Commonwealth: Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Act 2008 (Cth)

Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Act 2008 No. 105, 2008 An Act to amend the law relating to banking and insurance, and for related purposes Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Financial Claims Scheme Part 1—Amendment of the Banking Act 1959 Part 2—Amendment of the Insurance Act 1973 Part 3—Amendment of the Australian Prudential Regulation Authority Act 1998 Part 4—Consequential amendments Administrative Decisions (Judicial Review) Act 1977 Corporations Act 2001 Financial Institutions Supervisory Levies Collection Act 1998 Income Tax Assessment Act 1936 Reserve Bank Act 1959 Taxation Administration Act 1953 Part 5—Application and transitional provisions Schedule 2—Other measures: banking Banking Act 1959 Schedule 3—Other measures: general insurance Part 1—Main amendments Insurance Act 1973 Part 2—Related amendments Corporations Act 2001 Schedule 4—Other measures: life insurance Life Insurance Act 1995 Schedule 5—Other measures: transfer of business Financial Sector (Business Transfer and Group Restructure) Act 1999 Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Act 2008 No. 105, 2008 An Act to amend the law relating to banking and insurance, and for related purposes [Assented to 17 October 2008] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) 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. 17 October 2008 2. Schedule 1 Immediately after the provision(s) covered by table item 3. 18 October 2008 3. Schedules 2 to 5 The day after this Act receives the Royal Assent. 18 October 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—Financial Claims Scheme Part 1—Amendment of the Banking Act 1959 1 Subsection 5(1) Insert: account‑holder means an entity (as defined in section 960‑100 of the Income Tax Assessment Act 1997) that has (either alone or jointly with another entity) an account or covered financial product with an ADI. Note: The following heading to subsection 5(1) is inserted "Definitions". 2 Subsection 5(1) Insert: APRA Special Account has the same meaning as in the Australian Prudential Regulation Authority Act 1998. 3 Subsection 5(1) Insert: civil penalty provision: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if: (a) the words "civil penalty" and one or more amounts in penalty units are set out at the foot of the subsection (or section); or (b) another provision of this Act specifies that the subsection (or section) is a civil penalty provision. Note: Schedule 2 deals with contraventions of civil penalty provisions, and treats people who are involved in various ways in such a contravention as if they had contravened the provision concerned. 4 Subsection 5(1) Insert: covered financial product has the meaning given by subsection (8). 5 Subsection 5(1) Insert: declaration time for an ADI means the time the ADI becomes a declared ADI. 6 Subsection 5(1) Insert: declared ADI means an ADI specified in a declaration under section 16AD as an ADI in relation to which Subdivision C of Division 2AA of Part II applies. 7 Subsection 5(1) Insert: Financial Claims Scheme Special Account has the same meaning as in the Australian Prudential Regulation Authority Act 1998. 8 Subsection 5(1) Insert: net credit balance: (a) the net credit balance, at a time, of an account means the excess of the balance of the account in credit in favour of the account‑holder at that time over the amount (if any) of fees, charges and duties that are identified under the agreement under which the account is kept and are payable by the account‑holder to the ADI at that time; and (b) the net credit balance, at a time, of a covered financial product that is not an account means the amount owed to the account‑holder at that time under the terms of the agreement under which the covered financial product is kept. 9 Subsection 5(1) Insert: penalty unit has the meaning given by section 4AA of the Crimes Act 1914. 10 Subsection 5(1) Insert: personal information has the same meaning as in the Privacy Act 1988. 11 Subsection 5(1) Insert: protected account has the meaning given by subsections (4), (5), (6) and (7). Note: The following heading to subsection 5(2) is inserted "Subsidiary". 12 At the end of section 5 Add: Protected account (4) Subject to subsections (5), (6) and (7), a protected account is an account or covered financial product that is kept by an account‑holder (whether alone or jointly with one or more other account‑holders) with an ADI and either: (a) is an account that is prescribed by the regulations for the purposes of this paragraph; or (b) is an account, or covered financial product, that is kept under an agreement between the account‑holder and the ADI requiring the ADI to pay the account‑holder, on demand by the account‑holder or at a time agreed by them, the net credit balance of the account or covered financial product at the time of the demand or the agreed time (as appropriate). Note: Paragraph (a)—the regulations may prescribe the account by reference to a class of accounts: see subsection 13(3) of the Legislative Instruments Act 2003. (5) An account is not a protected account on and after 12 October 2011 unless: (a) it is recorded in Australian currency; or (b) it is kept with an ADI that is a declared ADI on 12 October 2011. (6) A covered financial product that is kept with an ADI and is not an account is not a protected account if APRA applies under section 14F on or after 12 October 2011 for an order that the ADI be wound up. (7) An account or covered financial product is not a protected account if the account or covered financial product is prescribed by the regulations for the purposes of this subsection. Note: The regulations may prescribe the account or covered financial product by reference to a class of accounts or financial products: see subsection 13(3) of the Legislative Instruments Act 2003. Covered financial product (8) The Minister may declare that a specified financial product is a covered financial product. Note: The declaration may specify the product by reference to a class of financial products: see subsection 13(3) of the Legislative Instruments Act 2003. (9) A declaration made under subsection (8), or an amendment of the declaration, is a legislative instrument, but neither section 42 (disallowance) nor Part 6 (sunsetting) of the Legislative Instruments Act 2003 applies to the declaration or amendment. (10) The declaration or amendment takes effect from the time it is made, despite subsections 12(1) and (2) of the Legislative Instruments Act 2003. Note: The following heading to subsection 5(3) is inserted "Relevant group of bodies corporate". 13 Subsection 13A(3) Repeal the subsection, substitute: Priorities for application of assets of ADI in Australia (3) If an ADI becomes unable to meet its obligations or suspends payment, the assets of the ADI in Australia are to be available to meet the ADI's liabilities in the following order: (a) first, the ADI's liabilities (if any) to APRA because of the rights APRA has against the ADI because of section 16AI; (b) second, the ADI's debts (if any) to APRA under section 16AO; (c) third, the ADI's deposit liabilities in Australia (other than any such liabilities covered under paragraph (a)); (d) fourth, the ADI's other liabilities (in the order of their priority apart from this subsection). Note: Subsection (3) applies whatever other consequences flow from the ADI becoming unable to meet its liabilities or suspending payment (such as investigation of the ADI's affairs, or control of its business, under this Division, or winding up of the ADI). Note: The following heading to subsection 13A(4) is inserted "ADI's assets must at least equal its deposit liabilities". 