{"id":"building-rbi-and-fidelity-fund-schemes-regulations-2012","name":"BUILDING (RBI AND FIDELITY FUND SCHEMES) REGULATIONS 2012","slug":"building-rbi-and-fidelity-fund-schemes-regulations-2012","collection":"regulation","jurisdiction":"nt","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":174341,"registerId":"nt-building-rbi-and-fidelity-fund-schemes-regulations-2012-current","compilationNumber":null,"startDate":"2026-04-05","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"5","sectionType":"section","heading":"Residential building work and residential buildings","content":"5 Residential building work and residential buildings\n(1) For section 54AB(1) of the Act, this regulation prescribes the\nbuilding work that must be covered by a policy or certificate\n(residential building work).\n(2) Residential building work is building work, of at least $25 000 in\nvalue, in connection with the construction of a residential building.\n(3) A residential building is any of the following:\n(a) a Class 1a building or prescribed Class 2 building (each of\nwhich is a relevant building);\n(b) a Class 10 building attached to a relevant building if the\nClass 10 building is constructed at the same time as the\nrelevant building is constructed;\n\nPart 1.2 Interpretation\nDivision 2 Important concepts\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 5\n(c) a Class 10 building that is a retaining wall (whenever\nconstructed) that is not attached to a relevant building but on\nwhich the integrity of the relevant building depends.\nExamples of Class 10 buildings for subregulation (3)(b)\nA garage, retaining wall or verandah.\n(4) Without limiting subregulation (2), the following building work is\nresidential building work:\n(a) work in connection with an extension of a relevant building;\n(b) work in connection with an extension of a dwelling in a\nprescribed Class 2 building;\n(c) work, to be carried out under the same contract, in connection\nwith both:\n(i) an extension mentioned in paragraph (a) or (b); and\n(ii) a renovation of the same relevant building or dwelling.\n(5) However, residential building work does not include work in\nconnection with:\n(a) the construction of a residential building that is entirely or\nsubstantially prefabricated and is designed to be transported\nfrom:\n(i) the site of assembly; or\n(ii) any subsequent site on which the building is located; or\n(b) renovations or alterations to an existing relevant building that\ndo not increase the floor area of the building, other than\nrenovations mentioned in subregulation (4)(c)(ii).\nExamples of renovations for subregulation (5)(b)\nThe re-cladding of roofs or walls, replacement of windows, construction of new\nexternal openings and enlargement or filling in of existing external openings.\n(6) A reference in this regulation to a residential building of a particular\nClass is a reference to a building of that Class as specified under\nthe classification of buildings in the Building Code, as defined in\nregulation 2(1) of the Building Regulations 1993.\n\nPart 1.2 Interpretation\nDivision 2 Important concepts\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 6\n","sortOrder":0},{"sectionNumber":"6","sectionType":"section","heading":"Non-structural defects and structural defects","content":"6 Non-structural defects and structural defects\n(1) A non-structural defect, in a residential building, is a defect in a\nnon-structural element of the building as a result of defective\nresidential building work.\n(2) A structural defect, in a residential building:\n(a) is a defect in a structural element of the building as a result of\ndefective residential building work; or\n(b) is a defect, as a result of defective residential building work,\nthat is reasonably likely to cause a defect in a structural\nelement of the building.\nExample for subregulation (2)(b)\nA waterproof membrane attached to a wall or floor of a bathroom.\n(3) In this regulation:\nnon-structural element, of a residential building, means a\ncomponent of the building that is not a structural element.\nstructural element, of a residential building, means:\n(a) a load-bearing component of the building (whether internal or\nexternal) that is essential to the stability of the building or part\nof the building; or\n(b) a component (including weatherproofing) forming part of the\nexternal walls or roof of the building.\nExamples for paragraph (a)\nA foundation, floor, wall, roof, column or beam.\n","sortOrder":1},{"sectionNumber":"7","sectionType":"section","heading":"Cover period under policy or certificate","content":"7 Cover period under policy or certificate\n(1) This regulation prescribes the period for which a policy or certificate\nmust provide cover for losses incurred as specified in the policy or\ncertificate (the cover period).\n(2) The cover period for the non-completion of guaranteed work under\na contract is the same as the relevant effective period under\nregulation 7(2) of the Building Dispute Resolution Regulations.\n(3) The cover period for defective guaranteed work is the total of the\nfollowing 2 periods:\n(a) the relevant construction period mentioned in regulation 7(4)\nand (5) of the Building Dispute Resolution Regulations;\n\n","sortOrder":2},{"sectionNumber":"Part 1","sectionType":"part","heading":"2 Interpretation","content":"Part 1.2 Interpretation\nDivision 2 Important concepts\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 7\n(b) the relevant defect period mentioned in regulation 7(6) of\nthose Regulations.\n(4) In this regulation:\nBuilding Dispute Resolution Regulations means the Building\n(Resolution of Residential Building Work Disputes)\nRegulations 2012.\n","sortOrder":3},{"sectionNumber":"8","sectionType":"section","heading":"Relevant circumstances for making claim under policy or","content":"8 Relevant circumstances for making claim under policy or\ncertificate\n(1) The relevant circumstances that entitle a beneficiary to make a\nclaim for financial loss incurred in relation to guaranteed work are\nas follows:\n(a) under a policy – the failure or contravention of the builder\nmentioned in section 54C(a) of the Act and the occurrence of\nan event mentioned in section 54C(b) of the Act;\n(b) under a certificate – the failure or contravention of the builder\nmentioned in section 54D(2)(a) of the Act and the occurrence\nof an event mentioned in section 54D(2)(b) of the Act.