Commonwealth: Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 (Cth)

Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 Act No. 25 of 2008 as amended This compilation was prepared on 4 March 2010 taking into account amendments up to Act No. 8 of 2010 The text of any of those amendments not in force on that date is appended in the Notes section The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section Prepared by the Office of Legislative Drafting and Publishing, Attorney‑General's Department, Canberra Contents 1 Short title [see Note 1] 2 Commencement 3 Schedule(s) Schedule 1—Court power of disqualification etc. Part 1—Amendments commencing on Royal Assent Banking Act 1959 Insurance Act 1973 Life Insurance Act 1995 Retirement Savings Accounts Act 1997 Superannuation Industry (Supervision) Act 1993 Part 2—Amendments contingent on the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 Insurance Act 1973 Schedule 2—Direction powers Banking Act 1959 Insurance Act 1973 Life Insurance Act 1995 Superannuation Industry (Supervision) Act 1993 Schedule 3—Removal of Ministerial consent Part 1—Amendments commencing on Royal Assent Insurance Act 1973 Life Insurance Act 1995 Superannuation Industry (Supervision) Act 1993 Part 2—Amendments contingent on the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 Division 1—Amendments if Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 commences first Insurance Act 1973 Division 2—Amendments if Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 has not yet commenced Insurance Act 1973 Division 3—Amendments once Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 commences Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 Insurance Act 1973 Schedule 4—Review of decisions Banking Act 1959 Financial Sector (Collection of Data) Act 2001 Insurance Act 1973 Life Insurance Act 1995 Superannuation Industry (Supervision) Act 1993 Notes An Act to amend the law relating to the financial sector, and for related purposes 1 Short title [see Note 1] This Act may be cited as the Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent. 26 May 2008 2. Schedule 1, Part 1 The day on which this Act receives the Royal Assent. 26 May 2008 3. Schedule 1, item 71 Immediately before the commencement of items 9A, 9B, 9D, 9E, 9F and 9G of Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007. 1 July 2008 However, the provision(s) do not commence at all if those items commence before the day on which this Act receives the Royal Assent. 4. Schedule 1, items 72 to 83 The later of: 1 July 2008 (paragraph (b) applies) (a) the start of the day on which this Act receives the Royal Assent; and (b) immediately after the commencement of Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007. However, the provision(s) do not commence at all if the event mentioned in paragraph (b) does not occur. 5. Schedule 2 The day on which this Act receives the Royal Assent. 26 May 2008 6. Schedule 3, Part 1 The day on which this Act receives the Royal Assent. 26 May 2008 7. Schedule 3, Part 2, Division 1 The day on which this Act receives the Royal Assent. Does not commence However, the provision(s) do not commence at all if items 8 and 13 to 33 of Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 have not commenced before that day. 8. Schedule 3, Part 2, Division 2 The day on which this Act receives the Royal Assent. 26 May 2008 However, the provision(s) do not commence at all if items 8 and 13 to 33 of Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 commence before that day. 9. Schedule 3, items 65 and 66 Immediately before the commencement of items 8 and 13 to 33 of Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007. 1 July 2008 However, the provision(s) do not commence at all if those items commence before the day on which this Act receives the Royal Assent. 10. Schedule 3, item 67 Immediately after the commencement of item 5 of Schedule 2 to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007. 1 July 2008 However, the provision(s) do not commence at all if that item commences before the day on which this Act receives the Royal Assent. 11. Schedule 4 The day on which this Act receives the Royal Assent. 26 May 2008 Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Court power of disqualification etc. Part 1—Amendments commencing on Royal Assent Banking Act 1959 1 At the end of subsection 17(2) Add: ; or (c) either: (i) for a person who is a disqualified person only because he or she was disqualified under section 21—is disqualified from being or acting as an auditor of the ADI; or (ii) otherwise—is a disqualified person. 2 Subsections 19(1) and (2) Repeal the subsections, substitute: (1) A person commits an offence if: (a) the person is a disqualified person; and (b) the person is or acts as one of the following: (i) a director or senior manager of an ADI (other than a foreign ADI); (ii) a senior manager of the Australian operations of a foreign ADI; (iii) a director or senior manager of an authorised NOHC; (iv) an auditor of an ADI or an authorised NOHC; and (c) for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires). Penalty: Imprisonment for 2 years. (2) A person commits an offence if: (a) the person is a disqualified person; and (b) the person is or acts as one of the following: (i) a director or senior manager of an ADI (other than a foreign ADI); (ii) a senior manager of the Australian operations of a foreign ADI; (iii) a director or senior manager of an authorised NOHC; (iv) an auditor of an ADI or an authorised NOHC; and (c) for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires). Penalty: 60 penalty units. 