14 At the end of section 14F Add: Notifying Minister of application (3) If APRA makes an application under subsection (1), APRA must inform the Minister of the application as soon as possible. Note: Once informed, the Minister may choose to apply Subdivision C of Division 2AA in relation to the ADI so some depositors can receive payments earlier than they would in the winding up of the ADI. 15 After Division 2 of Part II Insert: Division 2AA—Financial claims scheme for account‑holders with insolvent ADIs Subdivision A—Preliminary 16AB Purpose of this Division The main purpose of this Division is to provide for a scheme that: (a) allows the Minister to make a declaration about an ADI that APRA has sought to have wound up for insolvency; and (b) entitles account‑holders who have certain protected accounts with a declared ADI to be paid certain amounts to maintain the account‑holders' liquidity before they would receive payment in a winding up of the ADI; and (c) substitutes APRA for those account‑holders as a creditor of the declared ADI to the extent of the entitlements. 16AC APRA's functions relating to this Division APRA's functions include: (a) meeting entitlements under Subdivision C; and (b) preparing, and assisting the Minister to prepare, for the application of that Subdivision in relation to ADIs; and (c) meeting APRA's other obligations under this Division and the regulations made for the purposes of this Division. Subdivision B—Declaration of ADI 16AD Declaration that Subdivision C applies in relation to ADI (1) The Minister may declare that Subdivision C applies in relation to a specified ADI if APRA has applied under section 14F for the ADI to be wound up. Note: The Minister cannot make a declaration relating to a foreign ADI because APRA cannot apply for a foreign ADI to be wound up: see section 11E. Declaration to specify amount for meeting entitlements (2) The declaration must also specify the amount (if any) that is to be credited to the Financial Claims Scheme Special Account in connection with the application of Subdivision C in relation to the declared ADI. If APRA's application under section 14F was made on or after 12 October 2011, the amount must not be more than $20,000,000,000. Declaration to specify amount for administration (3) The declaration must also specify the amount (if any) that is to be credited to the APRA Special Account in connection with the administration of this Division in relation to the declared ADI. The amount must not be more than $100,000,000. Amendment of specification of amounts (4) The Minister may amend a declaration made under subsection (1), but only to change the specification of an amount under subsection (2) or (3), within the limit set in that subsection. Declaration cannot be revoked (5) The Minister cannot revoke a declaration made under subsection (1). Declaration or amendment not disallowable or subject to expiry (6) A declaration made under subsection (1), or an amendment of the declaration, is a legislative instrument, but neither section 42 (disallowance) nor Part 6 (sunsetting) of the Legislative Instruments Act 2003 applies to the declaration or amendment. Effect of declaration or amendment (7) The declaration or amendment: (a) takes effect from the time it is made, despite subsections 12(1) and (2) of the Legislative Instruments Act 2003; and (b) has effect according to its terms. Declaration not to specify ADI by reference to class (8) Subsection 13(3) of the Legislative Instruments Act 2003 does not apply to a declaration under subsection (1) specifying an ADI. Note: This ensures that a declaration must specify an ADI individually, and cannot specify it by reference to a class of ADIs. 16AE Advice and information for decision on making declaration (1) The Minister may give APRA, ASIC or the Reserve Bank a written request for advice or information about a matter relevant to making a decision about making a declaration under section 16AD (including a matter relating to the affairs of an ADI). (2) As soon as reasonably practicable after being given the request, APRA, ASIC or the Reserve Bank must give the Minister the advice or information about the matter. (3) In making the decision, the Minister must take into account the advice and information (if any) that he or she has been given before making the decision. This does not limit what the Minister may take into account in making the decision. Subdivision C—Payment of account‑holders with declared ADI 16AF Payment of account‑holders with declared ADI (1) An account‑holder who has a protected account with a net credit balance with a declared ADI at the declaration time is entitled to be paid by APRA an amount equal to the sum of: (a) that balance; and (b) the interest (if any) accrued by, but not credited to, the account‑holder in connection with the protected account before the declaration time; increased or decreased in accordance with the regulations to take account of clearance, within the period prescribed by the regulations, of transactions connected with the protected account and entered into before the declaration time. Joint protected accounts (2) If the account mentioned in subsection (1) is held jointly by 2 or more account‑holders with the declared ADI, that subsection entitles each of the account‑holders to an equal share of the amount to which one of those account‑holders would be entitled if it alone had the account with the declared ADI. 16AG Limit on payments to account‑holder with declared ADI (1) Despite section 16AF, an account‑holder is not entitled under that section to be paid, in connection with the protected account or protected accounts the account‑holder has with a particular declared ADI at a particular time, one or more amounts totalling more than the limit prescribed by, or worked out under, the regulations. (2) The regulations may prescribe, or provide for working out, different limits for the purposes of subsection (1) relating to account‑holders in different classes. (3) Despite section 16AF, if: (a) the account‑holder has 2 or more protected accounts with the declared ADI at that time; and (b) subsection (1) of this section reduces the total amount to which the account‑holder would otherwise be entitled under section 16AF in connection with those protected accounts; APRA may determine in writing, for each of the protected accounts, the amount (if any) of the entitlement under that section connected with the protected account (so that the total of the entitlements equals the limit prescribed by, or worked out under, the regulations for the purposes of subsection (1) of this section). Note: Amounts may be determined by reference to a class, or more than one class, of accounts: see subsection 46(3) of the Acts Interpretation Act 1901. (4) In making the determination, the desirability of the account‑holder receiving its entitlements as early as possible is to be taken into account. This does not limit the matters that may be taken into account in making a determination. 