insured or intending insured, for the conduct of the agent in relation to any matter relating to insurance, whether or not the agent acted within the scope of the authority granted by the insurer. "(1C) If: (a) a person who is the agent of more than one insurer is the agent of one insurer only in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to any matter relating to that class of insurance business; the insurer who granted the agency agreement in respect of that class of insurance business is responsible for the conduct, as between the insurer and the insured or intending insured, whether or not the agent has acted within the scope of the authority granted by the insurer. "(1D) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to any matter relating to that class of insurance; the insurers are jointly and severally responsible for the conduct, as between themselves and the insured or intending insured, if the agent has acted beyond the scope of the authority granted by any of the insurers. "(1E) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to a matter relating to that class; and (c) the person, in so engaging, has acted within the scope of the authority granted by one only of those insurers; that insurer is responsible for the conduct, as between the insurer referred to in paragraph (c) and the insured or intending insured. "(1F) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to a matter relating to that class; and (c) the person, in so engaging, has acted within the scope of the authority granted by some only of those insurers; the insurers referred to in paragraph (c) are jointly and severally responsible for the conduct, as between themselves and the insured or intending insured. "(1G) If: (a) a person is the agent of more than one insurer; and (b) the person engages in the conduct in relation to any matter relating to a class of insurance business in which the person is not the agent of any of those insurers; the insurers are jointly and severally liable for the conduct, as between themselves and the insured or intending insured, despite the fact that the agent acted outside the scope of the authority granted by any of the insurers. "(1H) If: (a) a person (the 'principal agent') is the agent of an insurer; and (b) the principal agent appoints a second person (the 'sub-agent') to act as agent of the principal agent; then, for the purpose of determining the ultimate responsibility of the insurer under this section, the actions of the sub-agent are to be taken to be the actions of the principal agent: (c) whether the agency agreement entered into between the principal agent and the insurer permitted or forbade the principal agent to appoint the sub-agent; and (d) whether or not the sub-agent acted within the scope of his or her authority. "(1J) If: (a) a person is the agent of at least one insurer in respect of life insurance business; and (b) the person is the agent of at least one other insurer in respect of another class of insurance business ('general insurance business'); the provisions of this section do not operate: (c) if the person engages in the conduct in relation to life insurance business—so as to make any insurer referred to in paragraph (b) responsible for the conduct; and (d) if the person engages in conduct in relation to general insurance business—so as to make any insurer referred to in paragraph (a) responsible for the conduct."; (b) by omitting from subsection (2) "subsection (1)" and substituting "subsection (1A), (1B), (1C), (1D), (1E), (1F), (1G) or (1H)"; (c) by omitting from subsection (3) "Neither subsection (1) nor (2) affects" and substituting "Subsections (1A), (1B), (1C), (1D), (1E), (1F), (1G), (1H) and (1J) and (2) do not affect"; (d) by omitting from subsection (4) "subsection (1)" and substituting "subsection (1A), (1B), (1C), (1D), (1E), (1F), (1G), (1H), (1J)". Brokers not to carry on business unless registered 15. Section 19 of the Principal Act is amended: (a) by omitting paragraph 19(1)(b) and substituting the following paragraph: "(b) if there are liabilities prescribed for the purposes of this paragraph—unless there is in force an acceptable contract of professional indemnity insurance within the meaning of section 9B."; (b) by omitting from subsection (3) "acceptable" and substituting "an acceptable contract of professional indemnity insurance". Applications for registration 16. Section 20 of the Principal Act is amended: (a) by omitting subsection (1) and substituting the following subsection: "(1) A person may apply to the Commissioner: (a) to be registered under this Part in respect of life insurance business or in respect of general insurance business; or (b) to renew the person's registration under this Part."; (b) by omitting from subsection (2) "prescribed form" and substituting "approved form"; (c) by omitting from subsection (2A) "regulations made for the purposes of subsection (2)" and substituting "an approved form made for the purposes of subsection (2)". Registration of brokers 17. Section 21 of the Principal Act is amended: (a) by omitting subsections (1) and (2) and substituting the following subsections: "(1) Subject to subsection (2), if a person who proposes to carry on business as an insurance broker applies under section 20 for registration under this Part, the Commissioner