3 Subsections 19(4) and (5) Repeal the subsections, substitute: (4) A body corporate commits an offence if: (a) a person is a disqualified person; and (b) the person is or acts as one of the following: (i) if the body corporate is an ADI (other than a foreign ADI)—a director or senior manager of the body corporate; (ii) if the body corporate is a foreign ADI—a senior manager of the Australian operations of the body corporate; (iii) if the body corporate is an authorised NOHC—a director or senior manager of the body corporate; (iv) if the body corporate is an ADI or an authorised NOHC—an auditor of the body corporate; and (c) for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires); and (d) in any case—the body corporate allows the person to be or act as a director, senior manager or auditor (as the case requires). Penalty: 250 penalty units. (5) A body corporate commits an offence if: (a) a person is a disqualified person; and (b) the person is or acts as one of the following: (i) if the body corporate is an ADI (other than a foreign ADI)—a director or senior manager of the body corporate; (ii) if the body corporate is a foreign ADI—a senior manager of the Australian operations of the body corporate; (iii) if the body corporate is an authorised NOHC—a director or senior manager of the body corporate; (iv) if the body corporate is an ADI or an authorised NOHC—an auditor of the body corporate; and (c) for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires); and (d) in any case—the body corporate allows the person to be or act as a director, senior manager or auditor (as the case requires). Penalty: 60 penalty units. 4 Subsection 19(7) Repeal the subsection. 5 Paragraph 20(1)(f) Omit "APRA", substitute "the Federal Court of Australia". 6 Subsection 20(1) (note) Omit "APRA", substitute "The Federal Court of Australia". 7 Sections 21 and 22 Repeal the sections, substitute: 21 Court power of disqualification (1) On application by APRA, the Federal Court of Australia may, by order, disqualify a person from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that: (a) the person is not a fit and proper person to be or act as such a person; and (b) the disqualification is justified. (2) For the purposes of subsection (1), the Court may disqualify a person from being or acting as one or more of the following: (a) a director or senior manager of: (i) a particular ADI; or (ii) a class of ADIs; or (iii) any ADI; (other than a particular foreign ADI, a class of foreign ADIs or any foreign ADI); (b) a senior manager of the Australian operations of: (i) a particular foreign ADI; or (ii) a class of foreign ADIs; or (iii) any foreign ADI; (c) a director or senior manager of: (i) a particular authorised NOHC; or (ii) a class of authorised NOHCs; or (iii) any authorised NOHC; (d) an auditor of: (i) a particular ADI or a particular authorised NOHC; or (ii) a class of ADIs or a class of authorised NOHCs; or (iii) any ADI or any authorised NOHC. (3) In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account: (a) any matters specified in the regulations for the purposes of this paragraph; and (b) any criteria for fitness and propriety set out in the prudential standards; and (c) any other matters the Court considers relevant. (4) In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to: (a) if the application is for the person to be disqualified from being or acting as a director or senior manager—the person's conduct in relation to the management, business or property of any corporation; and (b) if the application is for the person to be disqualified from being or acting as an auditor—the person's conduct in relation to the functions or duties of the person as required under this Act and the prudential standards; and (c) in any case—any other matters the Court considers relevant. (5) As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification: (a) to be given: (i) if the person is, or is acting as, a person referred to in subparagraph (2)(a)(i)—to the ADI concerned; or (ii) if the person is, or is acting as, a person referred to in subparagraph (2)(b)(i)—to the foreign ADI concerned; or (iii) if the person is, or is acting as, a person referred to in subparagraph (2)(c)(i)—to the authorised NOHC concerned; or (iv) if the person is, or is acting as, a person referred to in subparagraph (2)(d)(i)—to the ADI or authorised NOHC concerned; and (b) to be published in the Gazette. 22 Court power to revoke or vary a disqualification etc. (1) A disqualified person, or APRA, may apply to the Federal Court of Australia for: (a) if the person is a disqualified person only because he or she was disqualified under section 21—a variation or a revocation of the order made under that section; or (b) otherwise—an order that the person is not a disqualified person. (2) If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 20, the person is not a disqualified person. (3) At least 21 days before commencing the proceedings, written notice of the application must be lodged: (a) if the disqualified person makes the application—by the person with APRA; or (b) if APRA makes the application—by APRA with the disqualified person. (4) An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court. 8 Paragraph 23(2)(a) Repeal the paragraph, substitute: (a) either: (i) for a person who is a disqualified person only because he or she was disqualified under section 21—is disqualified from being or acting as a director or senior manager of the ADI or NOHC; or (ii) otherwise—is a disqualified person; or 9 Application and transitional provisions Disqualifications (1) For the purposes of the Banking Act 1959, a disqualification by APRA that is in force under section 21 of that Act immediately before this item commences continues in force after this item commences. (2) For the purposes of the Banking Act 1959, a reference in column 1 of the table in the provision of the Banking Act 1959 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3. New references to court orders to include references to disqualifications by APRA Item Column 1 Column 2 Column 3 Reference Provision of the Banking Act Reference taken to be included 1 a person who was disqualified under section 21 section 19 and paragraph 22(1)(a) a person who was disqualified under section 21 under a disqualification that is continued in force under subitem (1) 2 a person disqualified under section 21 by the Federal Court of Australia paragraph 20(1)(f) a person disqualified under section 21 by APRA under a disqualification that is continued in force under subitem (1) 3 an order made under section 21 paragraph 22(1)(a) and subsection 22(2) a disqualification made under section 21 that is continued in force under subitem (1) (3) Section 21 of the Banking Act 1959 (as in force immediately after this item commences) applies in relation to any conduct engaged in by a person, whether before or after this item commences. Waivers of disqualifications (4) If: (a) a person applies to APRA for a determination under section 22 of the Banking Act 1959 that the person is not a disqualified person; and (b) APRA has not made a decision on the application at the time this item commences; the application is taken