16AH Payment Various ways of meeting entitlement (1) An account‑holder's entitlement under this Subdivision to be paid an amount may be met: (a) by paying the amount to the account‑holder as a single amount or in instalments determined by APRA; or (b) by applying the amount, as a single amount or in instalments determined by APRA, for the account‑holder's benefit, by establishing an account with an ADI on behalf of the account‑holder or in another way; or (c) by paying part of the amount to the account‑holder and applying the rest of the amount for the account‑holder's benefit. (2) The regulations may make provision for or in relation to the ways in which account‑holders' entitlements under this Subdivision to be paid amounts may be met. Establishment of account by APRA for meeting entitlement (3) APRA may establish, on behalf of an account‑holder who has an entitlement under this Subdivision, an account with an ADI (except a declared ADI) for the purposes of wholly or partly meeting the entitlement. (4) Subsection (3) has effect: (a) whether or not the account‑holder consents to the establishment of the account; and (b) despite any other law of the Commonwealth relating to the establishment of such an account. (5) If an account‑holder has an entitlement under this Subdivision connected with a protected account of a kind prescribed by the regulations for the purposes of this subsection, APRA must establish an account of the same kind on behalf of the account‑holder for the purposes of wholly or partly meeting the entitlement. Act to meet entitlement is not provision of designated service (6) An act done by any of the following persons for the purposes of meeting an account‑holder's entitlement under this Subdivision is taken, for the purposes of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, not to be the provision of a designated service by the person: (a) APRA; (b) the Reserve Bank. Note: One effect of subsection (6) is that the person's act does not make the person a reporting entity for the purposes of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006. Exemption from section 32 of Anti‑Money Laundering Act (7) Section 32 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 does not apply to a designated service described in item 1 of the table in subsection 6(2) of that Act provided by an ADI as a result of the exercise of APRA's power under subsection (3) of this section (whether or not subsection (5) required APRA to exercise that power). 16AI Substitution of APRA for account‑holder as ADI's creditor (1) When an ADI becomes a declared ADI, then, by force of this subsection, the right of an account‑holder who has a protected account with the ADI to be paid an amount by the ADI in connection with the account: (a) is reduced to the extent of the account‑holder's entitlement under this Subdivision connected with the account; and (b) to the extent of the reduction, becomes a right of APRA. (2) APRA may exercise or assign a right it has under paragraph (1)(b). Note: Under section 11 of the Australian Prudential Regulation Authority Act 1998, APRA's property is generally held on behalf of the Commonwealth. Subdivision D—Administration 16AJ Requiring assistance APRA may, by written notice given to any of the following persons, require the person to give APRA such reasonable assistance in the performance of its functions, and the exercise of its powers, under this Division as is specified: (a) an ADI (whether or not it is a declared ADI); (b) an administrator appointed under subsection 13A(1) to take control of an ADI's business; (c) a liquidator (including a provisional liquidator) appointed in connection with the winding up, or proposed winding up, of an ADI. Note: APRA may amend or vary the requirement in writing: see subsection 33(3) of the Acts Interpretation Act 1901. 16AK Obtaining information relevant to determining and paying entitlements (1) APRA may, by written notice given to: (a) an ADI (whether or not it is a declared ADI); or (b) an administrator appointed under subsection 13A(1) to take control of an ADI's business; or (c) a liquidator (including a provisional liquidator) appointed in connection with the winding up, or proposed winding up, of an ADI; require the ADI, administrator or liquidator to give a specified person specified information about an account‑holder relevant to one or more of the actions described in subsection (4) in a specified way within a reasonable specified time for the person to use in taking one or more of those actions. Note: APRA may amend or vary the requirement in writing: see subsection 33(3) of the Acts Interpretation Act 1901. (2) The person specified in the requirement must be one of the following: (a) APRA; (b) an APRA member whose duties relate to an action described in subsection (4); (c) an APRA staff member whose duties relate to an action described in subsection (4); (d) a person to whom APRA has delegated a power or function under this Division that relates to an action described in subsection (4); (e) a person who is an officer or employee of a person described in paragraph (d) and whose duties relate to an action described in subsection (4). (3) The information specified in the requirement may be or include either or both of the following: (a) personal information about the account‑holder (if he or she is an individual); (b) the tax file number (as defined in section 202A of the Income Tax Assessment Act 1936) of the account‑holder. This does not limit the information that may be specified in the requirement. (4) The actions are as follows: (a) identifying an account‑holder who may have an entitlement under Subdivision C; (b) determining whether an account‑holder has an entitlement under Subdivision C; (c) determining the amount of an entitlement under Subdivision C; (d) meeting an entitlement under Subdivision C; (e) establishing an account under section 16AH on behalf of an account‑holder with an entitlement under Subdivision C; (f) making a disclosure required by section 16AT in connection with the establishment of an account under section 16AH by APRA on behalf of an account‑holder with an entitlement under Subdivision C; (g) assessing whether and how information could be provided by an ADI (or a liquidator of the ADI, if one is appointed) to enable the actions described in paragraphs (a), (b), (c), (d), (e) and (f) to be taken if the ADI were to become a declared ADI. (5) Subsection (1) does not apply in relation to a foreign ADI. (6) This section does not limit section 16AJ. 16AL Enforcing requirement for assistance or information Requirement made of ADI—civil penalty (1) An ADI must comply with a requirement made of it under section 16AJ or subsection 16AK(1). Civil penalty: 10,000 penalty units. Requirement made of ADI—offence (2) An ADI commits an offence if: (a) it does, or fails to do, an act; and (b) the doing of the act, or the failure to do the act, results in a contravention of a requirement made of the ADI under section 16AJ or subsection 16AK(1). Penalty: 200 penalty units. (3) An offence against subsection (2) is an indictable offence. Note: Section 4K (Continuing and multiple offences) of the Crimes Act 1914 applies to an offence against subsection (2) relating to subsection 16AK(1), so an ADI commits an offence for each day it does not comply with a requirement under that subsection (to give information within a particular time). Requirement made of ADI—offence by officer (4) An officer (as defined in section 9 of the Corporations Act 2001) of an ADI commits an offence if: (a) the officer fails to take reasonable steps to ensure that the ADI complies with a requirement made of it under section 16AJ or subsection 16AK(1); and (b) the officer's duties include ensuring that the ADI complies with the requirement. Penalty: 50 penalty units. (5) Subsection (4) does not apply to an officer who is a liquidator (including a provisional liquidator) of the ADI. Note: A defendant bears an evidential burden in relation to the matter in subsection (5): see subsection 13.3(3) of the Criminal Code. (6) If an officer of an ADI fails to take reasonable steps to ensure that the ADI complies with a requirement made of it under subsection 16AK(1) in circumstances that give rise to the officer committing an offence against subsection (4) of this section, the officer commits an offence against that subsection in respect of: (a) the first day on which the offence is committed; and (b) each subsequent day (if any) on which the circumstances that gave rise to the officer committing the offence continue (including the day of conviction for any such offence or any later day). Note: This subsection does not affect the application of section 4K of the Crimes Act 1914 to other offences against this Act (including subsection (2)) or the regulations. Liquidator to comply with requirement made of liquidator (7) A liquidator (including a provisional liquidator) must comply with a requirement made of the liquidator under section 16AJ or subsection 16AK(1). Note: Action may be taken under the Corporations Act 2001 against a liquidator who does not comply with such a requirement. 