must register the applicant and give the applicant a certificate of registration if: (a) the Commissioner is satisfied that there is in force any contract of insurance, required under paragraph 19(1)(b); and (b) the applicant has produced to the Commissioner a copy of each foreign agency agreement (if any) that authorises the applicant to arrange contracts as agent for an insurer; and (c) the applicant has paid the prescribed fee. "(1A) Subject to subsection (2), if: (a) a person is registered under this Part; and (b) the person applies under section 20 to renew the registration; the Commissioner must renew the registration and give the applicant a certificate of renewal of registration if: (c) the Commissioner is satisfied that there is in force in respect of the applicant any contract of insurance required under paragraph 19(1)(b) ; and (d) the applicant has produced to the Commissioner a copy of each foreign agency agreement (if any) that authorises the applicant to arrange contracts as agent for an insurer; and (e) the applicant has produced, or produces, satisfactory audited accounts of the applicant's business as an insurance broker, in respect of the accounting period ending on, or not more than 12 months before, the day that the registration would end if it is not renewed; and (f) the applicant has paid the prescribed fee. Note: A person can carry on business as an insurance broker only if the person is registered under this Part (see sections 19, 21 and 24). "(2) If: (a) an applicant, or a director, employee or agent of an applicant has been convicted of an offence referred to in subsection 25(1); or (b) an applicant, or a director, employee or agent of an applicant, is bankrupt or insolvent; or (c) an applicant, or an associated insurance intermediary within the meaning of section 41B, has failed to discharge the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A; the Commissioner may refuse to register the applicant or renew the applicant's registration."; (b) by omitting from subsection (3) "under this section" and substituting "and the renewal of a person's registration each"; (c) by inserting after subsection (3) the following subsections: "(3A) Within 4 months after the end of each accounting period, a registered insurance broker must produce satisfactory audited accounts for that period to the Commissioner. Penalty: 30 penalty units. "(3B) If, before the end of the 4 month period referred to in subsection (3A), the Commissioner grants a registered insurance broker an extension of time to produce the accounts, the broker must produce the accounts within the extended period. Penalty: 30 penalty units."; (d) by omitting subsection (5) and substituting the following subsections: "(5) If the Commissioner: (a) registers an applicant; or (b) renews the registration of an applicant; or (c) refuses to renew the registration of an applicant; or (d) cancels the registration of an insurance broker under subsection (4); the Commissioner must publish notice of it in the Gazette. "(6) If: (a) a broker provides audited accounts to the Commissioner under this section; and (b) those accounts do not meet the requirement specified in paragraph (a), (b), (c), (d) or (e) of the definition of 'satisfactory audited accounts' in subsection (7); and (c) the broker, at the request of the Commissioner, gives the Commissioner a written explanation why the requirement has not been met; the Commissioner may renew the broker's registration if the Commissioner is satisfied, having regard to the explanation, that the failure of the accounts to meet that request is not attributable to the dishonesty, recklessness or financial mismanagement of the broker. "(7) In this section: 'satisfactory audited accounts', in relation to a broker, include, but are not limited to, the following: (a) accounts that are in an approved form; (b) accounts that are arithmetically correct; (c) accounts that show that the sum of: (i) the amount of an account maintained by the broker under subsection 26(1); and (ii) the amount of prescribed investments by the broker; and (iii) amounts due to the broker from insurance debtors; is equal to, or exceeds, all the broker's insurance liabilities; (d) accounts that indicate that the broker is able to meet the broker's financial obligations as they fall due; (e) accounts that contain such other information as is required by the approved form; (f) accounts that are audited by an approved auditor.". Suspension or cancellation of registration 18. Section 25 of the Principal Act is amended by inserting after subsection (1) the following subsections: "(1A) If: (a) a person registered under this Part, or a director, employee or agent of such a person, becomes bankrupt or insolvent; or (b) a person registered under this Part fails to discharge the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A; the Commissioner may: (c) suspend the registration of the person for such period as the Commissioner considers appropriate; or (d) cancel the registration of the person. "(1B) If: (a) the Commissioner renews the registration of a broker after having regard to the audited accounts provided for a particular accounting period; and (b) during the period of the continued registration audited accounts for the next accounting period are provided to the Commissioner; and (c) the Commissioner is satisfied that those accounts are such that a further application for the renewal of registration would be refused; the Commissioner may, despite the fact that the period of renewed registration has not ended: (d) suspend registration of the broker for such period as the Commissioner considers appropriate; or (e) cancel the registration of the broker.". Annual return 19. Section 25A of the Principal Act is amended: (a) by omitting paragraph (2)(a) and substituting the following paragraph: "(a) must be in an approved form;"; (b) by omitting from paragraphs (2)(b) and (c) "shall" and substituting "must"; (c) by omitting from paragraph (2)(c) "and"; (d) by omitting paragraph (2)(d) and substituting the following paragraphs: "(d) unless paragraph (e) applies—must be lodged within 4 months after the end of the accounting period to which it relates; and (e) if, before the end of the lodgment period referred to in paragraph (d), the Commissioner grants an extension of the lodgment period—must be lodged within the extended period.". Insertion of new section 20. After section 25B of the Principal Act the following section is inserted: Accounting records to be kept by registered brokers "25C.(1) A registered insurance broker must keep records that record and explain: (a) the transactions engaged in by the broker to carry on business as an insurance broker; and (b) the financial position of the broker. "(2) The records must be kept so that the broker's accounts can be properly prepared and audited. "(3) A broker must not, without reasonable excuse, contravene a requirement under this section. Penalty: 100 penalty units.". Insurance broking accounts 21. Section 26 of the Principal Act is amended: (a) by omitting from paragraph (1)(a) "arranged or effected or to be arranged or effected by the broker" and substituting "or proposed contract of insurance"; (b) by adding after subsection (1A) the following subsection: "(1B) If money referred to in subsection (1) is paid to a person who is the agent of a registered insurance broker, the money is taken to have been paid to the broker at the time when it is received by the agent, whether or not the agent acted within the scope of authority granted by the broker."; (c) by omitting from paragraph (3)(b) "arranged or effected by the broker"; (d) by omitting from subsection (4) "arranged or effected or to be arranged or effected by the broker". Debts of brokers in relation to premiums etc. 22. Section 27 of the Principal Act is amended by omitting subsection (9) and substituting the following subsections: "(9) If: (a) a registered insurance broker receives money from, or on behalf of, an insured or intending insured in connection with a contract of insurance or proposed contract of insurance; and (b) at the end of 30 days after the day on which the money was received, the risk, or a part of the risk, to which the contract or proposed contract relates has not been accepted; subsection (9A) or (9B) applies to the broker. "(9A) If the risk to which the contract or proposed contract relates has not been accepted, the broker must, within 7 days after the end of the 30 day period: (a) give notice in the approved form (if any) to the insured or intending insured that the risk has not been accepted; and (b) return the money to the insured or intending insured. "(9B) If a part of the risk to which the contract or proposed contract relates has not been accepted, the broker must, within 7 days after the end of the 30 day period: (a) give notice in the approved form (if any) to the insured or intending insured of the extent to which the risk has not been accepted; and (b) return that part of the money that relates to the part of the risk that has not been accepted to the insured or intending insured.". Foreign insurance agents not to carry on business unless registered 23. Section 31B of the Principal Act is amended: (a) by omitting subparagraph (1)(a)(ii) and substituting the following subparagraph: "(ii) if there are liabilities prescribed for the purposes of this subparagraph—there is in force an acceptable contract of professional indemnity insurance within the meaning of section 9B; or"; (b) by omitting subparagraph (1)(b)(ii) and substituting the following subparagraph: "(ii) if there are liabilities prescribed for the purposes of this subparagraph—there is in force an acceptable contract of professional indemnity insurance within the meaning of section 9B."; (c) by omitting from subsection (2) "acceptable" and substituting "an acceptable contract of professional indemnity insurance". Registration of foreign insurance agents 24. Section 31D of the Principal Act is amended: (a) by omitting subsection (2) and substituting the following subsection: "(2) If: (a) an applicant, or a director, employee or agent of an applicant has been convicted of an offence referred to in subsection 31H(1); or (b) an applicant, or a director, employee or agent of an applicant, is bankrupt or insolvent; or (c) an applicant, or an associated insurance intermediary within the meaning of section 41B, has failed to discharge the ordinary obligations of an insurance intermediary as set out in decision-making principles in force under section 41A; the Commissioner may refuse to register the applicant."; (b) by inserting after paragraph (5)(a