to be withdrawn at that time. Note: See subitem (7) for the treatment of a decision by APRA under section 22 of the Banking Act 1959 in respect of which review proceedings are on foot at commencement. (5) A determination under section 22 of the Banking Act 1959 that is in force immediately before this item commences continues in force after that time. However, APRA may not revoke the determination. (6) If: (a) a determination in relation to a person continues in force under subitem (5); and (b) after this item commences, an order is made under section 21 of the Banking Act 1959 (as in force at that time) that the person is disqualified from being or acting as a person referred to in subsection 21(2) of that Act; the determination ceases to be in force. Review proceedings on foot at commencement (7) The amendments to the Banking Act 1959 made by this Schedule do not affect: (a) any request, in relation to a decision made under section 21 or 22 of that Act, for a review that is pending under section 51B of that Act immediately before the commencement of this item; or (b) any proceeding, in relation to a decision under section 21 or 22 of that Act that has been confirmed or varied under subsection 51B(3) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or (c) any appeal to a court in relation to a proceeding referred to in paragraph (b). (8) If a disqualification by APRA under section 21, or a determination under section 22, of the Banking Act 1959 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (7), the disqualification or determination is, for the purposes of subitem (1) or (5) (as the case requires), taken to have been in force immediately before this item commences. Insurance Act 1973 10 Subsections 24(1) to (7) Repeal the subsections, substitute: (1) A person commits an offence if: (a) the person is a disqualified person; and (b) the person is or acts as one of the following: (i) a director or senior manager of a general insurer (other than a foreign general insurer); (ii) a senior manager, or agent in Australia for the purpose of section 118, of a foreign general insurer; (iii) a director or senior manager of an authorised NOHC; and (c) for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires). Penalty: Imprisonment for 2 years. (2) A person commits an offence if: (a) the person is a disqualified person; and (b) the person is or acts as one of the following: (i) a director or senior manager of a general insurer (other than a foreign general insurer); (ii) a senior manager, or agent in Australia for the purpose of section 118, of a foreign general insurer; (iii) a director or senior manager of an authorised NOHC; and (c) for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires). Penalty: 60 penalty units. (3) Subsection (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (4) A body corporate commits an offence if: (a) a person is a disqualified person; and (b) the person is or acts as one of the following: (i) if the body corporate is a general insurer (other than a foreign general insurer)—a director or senior manager of the insurer; (ii) if the body corporate is a foreign general insurer—a senior manager, or agent in Australia for the purpose of section 118, of the insurer; (iii) if the body corporate is an authorised NOHC—a director or senior manager of the NOHC; and (c) for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires); and (d) in any case—the body corporate allows the person to be or act as a director, senior manager or agent in Australia (as the case requires). Penalty: 250 penalty units. (5) A body corporate commits an offence if: (a) a person is a disqualified person; and (b) the person is or acts as one of the following: (i) if the body corporate is a general insurer (other than a foreign general insurer)—a director or senior manager of the insurer; (ii) if the body corporate is a foreign general insurer—a senior manager, or agent in Australia for the purpose of section 118, of the insurer; (iii) if the body corporate is an authorised NOHC—a director or senior manager of the NOHC; and (c) for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires); and (d) in any case—the body corporate allows the person to be or act as a director, senior manager or agent in Australia (as the case requires). Penalty: 60 penalty units. (6) Subsection (5) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. 11 Paragraph 25(1)(f) Omit "APRA", substitute "the Federal Court of Australia". 12 Subsection 25(1) (note) Omit "APRA", substitute "The Federal Court of Australia". 13 Sections 25A and 26 Repeal the sections, substitute: 25A Court power of disqualification (1) On application by APRA, the Federal Court of Australia may, by order, disqualify a person from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that: (a) the person is not a fit and proper person to be or act as such a person; and (b) the disqualification is justified. (2) For the purposes of subsection (1), the Court may disqualify a person from being or acting as one or more of the following: (a) a director or senior manager of: (i) a particular general insurer; or (ii) a class of general insurers; or (iii) any general insurer; (other than a particular foreign general insurer, a class of foreign general insurers or any foreign general insurer); (b) a senior manager, or agent in Australia for the purpose of section 118, of: (i) a particular foreign general insurer; or (ii) a class of foreign general insurers; or (iii) any foreign general insurer; (c) a director or senior manager of: (i) a particular authorised NOHC; or (ii) a class of authorised NOHCs; or (iii) any authorised NOHC. (3) In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account: (a) any matters specified in the regulations for the purposes of this paragraph; and (b) any criteria for fitness and propriety set out in the prudential standards; and (c) any other matters the Court considers relevant. (4) In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to: (a) the person's conduct in relation to the management, business or property of any corporation; and (b) any other matters the Court considers relevant. (5) As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification: (a) to be given: (i) if the person is, or is acting as, a person referred to in subparagraph (2)(a)(i)—to the general insurer concerned; or (ii) if the person is, or is acting as, a person referred to in subparagraph (2)(b)(i)—to the foreign general insurer concerned; or (iii) if the person is, or is acting as, a person referred to in paragraph (2)(c)(i)—to the authorised NOHC concerned; and (b) to be published in the Gazette. 