16AM Recovery of overpayments The regulations may make provision for and in relation to the recovery by APRA of the excess of an amount paid to, or applied for the benefit of, an account‑holder purportedly to meet an entitlement of the account‑holder under Subdivision C over the account‑holder's entitlement (if any) under that Subdivision. 16AN APRA may delegate functions and powers under this Division (1) APRA may, by writing under its seal, delegate any or all of APRA's functions and powers under this Division to a person. (2) In performing or exercising functions or powers delegated under subsection (1), the delegate must comply with any directions given by APRA. (3) This section does not limit section 15 of the Australian Prudential Regulation Authority Act 1998. Note: Section 15 of the Australian Prudential Regulation Authority Act 1998: (a) makes the agreement of the Chair of ASIC a condition for a delegation to an ASIC member or an ASIC staff member; and (b) makes the agreement of the Governor of the Reserve Bank a condition for a delegation to the Governor or Deputy Governor of the Reserve Bank or to an officer of the Reserve Bank Service. 16AO APRA's costs of administration (1) The costs incurred by APRA in relation to the exercise of its powers and the performance of its functions under this Division (whether by APRA or by a delegate) relating to a declared ADI are a debt due by the declared ADI to APRA. (2) The debt is admissible to proof against the declared ADI in the winding up of the ADI. (3) Subsection (1) does not apply to the amounts of entitlements under Subdivision C. Note: APRA may be able to recover those amounts through the rights it acquires under section 16AI from the account‑holder. Subdivision E—Account‑holder's claims against ADI remaining after entitlement 16AP When this Subdivision applies This Subdivision applies if: (a) a court orders the winding up of an ADI that becomes a declared ADI before, on or after the order is made; and (b) on making the order, the court appoints a liquidator of the ADI; and (c) an account‑holder has an entitlement under Subdivision C connected with a protected account the account‑holder has with the ADI; and (d) after the operation of section 16AI of this Act, section 553C of the Corporations Act 2001 and, if relevant, section 554B of that Act, there is still a debt payable by the ADI to the account‑holder, or a claim of the account‑holder against the ADI, based on a right to be paid an amount by the ADI in connection with the protected account. 16AQ Liquidator may admit debt or claim without normal proof (1) The liquidator may admit the debt or claim even if it has not been proved by the account‑holder in accordance with the Corporations Act 2001 and regulations made under that Act. (2) However, the liquidator must act in accordance with the regulations (if any) made for the purposes of this subsection in deciding whether to admit or reject the debt or claim, and the extent to which to admit or reject the debt or claim. Note: This section overrides any requirements imposed on the liquidator by the Corporations Act 2001 and regulations under that Act in relation to proof of the debt or claim and a decision whether to admit or reject the debt or claim: see section 70B of this Act. 16AR How liquidator must pay distributions to account‑holder (1) This section applies if, in the winding up of the ADI, a distribution attributable to the protected account is payable to the account‑holder and the protected account was of a kind prescribed by the regulations for the purposes of this subsection. (2) The liquidator must pay the distribution (so far as it is attributable to the account) into an account of the same kind that is held by the account‑holder with an ADI (except a declared ADI). (3) If the account‑holder does not hold an account of that kind, the liquidator must establish, on behalf of the account‑holder, an account of that kind with an ADI (except a declared ADI) for the payment of the distribution in accordance with subsection (2). (4) Subsection (3) empowers the liquidator to establish the account: (a) whether or not the account‑holder consents to the establishment of the account; and (b) despite any other law of the Commonwealth relating to the establishment of such an account. 16AS APRA may disclose relevant personal information to liquidator Information about account‑holder's entitlement (1) APRA may disclose to the liquidator personal information about the fact that the account‑holder has an entitlement under Subdivision C, and the amount of that entitlement, for the purpose of enabling the liquidator to decide whether to admit or reject the debt or claim in whole or in part. Information relevant to section 16AR (2) APRA may disclose to the liquidator personal information about the account‑holder for the purpose of enabling the liquidator to determine whether subsection 16AR(2) or (3) applies and, if it does, for complying with it. Subdivision F—Disclosure of information relating to new accounts 16AT APRA or liquidator to disclose information to ADI (1) This section applies if, on behalf of an account‑holder with an entitlement under Subdivision C: (a) APRA establishes an account with an ADI under section 16AH; or (b) a liquidator establishes an account with an ADI under section 16AR. (2) In the circumstances prescribed by the regulations, whichever of APRA and the liquidator established the account must disclose to the ADI the information (if any) that: (a) is connected with the establishment of the account; and (b) is prescribed by the regulations for the purposes of this paragraph. (3) The regulations may prescribe different information in relation to different circumstances for disclosure. (4) The information prescribed by the regulations may be personal information about the account‑holder (if he or she is an individual). This does not limit the information that may be prescribed by the regulations. Subdivision G—Exceptions to Part IV of the Trade Practices Act 1974 16AU Exceptions to Part IV of the Trade Practices Act 1974 For the purposes of subsection 51(1) of the Trade Practices Act 1974, the following things are specified and specifically authorised: (a) anything done in the exercise of powers, or performance of functions, under this Division, or regulations made for the purposes of this Division, except Subdivision E; (b) anything done to enable or facilitate the exercise of those powers or performance of those functions; (c) anything incidental to the exercise of those powers or performance of those functions. 16 After section 65A Insert: 65B Civil penalties Schedule 2 (Civil penalties) has effect. 17 At the end of the Act Add: Schedule 2—Civil penalties Note: See section 65B. Part 1—Contravention of a civil penalty provision 1 Federal Court may order person to pay pecuniary penalty for contravening civil penalty provision Application for order (1) Within 6 years of a person contravening a civil penalty provision, APRA may apply, on behalf of the Commonwealth, to the Federal Court of Australia for an order that the person pay the Commonwealth a pecuniary penalty. Court may order person to pay pecuniary penalty (2) If the Court is satisfied that the person has contravened a civil penalty provision, the Court may order the person to pay to the Commonwealth for each contravention the pecuniary penalty that the Court determines is appropriate (but not more than the relevant amount specified for the provision). Determining amount of pecuniary penalty (3) In determining the pecuniary penalty, the Court must have regard to all relevant matters, including: (a) the nature and extent of the contravention; and (b) the nature and extent of any loss or damage suffered as a result of the contravention; and (c) the circumstances in which the contravention took place; and (d) whether the person has previously been found by the Court in proceedings under this Act to have engaged in any similar conduct. Conduct contravening more than one civil penalty provision (4) If conduct constitutes a contravention of 2 or more civil penalty provisions, proceedings may be instituted under this Act against a person in relation to the contravention of any one or more of those provisions. However, the person is not liable to more than one pecuniary penalty under this clause in respect of the same conduct. 2 Contravening a civil penalty provision is not an offence A contravention of a civil penalty provision is not an offence. 3 Persons involved in contravening civil penalty provision (1) A person must not: (a) aid, abet, counsel or procure a contravention of a civil penalty provision; or (b) induce (by threats, promises or otherwise) a contravention of a civil penalty provision; or (c) be in any way directly or indirectly knowingly concerned in, or party to, a contravention of a civil penalty provision; or (d) conspire to contravene a civil penalty provision. (2) This Schedule applies to a person who contravenes subclause (1) in relation to a civil penalty provision as if the person had contravened the provision. (3) However, if an individual contravenes subclause (1) in relation to a civil penalty provision that can be contravened only by a body corporate, subclause 1(2) applies as if the reference in that subclause to the relevant amount specified for the provision were a reference to 1/5 of the relevant amount specified for the provision. 4 Recovery of a pecuniary penalty If the Federal Court of Australia orders a person to pay a pecuniary penalty: (a) the penalty is payable to the Commonwealth; and (b) the Commonwealth may enforce the order as if it were a judgment of the Court. 5 Civil evidence and procedure rules for pecuniary penalty orders The Federal Court of Australia must apply the rules of evidence and procedure for civil matters when hearing proceedings for a pecuniary penalty order. Part 2—Civil penalty proceedings and criminal proceedings 6 Civil proceedings after criminal proceedings The Federal Court of Australia must not make a pecuniary penalty order against a person for a contravention of a civil penalty provision if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention. 7 Criminal proceedings during civil proceedings (1) Proceedings for a pecuniary penalty order against a person for a contravention of a civil penalty provision are stayed if: (a) criminal proceedings are started or have already been started against the person for an offence; and (b) the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention. (2) The proceedings for the order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings for the order are dismissed. 8 Criminal proceedings after civil proceedings Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether a pecuniary penalty order has been made against the person. 9 Evidence given in proceedings for penalty not admissible in criminal proceedings Evidence of information given or evidence of production of documents by an individual is not admissible in criminal proceedings against the individual if: (a) the individual previously gave the evidence or produced the documents in proceedings for a pecuniary penalty order against the individual for a contravention of a civil penalty provision (whether or not the order was made); and (b) the conduct alleged to constitute the offence is substantially the same as the conduct that was claimed to constitute the contravention. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order. Part 2—Amendment of the Insurance Act 1973 18 At the end of subsection 2A(2) Add: ; and (f) providing for policyholders, who have valid claims connected with certain policies issued by certain general insurers that are under judicial management and that APRA believes are insolvent, to be paid by APRA the amounts to which the policyholders are entitled before they would receive payment in winding up of the general insurers. 19 Subsection 3(1) Insert: APRA Special Account has the same meaning as in the Australian Prudential Regulation Authority Act 1998. 20 Subsection 3(1) Insert: civil penalty provision: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if: (a) the words "civil penalty" and one or more amounts in penalty units are set out at the foot of the subsection (or section); or (b) another provision of this Act specifies that the subsection (or section) is a civil penalty provision. 21 Subsection 3(1) Insert: declared general insurer means a general insurer specified in a declaration under section 62ZZC as a general insurer in relation to which Division 3 of Part VC applies. 22 Subsection 3(1) Insert: Financial Claims Scheme Special Account has the same meaning as in the Australian Prudential Regulation Authority Act 1998. 23 Subsection 3(1) Insert: penalty unit has the meaning given by section 4AA of the Crimes Act 1914. 24 Subsection 3(1) Insert: personal information has the same meaning as in the Privacy Act 1988. 25 Subsection 3(1) Insert: protected policy means a policy other than: (a) a policy prescribed by the regulations as not being a protected policy; and (b) a policy determined under section 62ZY not to be a protected policy. 26 After Part VB Insert: Part VC—Financial claims scheme for policyholders with insolvent general insurers Division 1—Preliminary 62ZW Purpose of this Part The main purpose of this Part is to provide for a scheme that: (a) allows the Minister to make a declaration about a general insurer that is under judicial management and that APRA believes is insolvent; and (b) entitles certain persons, who have valid claims connected with certain protected policies issued by a declared general insurer, to be paid certain amounts before they would receive payment in a winding up of the general insurer; and (c) substitutes APRA for those persons as a creditor of the declared general insurer to the extent of the entitlements. 