26 Court power to revoke or vary a disqualification etc. (1) A disqualified person, or APRA, may apply to the Federal Court of Australia for: (a) if the person is a disqualified person only because he or she was disqualified under section 25A—a variation or a revocation of the order made under that section; or (b) otherwise—an order that the person is not a disqualified person. (2) If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 25, the person is not a disqualified person. (3) At least 21 days before commencing the proceedings, written notice of the application must be lodged: (a) if the disqualified person makes the application—by the person with APRA; or (b) if APRA makes the application—by APRA with the disqualified person. (4) An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court. 14 Paragraph 27(2)(a) Repeal the paragraph, substitute: (a) either: (i) for a person who is a disqualified person only because he or she was disqualified under section 25A—is disqualified from being or acting as a director or senior manager of the insurer or NOHC; or (ii) otherwise—is a disqualified person; or 15 Paragraph 39(3)(b) Omit "determination", substitute "order". 16 Paragraph 43(1)(c) Repeal the paragraph, substitute: (c) the person is disqualified under section 44 from holding the appointment; or 17 Sections 44 and 45 Repeal the sections, substitute: 43A Disqualified persons must not act as auditor or actuary of general insurer (1) A person commits an offence if: (a) the person is disqualified under section 44; and (b) the person is or acts as an auditor or actuary of a general insurer; and (c) the person is disqualified from being or acting as that auditor or actuary (as the case requires). Penalty: Imprisonment for 2 years. (2) A person commits an offence if: (a) the person is disqualified under section 44; and (b) the person is or acts as an auditor or actuary of a general insurer; and (c) the person is disqualified from being or acting as that auditor or actuary (as the case requires). Penalty: 60 penalty units. (3) Subsection (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (4) A body corporate commits an offence if: (a) a person is disqualified under section 44; and (b) the person is or acts as an actuary or auditor of the body corporate; and (c) the person is disqualified from being or acting as that actuary or auditor (as the case requires); and (d) the body corporate allows the person to be or act as an actuary or auditor (as the case requires). Penalty: 250 penalty units. (5) A body corporate commits an offence if: (a) a person is disqualified under section 44; and (b) the person is or acts as an actuary or auditor of the body corporate; and (c) the person is disqualified from being or acting as that actuary or auditor (as the case requires); and (d) the body corporate allows the person to be or act as an actuary or auditor (as the case requires). Penalty: 60 penalty units. (6) Subsection (5) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (7) A failure to comply with this section does not affect the validity of an appointment or transaction. Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. Note 2: If a body corporate is convicted of an offence against this section, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty above. 44 Court power of disqualification (1) On application by APRA, the Federal Court of Australia may, by order, disqualify a person from holding any appointment as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that: (a) any of the following applies: (i) the person has failed to perform adequately and properly the functions and duties of such an appointment under this Act or the prudential standards; (ii) the person otherwise does not meet one or more of the criteria for fitness and propriety set out in the prudential standards; (iii) the person does not meet the eligibility criteria for such an appointment as set out in the prudential standards; and (b) the disqualification is justified. (2) For the purposes of subsection (1), the Court may disqualify a person from being or acting as an auditor or actuary of: (a) a particular general insurer; or (b) a class of general insurers; or (c) any general insurer. (3) In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account: (a) any matters specified in the regulations for the purposes of this paragraph; and (b) any criteria for fitness and propriety set out in the prudential standards; and (c) any other matters the Court considers relevant. (4) In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to: (a) the person's conduct in relation to the functions or duties that the person is required to perform under this Act and the prudential standards; and (b) any other matters the Court considers relevant. (5) As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification: (a) if the person is, or is acting as, an auditor or actuary of a general insurer—to be given to the general insurer concerned; and (b) to be published in the Gazette. 45 Court power to revoke or vary a disqualification etc. (1) A person who is disqualified under section 44, or APRA, may apply to the Federal Court of Australia for a variation or a revocation of an order made under that section. (2) At least 21 days before commencing the proceedings, written notice of the application must be lodged: (a) if the person who is disqualified makes the application—by the person with APRA; or (b) if APRA makes the application—by APRA with the person who is disqualified. 18 After paragraph 48(1)(a) Insert: (aa) is disqualified under section 44 from being or acting as an auditor of the general insurer; or 19 After paragraph 48(2)(a) Insert: (aa) is disqualified under section 44 from being or acting as an actuary of the general insurer; or 20 Subsection 48(4) Repeal the subsection. 