62ZX APRA's functions relating to this Part APRA's functions include: (a) meeting entitlements under Division 3; and (b) preparing, and assisting the Minister to prepare, for the application of that Division in relation to general insurers; and (c) meeting APRA's other obligations under this Part and the regulations made for the purposes of this Part. 62ZY Determination that policies are not protected policies APRA may determine in writing that a policy is not a protected policy if it is reasonable to conclude, from the nature of the policy and/or the circumstances in which it was issued, that the policy was issued primarily to make the policyholder entitled to a payment under this Part. 62ZZ Determination that persons do not have entitlements The Minister may, by legislative instrument, determine that persons in a specified class do not have entitlements under this Part. 62ZZA Allowing extra time for claims (1) Before, on or after the day prescribed by the regulations for the purposes of subparagraph 62ZZF(1)(b)(ii), APRA may specify in writing a later day as the day on which the period for making one or more claims that may give rise to an entitlement under this Part ends. (2) An instrument made under subsection (1) that specifies a day in relation to a single claim identified in the instrument is not a legislative instrument. (3) Otherwise, an instrument made under subsection (1) is a legislative instrument. (4) As soon as practicable after making an instrument described in subsection (2), APRA must take the steps it considers reasonable to inform a person whom it believes could make the claim concerned of the day specified in the instrument. 62ZZB Approval of forms APRA may approve in writing forms for the purposes of subsections 62ZZJ(1) and (3). Division 2—Declaration of general insurer 62ZZC Declaration that Division 3 applies in relation to general insurer (1) The Minister may declare that Division 3 applies in relation to a specified general insurer if: (a) the general insurer is under judicial management under Division 1 of Part VB; and (b) APRA has advised the Minister under this Division that APRA believes that: (i) the general insurer is insolvent as defined in section 95A of the Corporations Act 2001; or (ii) the general insurer is a foreign general insurer and is unable to pay, from its assets in Australia, all its debts that are liabilities in Australia other than pre‑authorisation liabilities, as and when those debts become due and payable. Note 1: Section 116A deals with assets and liabilities in Australia. Note 2: The declaration does not end the judicial management of the general insurer. Declaration to specify amount for meeting entitlements (2) The declaration must also specify the amount (if any) that is to be credited to the Financial Claims Scheme Special Account in connection with the application of Division 3 in relation to the declared general insurer. The amount must not be more than $20,000,000,000. Declaration to specify amount for administration (3) The declaration must also specify the amount (if any) that is to be credited to the APRA Special Account in connection with the administration of this Part in relation to the declared general insurer. The amount must not be more than $100,000,000. Amendment of specification of amounts (4) The Minister may amend a declaration made under subsection (1), but only to change the specification of an amount under subsection (2) or (3), within the limit set in that subsection. Declaration cannot be revoked (5) The Minister cannot revoke a declaration made under subsection (1). Declaration or amendment not disallowable or subject to expiry (6) A declaration made under subsection (1), or an amendment of the declaration, is a legislative instrument, but neither section 42 (disallowance) nor Part 6 (sunsetting) of the Legislative Instruments Act 2003 applies to the declaration or amendment. Effect of declaration or amendment (7) The declaration or amendment: (a) takes effect from the time it is made, despite subsections 12(1) and (2) of the Legislative Instruments Act 2003; and (b) has effect according to its terms. Declaration not to specify general insurer by reference to class (8) Subsection 13(3) of the Legislative Instruments Act 2003 does not apply to a declaration under subsection (1) specifying a general insurer. Note: This ensures that a declaration must specify a general insurer individually, and cannot specify it by reference to a class of general insurers. 62ZZD Advice and information for decision on making declaration (1) The Minister may give APRA, ASIC or the Reserve Bank of Australia a written request for advice or information about a matter relevant to making a decision about making a declaration under section 62ZZC (including a matter relating to the affairs of a general insurer). (2) As soon as reasonably practicable after being given the request, APRA, ASIC or the Reserve Bank of Australia must give the Minister the advice or information about the matter. (3) In making the decision, the Minister must take into account the advice and information that he or she has been given before making the decision. This does not limit what the Minister may take into account in making the decision. 62ZZE APRA may advise Minister of its belief of insolvency (1) This section applies if APRA believes that a particular general insurer: (a) is insolvent as defined in section 95A of the Corporations Act 2001; or (b) is a foreign general insurer and is unable to pay, from its assets in Australia, all its debts that are liabilities in Australia other than pre‑authorisation liabilities, as and when those debts become due and payable. Note: Section 116A deals with assets and liabilities in Australia. (2) APRA may give the Minister written advice of APRA's belief. Division 3—Early payment of claims 62ZZF Entitlement to payment of claimant under protected policy Who this section covers (1) This section applies to a person if: (a) the person is entitled to claim under insurance cover provided under a protected policy issued by a general insurer that later became a declared general insurer (whether the entitlement to claim arises because the cover is provided to the person under the policy or because the person is otherwise entitled to claim under the cover); and (b) the person makes a claim under that cover within the period: (i) starting on the day prescribed by the regulations for the purposes of this subparagraph; and (ii) ending on a day prescribed by the regulations for the purposes of this subparagraph or, if APRA specifies a later day, that later day; and (c) APRA determines under section 62ZZI that the insurer is liable to the person in respect of the claim; and (d) the person is not covered by a determination under section 62ZZ. Claims worth less than $5,000 (2) The person is entitled to be paid by APRA an amount equal to the insurer's liability to the person in respect of the claim if APRA determines that the amount of the liability is less than $5,000. Note: Section 62ZZI requires APRA to determine not only whether the insurer has a liability in respect of the claim but also the amount of the liability. Claims worth $5,000 or more (3) The person is entitled to be paid by APRA an amount equal to the insurer's liability to the person in respect of the claim if APRA determines that: (a) the amount of the liability is $5,000 or more; and (b) the person meets the conditions prescribed by the regulations for the purposes of this paragraph. Note 1: Section 62ZZI requires APRA to determine not only whether the insurer has a liability in respect of the claim but also the amount of the liability. Note 2: Section 62ZZJ requires APRA to determine whether the person meets the prescribed conditions, if the person applies for the determination. Different claim periods for different claims (4) To avoid doubt, regulations for the purposes of subparagraph (1)(b)(i) or (ii) may prescribe different days for the purposes of that subparagraph applying in relation to different claims or claims under different cover. 62ZZG Entitlement to payment of third party Who this section covers (1) This section applies to a person if: (a) APRA determines under section 62ZZJ that APRA is satisfied that section 51 of the Insurance Contracts Act 1984 permits the person to recover an amount (the recoverable amount) from a general insurer because of insurance cover the insurer provided under a protected policy the insurer issued before becoming a declared general insurer; and (b) the person is not covered by a determination under section 62ZZ. Recoverable amounts less than $5,000 (2) The person is entitled to be paid by APRA an amount equal to the recoverable amount if APRA determines that the recoverable amount is less than $5,000. Note: Section 62ZZJ requires APRA to determine not only whether it is satisfied the person could recover under section 51 of the Insurance Contracts Act 1984 but also the amount the person could recover. Recoverable amounts of $5,000 or more (3) The person is entitled to be paid by APRA an amount equal to the recoverable amount if APRA determines that: (a) the recoverable amount is $5,000 or more; and (b) the person meets the conditions prescribed by the regulations for the purposes of this paragraph. Note 1: Section 62ZZJ requires APRA to determine not only whether it is satisfied the person could recover under section 51 of the Insurance Contracts Act 1984 but also the amount the person could recover. Note 2: Section 62ZZJ also requires APRA to determine whether the person meets the prescribed conditions, if the person applies for the determination. 62ZZH Entitlement on basis of notionally extended cover (1) If the period of insurance cover provided under a protected policy issued by a general insurer includes the time when the insurer becomes a declared general insurer, sections 62ZZF, 62ZZG, 62ZZI and 62ZZJ apply as if the period of the cover extended for 28 days after that time, even if: (a) the policy is cancelled within those 28 days; or (b) the period of the cover would otherwise have ended before the end of those 28 days. Note: The effects of applying sections 62ZZF and 62ZZG as if the period of cover were extended include those sections applying as if: (a) the entitlement to claim under that cover were correspondingly extended; and (b) the liability of the insurer were also extended in respect of such claims. (2) However, if the policyholder cancelled the policy within those 28 days, those sections apply as if the period of the cover extended only until the cancellation of the policy. 62ZZI APRA must determine insurer's liability in respect of claim (1) If APRA becomes aware that a person has, in the period described in paragraph 62ZZF(1)(b), made a claim under insurance cover provided under a protected policy issued by a general insurer that became a declared general insurer after the issue, APRA must determine in accordance with the policy: (a) whether the insurer is liable to the person in respect of the claim; and (b) the amount of that liability (if any). (2) The determination must be made in writing as soon as reasonably practicable after APRA becomes aware that the claim has been made. 62ZZJ Determinations APRA must make on application Determination that person meets conditions prescribed (1) Subsection (2) has effect if a person applies to APRA, in the form (if any) approved by APRA for the purposes of this subsection, for a determination that the person meets the conditions prescribed by the regulations for the purposes of paragraph 62ZZF(3)(b) or 62ZZG(3)(b). (2) APRA must determine in writing, as soon as reasonably practicable after the application is made, whether the person meets the conditions. Determination that person may recover amount from insurer (3) Subsection (4) has effect if a person applies to APRA, in the form (if any) approved by APRA for the purposes of this subsection, for a determination that APRA is satisfied that section 51 of the Insurance Contracts Act 1984 permits the person to recover an amount from a general insurer because of insurance cover the insurer provided under a protected policy the insurer issued before becoming a declared general insurer. (4) APRA must determine in writing, as soon as reasonably practicable after the application is made: (a) whether APRA is satisfied that section 51 of the Insurance Contracts Act 1984 permits the person to recover an amount from the general insurer because of the insurance cover; and (b) what that amount (if any) is. Giving applicant notice of determination (5) As soon as reasonably practicable after making a determination under subsection (2) or (4), APRA must give the applicant a copy of the determination. 62ZZK Payment (1) A person's entitlement under this Division to be paid an amount may be met: (a) by paying the amount to the person as a single amount or in instalments determined by APRA; or (b) by applying the amount, as a single amount or in instalments determined by APRA, for the person's benefit; or (c) by paying part of the amount to the person and applying the rest of the amount for the person's benefit. (2) The regulations may make provision for or in relation to the ways in which persons' entitlements under this Division to be paid amounts may be met. 62ZZL Substitution of APRA as insurer's creditor (1) When a person's entitlement arises under this Division, the rights the person had against the general insurer in relation to the protected policy cease to be rights of the person and become rights of APRA, by force of this subsection. Note 1: A person's entitlement arises under this Division when all of the relevant conditions in section 62ZZF or 62ZZG are met. This will generally happen at the last time APRA makes a relevant determination under section 62ZZI or 62ZZJ. Note 2: APRA's right against the general insurer has the same priority in the winding up of the general insurer as it would have had if it had continued to be a right of the person. (2) APRA may exercise or assign a right it has under subsection (1). Note: Under section 11 of the Australian Prudential Regulation Authority Act 1998, APRA's property is generally held on behalf of the Commonwealth. 62ZZM Meeting of entitlement taken to be payment by insurer (1) When an amount of a person's entitlement under this Division connected with a general insurer and a protected policy is met, the person is taken, for the purposes described in subsection (2), to have been paid the amount by the general insurer. (2) The purposes are: (a) the purposes of subrogation of the general insurer in connection with the protected policy; and (b) the purposes (if any) prescribed by the regulations for the purposes of this paragraph. (3) To avoid doubt, subsection (1) does not affect the rights APRA has under section 62ZZL against the general insurer. Division 4—Administration 62ZZN APRA to try to ensure awareness of making of claims APRA must take all reasonable steps to ensure that it is made aware, as soon as practicable, of: (a) the making of a claim described in section 62ZZI within the period described in paragraph 62ZZF(1)(b); and (b) the time of the making of the claim. Note: APRA might meet this requirement by requiring under section 62ZZP the general insurer concerned, or the liquidator of the general insurer, to inform APRA of the making of such a claim. 62ZZO Requiring assistance APRA may, by written notice given to either of the following persons, require the person to give APRA such reasonable assistance in the performance of its functions, and the exercise of its powers, under this Part as is specified: (a) a general insurer (whether or not it is a declared general insurer); (b) a liquidator (including a provisional liquidator) appointed in connection with the winding up, or proposed winding up, of a general insurer. Note: APRA may amend or vary the requirement in writing: see subsection 33(3) of the Acts Interpretation Act 1901. 