21 Application and transitional provisions (1) For the purposes of the Insurance Act 1973, a disqualification by APRA that is in force under section 25A or 44 of that Act immediately before this item commences continues in force after this item commences. (2) For the purposes of the Insurance Act 1973, a reference in column 1 of the table in the provision of the Insurance Act 1973 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3. New references to court orders to include references to disqualifications by APRA Item Column 1 Column 2 Column 3 Reference Provision of the Insurance Act Reference taken to be included 1 a person who was disqualified under section 25A section 24 and paragraph 26(1)(a) a person who was disqualified under section 25A under a disqualification that is continued in force under subitem (1) 2 a person disqualified under section 25A by the Federal Court of Australia paragraph 25(1)(f) a person disqualified under section 25A by APRA under a disqualification that is continued in force under subitem (1) 3 an order made under section 25A paragraph 26(1)(a) and subsection 26(2) a disqualification made under section 25A that is continued in force under subitem (1) 4 an order made under section 44 paragraph 40(2)(b) a disqualification made under section 44 that is continued in force under subitem (1) 5 a person disqualified under section 44 sections 43, 43A, 45 and 48 a person disqualified under section 44 under a disqualification that is continued in force under subitem (1) (3) Sections 25A and 44 of the Insurance Act 1973 (as in force immediately after this item commences) apply in relation to any conduct engaged in by a person, whether before or after this item commences. Waivers of disqualifications (4) If: (a) either: (i) a person applies to APRA for a determination under section 26 of the Insurance Act 1973 that the person is not a disqualified person; or (ii) a person applies to APRA under section 45 of the Insurance Act 1973 for the revocation of a determination under section 44 of that Act; and (b) APRA has not made a decision on the application at the time this item commences; the application is taken to be withdrawn at that time. Note: See subitem (7) for the treatment of a decision by APRA under section 26 or 45 of the Insurance Act 1973 in respect of which review proceedings are on foot at commencement. (5) A determination under section 26 of the Insurance Act 1973 that is in force immediately before this item commences continues in force after that time. However, APRA may not revoke the determination. (6) If: (a) a determination in relation to a person continues in force under subitem (5); and (b) after this item commences, an order is made under section 25A of the Insurance Act 1973 (as in force at that time) that the person is disqualified from being or acting as a person referred to in subsection 25A(2) of that Act; the determination ceases to be in force. Review proceedings on foot at commencement (7) The amendments to the Insurance Act 1973 made by this Schedule do not affect: (a) any request, in relation to a decision made under section 25A, 26, 44 or 45 of that Act, for a review that is pending under section 63 of that Act immediately before the commencement of this item; or (b) any proceeding, in relation to a decision under section 25A, 26, 44 or 45 of that Act that has been confirmed or varied under subsection 63(4) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or (c) any appeal to a court in relation to a proceeding referred to in paragraph (b). (8) If a disqualification by APRA under section 25A or 44, or a determination under section 26, of the Insurance Act 1973 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (7), the disqualification or determination is, for the purposes of subitem (1) or (5) (as the case requires), taken to have been in force immediately before this item commences. Life Insurance Act 1995 22 Paragraph 84(b) Repeal the paragraph, substitute: (b) no order is in force under section 245A that the person is disqualified from being or acting as an auditor of the life company. 23 Paragraph 85(1)(c) Repeal the paragraph, substitute: (c) an order takes effect under section 245A that the person is disqualified from being or acting as an auditor of the life company. 24 Section 86 Repeal the section. 25 Paragraph 93(3)(b) Repeal the paragraph, substitute: (b) no order is in force under section 245A that the person is disqualified from being or acting as an actuary of the life company. 26 Paragraph 94(1)(c) Repeal the paragraph, substitute: (c) an order takes effect under section 245A that the person is disqualified from being or acting as an actuary of the life company. 27 Section 94A Repeal the section. 28 At the end of Division 8 of Part 6 Add: 125A APRA may direct removal of auditor or actuary (1) APRA may, if satisfied there is a ground under subsection (2), give a written direction to a life company to end the appointment of a person as: (a) the auditor of the company; or (b) the appointed actuary of the company. (2) The grounds for giving a direction to end a person's appointment are: (a) either: (i) for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as an auditor or actuary of the company; or (ii) otherwise—the person is a disqualified person; or (b) the person is not a fit and proper person to hold the appointment; or (c) the person has failed to perform adequately and properly the duties or functions of the appointment under this Act, the regulations or the Financial Sector (Collection of Data) Act 2001. (3) Before directing a life company to end a person's appointment, APRA must: (a) give written notice to: (i) the life company; and (ii) the person; and (b) give the life company and the person a reasonable opportunity to make submissions on the matter. (4) The notice must include a statement that any submissions in response to the notice may be discussed by APRA with other persons as mentioned in paragraph (5)(b). (5) If a submission is made in response to the notice, APRA: (a) must have regard to the submission; and (b) may discuss any matter contained in the submission with any persons APRA considers appropriate for the purpose of assessing the truth of the matter. (6) A direction to end a person's appointment takes effect on the day specified in the direction, which must be at least 7 days after the direction is made. (7) If APRA directs a life company to end a person's appointment, APRA must give the life company and the person a copy of the direction. (8) A direction to end a person's appointment is not a legislative instrument. (9) A life company commits an offence if: (a) the life company does or fails to do an act; and (b) by doing or failing to do the act, the life company fails to comply with a direction under this section. Penalty: 60 penalty units. (10) Subsection (9) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. 