62ZZP Obtaining information relevant to determining and paying entitlements (1) APRA may, by written notice given to: (a) a general insurer (whether or not it is a declared general insurer); or (b) a liquidator (including a provisional liquidator) appointed in connection with the winding up, or proposed winding up, of a general insurer; require the general insurer or liquidator to give a specified person specified information relevant to one or more of the actions described in subsection (4) in a specified way within a reasonable specified time for the person to use in taking one or more of those actions. (2) The person specified in the requirement must be one of the following: (a) APRA; (b) an APRA member whose duties relate to an action described in subsection (4); (c) an APRA staff member whose duties relate to an action described in subsection (4); (d) a person to whom APRA has delegated a power or function under this Part that relates to an action described in subsection (4); (e) a person who is an officer or employee of a person described in paragraph (d) and whose duties relate to an action described in subsection (4). (3) The information specified in the requirement may be or include personal information. This does not limit the information that may be specified in the requirement. (4) The actions are as follows: (a) identifying a person who may have an entitlement under Division 3; (b) determining whether a person has an entitlement under Division 3 (including making a determination under one or both of sections 62ZZI and 62ZZJ); (c) determining the amount of an entitlement under Division 3; (d) meeting an entitlement under Division 3; (e) assessing whether and how information could be provided by a general insurer (or a liquidator of the general insurer, if one is appointed) to enable the actions described in paragraphs (a), (b), (c) and (d) to be taken if the general insurer were to become a declared general insurer. 62ZZQ Enforcing requirement to give information Requirement made of general insurer—civil penalty (1) A general insurer must comply with a requirement made of it under section 62ZZO or subsection 62ZZP(1). Civil penalty: 10,000 penalty units. Requirement made of general insurer—offence (2) A general insurer commits an offence if: (a) it does, or fails to do, an act; and (b) the doing of the act, or the failure to do the act, results in a contravention of a requirement made of the general insurer under section 62ZZO or subsection 62ZZP(1). Penalty: 200 penalty units. (3) An offence against subsection (2) is an indictable offence. Note: Section 4K (Continuing and multiple offences) of the Crimes Act 1914 applies to an offence against subsection (2), so a general insurer commits an offence for each day it does not comply with a requirement under subsection 62ZZP(1) (to give information within a particular time). Requirement made of general insurer—offence by officer (4) An officer (as defined in section 9 of the Corporations Act 2001) of a general insurer commits an offence if: (a) the officer fails to take reasonable steps to ensure that the general insurer complies with a requirement made of it under section 62ZZO or subsection 62ZZP(1); and (b) the officer's duties include ensuring that the general insurer complies with the requirement. Penalty: 50 penalty units. (5) Subsection (4) does not apply to an officer who is a liquidator (including a provisional liquidator) of the general insurer. Note: A defendant bears an evidential burden in relation to the matter in subsection (5): see subsection 13.3(3) of the Criminal Code. (6) If an officer of a general insurer fails to take reasonable steps to ensure that the general insurer complies with a requirement made of it under subsection 62ZZP(1) in circumstances that give rise to the officer committing an offence against subsection (4) of this section, the officer commits an offence against that subsection in respect of: (a) the first day on which the offence is committed; and (b) each subsequent day (if any) on which the circumstances that gave rise to the officer committing the offence continue (including the day of conviction for any such offence or any later day). Note: This subsection does not affect the application of section 4K of the Crimes Act 1914 to other offences against this Act (including subsection (2)) or the regulations. Liquidator to comply with requirement made of liquidator (7) A liquidator (including a provisional liquidator) must comply with a requirement made of the liquidator under section 62ZZO or subsection 62ZZP(1). Note: Action may be taken under the Corporations Act 2001 against a liquidator who does not comply with such a requirement. 62ZZR Obtaining further information from claimant or applicant (1) If section 62ZZI or 62ZZJ requires a determination to be made because of the making of a claim or application but there is insufficient information to make the determination: (a) APRA may request the claimant or applicant to give a specified person, in a specified way within a reasonable specified time, specified information relevant to the making of the determination, for the person to use in making the determination; and (b) the determination need not be made until after the information is given as requested. (2) The person specified in the request must be one of the following: (a) APRA; (b) an APRA member whose duties relate to the making of the determination; (c) an APRA staff member whose duties relate to the making of the determination; (d) a person to whom APRA has delegated the function of making the determination; (e) a person who is an officer or employee of a person described in paragraph (d) and whose duties relate to the function of making the determination. (3) The information specified in the request may be or include personal information. This does not limit the information that may be specified in the request. 62ZZS Recovery of overpayments The regulations may make provision for and in relation to the recovery by APRA of the excess of an amount paid to, or applied for the benefit of, a person purportedly to meet an entitlement of the person under Division 3 over the person's entitlement (if any) under that Division. 62ZZT APRA may delegate functions and powers under this Part (1) APRA may, by writing under its seal, delegate any or all of APRA's functions and powers under this Part to a person. (2) In performing or exercising functions or powers delegated under subsection (1), the delegate must comply with any directions given by APRA. (3) This section does not limit section 15 of the Australian Prudential Regulation Authority Act 1998. Note: Section 15 of the Australian Prudential Regulation Authority Act 1998: (a) makes the agreement of the Chair of ASIC a condition for a delegation to an ASIC member or an ASIC staff member; and (b) makes the agreement of the Governor of the Reserve Bank a condition for a delegation to the Governor or Deputy Governor of the Reserve Bank or to an officer of the Reserve Bank Service. 62ZZU APRA's costs of administration (1) The costs incurred by APRA in relation to the exercise of its powers and the performance of its functions under this Part (whether by APRA or by a delegate) relating to a declared general insurer are a debt due by the declared general insurer to APRA. (2) The debt is admissible to proof against the declared general insurer in the winding up of the general insurer. (3) The debt has the same priority in the winding up of the declared general insurer as a claim in respect of a policy issued by the insurer. (4) Subsection (1) does not apply to the amounts of entitlements under Division 3. Note: APRA may be able to recover those amounts through the rights it acquires under section 62ZZL from the person. Division 5—Exceptions to Part IV of the Trade Practices Act 1974 62ZZV Excep