29 Subsection 236(1) (after paragraph (w) of the definition of reviewable decision) Insert: (za) a decision to give a direction under section 125A; 30 Subsection 245(1) Omit "this section", substitute "this Act". 31 At the end of subsection 245(1) Add: ; or (d) the Federal Court of Australia has disqualified the person under section 245A. Note: The heading to section 245 is altered by omitting "Bankrupts and persons convicted of certain offences" and substituting "Disqualified persons". 32 Subsections 245(2) to (5) Repeal the subsections, substitute: (2) A person commits an offence if: (a) the person is a disqualified person; and (b) the person is or acts as: (i) a director of a company registered under this Act; or (ii) a principal executive officer of a company registered under this Act; or (iii) an appointed actuary of a company registered under this Act; or (iv) an auditor of a company registered under this Act; and (c) for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires). Penalty: Imprisonment for 2 years. (3) A person commits an offence if: (a) the person is a disqualified person; and (b) the person is or acts as: (i) a director of a company registered under this Act; or (ii) a principal executive officer of a company registered under this Act; or (iii) an appointed actuary of a company registered under this Act; or (iv) an auditor of a company registered under this Act; and (c) for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires). Penalty: 60 penalty units. (4) Subsection (3) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (5) A company commits an offence if: (a) the company is registered under this Act; and (b) a person is a disqualified person; and (c) the person is or acts as: (i) a director of the company; or (ii) a principal executive officer of the company; or (iii) an appointed actuary of the company; or (iv) an auditor of the company; and (d) for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires); and (e) in any case—the company allows the person to be or act as a director, principal executive officer, actuary or auditor (as the case requires). Penalty: 250 penalty units. (5A) A company commits an offence if: (a) the company is registered under this Act; and (b) a person is a disqualified person; and (c) the person is or acts as: (i) a director of the company; or (ii) a principal executive officer of the company; or (iii) an appointed actuary of the company; or (iv) an auditor of the company; and (d) for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires); and (e) in any case—the company allows the person to be or act as a director, principal executive officer, actuary or auditor (as the case requires). Penalty: 60 penalty units. (5B) Subsection (5A) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. 33 After section 245 Insert: 245A Court power of disqualification (1) On application by APRA, the Federal Court of Australia may, by order, disqualify a person from being or acting as someone referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that: (a) the person is not a fit and proper person to be or act as such a person; and (b) the disqualification is justified. (2) For the purposes of subsection (1), the Court may disqualify a person from being or acting as a director, principal executive officer, appointed actuary or auditor of: (a) a particular company registered under this Act; or (b) a class of companies registered under this Act; or (c) any company registered under this Act. (3) In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account: (a) any matters specified in the regulations for the purposes of this paragraph; and (b) any criteria for fitness and propriety specified in the prudential standards; and (c) any other matters the Court considers relevant. (4) In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to: (a) if the application is for the person to be disqualified from being or acting as a director or principal executive officer—the person's conduct in relation to the management, business or property of any corporation; and (b) if the application is for the person to be disqualified from being or acting as an appointed actuary or auditor—the person's conduct in relation to the functions or duties of an actuary or auditor under this Act; and (c) in any case—any other matters the Court considers relevant. (5) As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification: (a) if the person is, or is acting as, a director, principal executive officer, appointed actuary or auditor of a company registered under this Act—to be given to the company concerned; and (b) to be published in the Gazette. 245B Court power to revoke or vary a disqualification etc. (1) A disqualified person, or APRA, may apply to the Federal Court of Australia for: (a) if the person is a disqualified person only because he or she was disqualified under section 245A—a variation or a revocation of the order made under that section; or (b) otherwise—an order that the person is not a disqualified person. (2) If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 245, the person is not a disqualified person. (3) At least 21 days before commencing the proceedings, written notice of the application must be lodged: (a) if the disqualified person makes the application—by the person with APRA; or (b) if APRA makes the application—by APRA with the disqualified person. (4) An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court. 34 Application Section 245A of the Life Insurance Act 1995 (as inserted by this Act) applies in relation to any conduct engaged in by a person, whether before or after this item commences. Retirement Savings Accounts Act 1997 35 Section 16 (definition of approved auditor) Omit "in respect of whom a disqualification order is in force under section 67", substitute "who is disqualified from being or acting as an auditor of all RSA providers under section 67". 36 Section 16 (paragraphs (i) and (j) of the definition of reviewable decision) Repeal the paragraphs. 37 After subsection 65(1) Insert: (1A) For the purposes of subsection (1), a person is not an approved auditor, in relation to an RSA provider, if the person is disqualified from being or acting as an approved auditor of that RSA provider under section 67. 38 Section 67 Repeal the section, substitute: 67 Court power of disqualification (1) On application by APRA, the Federal Court of Australia may, by order, disqualify a person from holding any appointment as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied: (a) as mentioned in subsection (3); and (b) that the disqualification is justified. Note: For offences relating to persons disqualified under this section, see section 67B. (2) For the purposes of subsection (1), the Court may disqualify a person from being or acting as an auditor of: (a) a particular RSA provider; or (b) a class of RSA providers; or (c) any RSA provider. (3) The Court may disqualify a person, in accordance with subsection (1), if the Court is satisfied that: (a) the person has failed, whether within or outside Australia, to carry out or perform adequately and properly: (i) the duties of an auditor under this Act or the regulations; or (ii) any duties required by a law of the Commonwealth, a State or a Territory to be carried out or performed by an auditor; or (iii) any functions that an auditor is entitled to perform in relation to this Act or the regulations or the Financial Sector (Collection of Data) Act 2001; or (b) the person is otherwise not a fit and proper person to be an approved auditor for the purposes of this Act. (4) In deciding whether it is satisfied as mentioned in subsection (3), the Court may take into account: (a) any matters specified in the regulations for the purposes of this paragraph; and (b) any other matters the Court considers relevant. (5) In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to: (a) the person's conduct in relation to the functions or duties that the person is required to perform under this Act or the regulations; and (b) any other matters the Court considers relevant. (6) As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification: (a) if the person is, or is acting as, an auditor of an RSA provider—to be given to the RSA provider concerned; and (b) to be published in the Gazette. 67A Court power to revoke or vary a disqualification etc. (1) A person who is disqualified under section 67, or APRA, may apply to the Federal Court of Australia for a variation or a revocation of an order made under that section. (2) At least 21 days before commencing the proceedings, written notice of the application must be lodged: (a) if the person who is disqualified makes the application—by the person with APRA; or (b) if APRA makes the application—by APRA with the person who is disqualified. 67B Disqualified persons not to be auditor of RSA provider (1) A person commits an offence if: (a) the person is, or acts as, an auditor of an RSA provider for the purposes of this Act; and (b) the person is disqualified under section 67 from being or acting as an auditor of that RSA provider; and (c) the person knows that he or she is so disqualified. Penalty: Imprisonment for 2 years. (2) A person commits an offence if: (a) the person is, or acts as, an auditor of an RSA provider for the purposes of this Act; and (b) the person is disqualified under section 67 from being or acting as an auditor of that RSA provider; and (c) the person knows that he or she is so disqualified. Penalty: 60 penalty units. (3) Subsection (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. 39 Subsection 68(3) Repeal the subsection, substitute: (3) The power of APRA under subsection (1) may be exercised whether or not an order disqualifying the auditor has been made under section 67. 40 Application and transitional provisions (1) For the purposes of the Retirement Savings Accounts Act 1997, a disqualification by APRA that is in force under section 67 of that Act immediately before this item commences continues in force after this item commences. (2) For the purposes of the Retirement Savings Accounts Act 1997, a reference in column 1 of the table in the provision of the Retirement Savings Accounts Act 1997 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3. New references to court orders to include references to disqualifications by APRA Item Column 1 Column 2 Column 3 Reference Provision of the Retirement Savings Accounts Act Reference taken to be included 1 a person disqualified under section 67 sections 67A and 67B a person disqualified under section 67 under a disqualification that is continued in force under subitem (1) 2 an order made under section 67 subsection 67A(1) a disqualification made under section 67 that is continued in force under subitem (1) (3) Section 67 of the Retirement Savings Accounts Act 1997 (as in force immediately after this item commences) applies in relation to any conduct engaged in by a person, whether before or after this item commences. Waivers of disqualifications (4) If: (a) a person applies to APRA under section 67 of the Retirement Savings Accounts Act 1997 for the revocation of a disqualification order under section 67 of that Act; and (b) APRA has not made a decision on the application at the time this item commences; the application is taken to be withdrawn at that time. Note: See subitem (5) for the treatment of a decision by APRA under section 67 of the Retirement Savings Accounts Act 1997 in respect of which review proceedings are on foot at commencement. Review proceedings on foot at commencement (5) The amendments to the Retirement Savings Accounts Act 1997 made by this Schedule do not affect: (a) any request, in relation to a decision made under section 67 of that Act, for a review that is pending under section 189 of that Act immediately before the commencement of this item; or (b) any proceeding, in relation to a decision under section 67 of that Act that has been confirmed or varied under subsection 189(4) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or (c) any appeal to a court in relation to a proceeding referred to in paragraph (b). (6) If a disqualification by APRA under section 67 of the Retirement Savings Accounts Act 1997 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (5), the disqualification is, for the purposes of subitem (1), taken to have been in force immediately before this item commences. Superannuation Industry (Supervision) Act 1993 41 Subsection 10(1) (definition of approved auditor) Repeal the definition, substitute: approved auditor means a person included in a class of persons specified in regulations made for the purposes of this definition, but does not include: (a) a person who is disqualified from being or acting as an auditor of all superannuation entities under section 130D; or (b) a person in respect of whom a disqualification order is in force under section 131. 42 Saving regulations The amendment made by item 41 of this Schedule does not affect the continuity of any regulations made for the purposes of the definition of approved auditor in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993 that are in force immediately before this item commences. 43 Subsection 10(1) (paragraphs (pa) and (pb) of the definition of reviewable decision) Repeal the paragraphs. 44 Subsection 10(1) (after paragraph (q) of the definition of reviewable decision) Insert: (qa) a decision of the Regulator under subsection 126A(1), (2) or (3) to disqualify an individual; or (qb) a decision of the Regulator under subsection 126A(5) refusing to revoke the disqualification of an individual; or 45 Application The amendments made by items 43 and 44 of this Schedule apply to decisions made after this item commences. 46 After subsection 35C(1) Insert: (1A) For the purposes of subsection (1), a person is not an approved auditor, in relation to a superannuation entity, if the person is disqualified from being or acting as an approved auditor of that superannuation entity under section 130D. 48 Before section 119 Insert: Division 1—Object of Part and definition of disqualified person 49 Paragraph 120(1)(c) Repeal the paragraph, substitute: (c) either: (i) to the extent that the Regulator is the Commissioner of Taxation—the Regulator has disqualified the individual under section 126A; or (ii) to the extent that the Regulator is APRA—the Federal Court of Australia has disqualified the individual under section 126H. 50 Paragraph 120(2)(a) Repeal the paragraph, substitute: (a) the body corporate knows, or has reasonable grounds to suspect, that a person who is, or is acting as, a responsible officer of the body corporate is: (i) for a person who is a disqualified person only because he or she was disqualified under section 126H—disqualified from being or acting as a responsible officer of the body corporate; or (ii) otherwise—a disqualified person; or 51 Subsection 120(2A) Repeal the subsection (not including the heading). 52 Sections 120A and 121 Repeal the sections. 53 Before section 122 Insert: Division 2—Requirements for custodians and investment managers 54 Sections 126 and 126A Repeal the sections, substitute: Division 3—Disqualified persons Subdivision A—Disqualification by the Commissioner of Taxation 126 Application of this Subdivision This Subdivision applies to the extent that the Regulator is the Commissioner of Taxation. 126A The Regulator may disqualify individuals (1) The Regulator may disqualify an individual if satisfied that: (a) the person has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and (b) the nature or seriousness of the contravention or contraventions, or the number of contraventions, provides grounds for disqualifying the individual. Note: For offences relating to disqualified persons, see Subdivision C. (2) The Regulator may disqualify an individual who is, or was, a responsible officer of a trustee, investment manager or custodian (the body corporate) if satisfied that: (a) the body corporate has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and (b) at the time of one or more of the contraventions, the individual was a responsible officer of the body corporate; and (c) in respect of the contravention or contraventions that occurred while the individual was a responsible officer of the body corporate—the nature or seriousness of it or them, or the number of them, provides grounds for the disqualification of the individual. (3) The Regulator may disqualify an individual if satisfied that the individual is otherwise not a fit and proper person to be a trustee, investment manager or custodian, or a responsible officer of a body corporate that is a trustee, investment manager or custodian. (4) A disqualification takes effect on the day on which it is made. (5) The Regulator may revoke a disqualification on application by the disqualified individual or on its own initiative. A revocation takes effect on the day on which it is made. (6) The Regulator must give the individual written notice of a disqualification, revocation of a disqualification or a refusal to revoke a disqualification. (7) The Regulator must cause particulars of a notice given under subsection (6) or 344(6) (result of internal review) to be published in the Gazette as soon as practicable. 55 Subsection 126D(1) Repeal the subsection. 56 Subsection 126D(1A) Repeal the subsection, substitute: (1A) If, having regard to any of the following: (a) the offence to which the application relates; (b) the time that has passed since the applicant committed the offence; (c) the applicant's age when the applicant committed the offence; (d) the orders made by the court in relation to the offence; (e) any other relevant matter; the Regulator is satisfied that the applicant is highly unlikely to: (f) contravene this Act; and (g) do anything that would result in a self managed superannuation fund not complying with this Act; the Regulator must, by notice in writing given to the applicant, make a declaration waiving the applicant's status as a disqualified person for the purposes of this Part. 57 After section 126F Insert: Subdivision B—Disqualification by the Federal Court of Australia 126G Application of this Subdivision This Subdivision applies to the extent that the Regulator is APRA. 126H Court power of disqualification (1) On application by the Regulator, the Federal Court of Australia may, by order, disqualify an individual from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied: (a) as mentioned in subsection (3), (4) or (5); and (b) that the disqualification is justified. Note: For offences relating to disqualified persons, see Subdivision C. (2) For the purposes of subsection (1), the Court may disqualify an individual from being or acting as: (a) a trustee of: (i) a particular superannuation entity; or (ii) a class of superannuation entities; or (iii) any superannuation entity; or (b) a responsible officer of: (i) a particular body corporate that is a trustee, an investment manager or a custodian of a superannuation entity; or (ii) a class of bodies corporate that are trustees, investment managers or custodians of superannuation entities; or (iii) any body corporate that is a trustee, investme