\n(2) For sections 54C(b)(i) and 54D(2)(b)(i) of the Act:\n(a) a builder is taken to have disappeared if the builder cannot be\nlocated after all reasonable inquiries have been made into the\nbuilder's whereabouts; and\n(b) a builder is taken to be bankrupt if the builder has:\n(i) applied to take the benefit of a law for the relief of\nbankrupt or insolvent debtors; or\n(ii) compounded with creditors or made an assignment of\nthe builder's remuneration for their benefit; and\n(c) a builder has become insolvent if the builder is unable to pay\nall the builder's debts as and when they become due and\npayable.\n(3) For sections 54C(b)(ii) and 54D(2)(b)(ii) of the Act, the reason for\ncessation of the builder's registration is that it has been suspended\nor cancelled:\n(a) by the Practitioners Board under Part 3, Division 3B or 3C of\nthe Act; or\n\nChapter 2 Authorised RBI policies\nPart 2.1 Matters to be included in policy\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 8\n(b) by an order of the Local Court under Part 3, Division 4 of the\nAct.\n","sortOrder":4},{"sectionNumber":"9","sectionType":"section","heading":"Beneficiary under policy or certificate","content":"9 Beneficiary under policy or certificate\n(1) Subject to this regulation, a beneficiary entitled to be indemnified\nunder a policy, or to be paid an amount under a certificate, must be\na current owner of the land or building described in the policy or\ncertificate.\n(2) A trustee of a trust under which a builder in relation to guaranteed\nwork may benefit from the cover given by a policy or certificate\nissued for the work cannot be a beneficiary under the policy or\ncertificate.\n(3) Defence Housing Australia cannot be a beneficiary under a policy\nor certificate in relation to a claim for non-completion of the\nguaranteed work specified in the policy or certificate.\nChapter 2 Authorised RBI policies\nPart 2.1 Matters to be included in policy\n","sortOrder":5},{"sectionNumber":"10","sectionType":"section","heading":"Provisions of policy generally","content":"10 Provisions of policy generally\n(1) This Part prescribes matters required or permitted to be included in\nan authorised RBI policy.\n(2) This Part does not limit the provisions that may be included in an\nauthorised RBI policy if the provisions do not contravene, and are\nconsistent with, the Act and these Regulations.\n","sortOrder":6},{"sectionNumber":"11","sectionType":"section","heading":"Declared consumer protection area","content":"11 Declared consumer protection area\nThe policy must specify that it applies only to residential building\nwork in a declared consumer protection area.\n","sortOrder":7},{"sectionNumber":"12","sectionType":"section","heading":"Guaranteed work","content":"12 Guaranteed work\n(1) The policy must describe the particular residential building work,\nprescribed by regulation 5, to which the policy applies (the\nguaranteed work).\n(2) The policy must also include a description of the land or residential\nbuilding for which, or in connection with which, the guaranteed work\nis to be carried out.\n\nChapter 2 Authorised RBI policies\nPart 2.1 Matters to be included in policy\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 9\n","sortOrder":8},{"sectionNumber":"13","sectionType":"section","heading":"Relevant circumstances giving right entitlement to indemnity","content":"13 Relevant circumstances giving right entitlement to indemnity\n(1) The policy must specify that the beneficiary is entitled to be\nindemnified under the policy only if the relevant circumstances have\noccurred in relation to the guaranteed work.\n(2) For regulation 8(2)(a), the policy may specify that the insurer may\nmake reasonable inquiries about the builder's whereabouts even if\nthe beneficiary has already done so.\n","sortOrder":9},{"sectionNumber":"14","sectionType":"section","heading":"Financial loss to be covered by policy","content":"14 Financial loss to be covered by policy\n(1) The policy must indemnify the beneficiary against financial loss\nincurred because of defective guaranteed work (including defective\ndesign work under a contract) or the non-completion of guaranteed\nwork.\n(2) The policy must cover financial loss incurred in relation to any of the\nfollowing:\n(a) the costs of removal, and of alternative accommodation and\nstorage for a period not exceeding 60 calendar days,\nreasonably incurred as a result of the defective guaranteed\nwork or non-completion of the work;\n(b) subject to regulation 15(1)(a) – the loss of a deposit or\nprogress payment under a contract relating to the work;\n(c) legal or other reasonable costs incurred in seeking to have a\nbuilder rectify or complete the work;\n(d) an increase in costs for rectification of the work caused by the\npassage of time;\n(e) any acts or omissions of persons engaged as contractors by\nthe builder in relation to the work;\n(f) any additional reasonable costs associated with engaging\nanother builder to rectify or complete the work (excluding the\ncosts associated with the work carried out by that builder).\n","sortOrder":10},{"sectionNumber":"15","sectionType":"section","heading":"Financial loss not required to be covered by policy","content":"15 Financial loss not required to be covered by policy\n(1) The policy need not cover financial loss incurred in relation to any\nof the following:\n(a) the payment of a deposit or progress payment above the\namount specified in the contract relating to the guaranteed\nwork;\n\nChapter 2 Authorised RBI policies\nPart 2.1 Matters to be included in policy\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 10\n(b) if the beneficiary is a subsequent purchaser of the residential\nbuilding – defects that are readily apparent at the time of\npurchase;\n(c) damage that could reasonably be expected to result from fair\nwear and tear or from the current owner of the building failing\nto maintain the work;\n(d) damage caused by a person or made worse by the failure of\nthe current owner to take reasonable and timely action to\nminimise the damage;\n(e) legal liability resulting from any event that is not expressly\ninsured under the policy;\n(f) a defect that is due to residential building work (including\ndesign work) or materials not specified in the contract relating\nto the guaranteed work (for example, materials supplied by the\ncontracting owner);\n(g) a person's injury or impairment (including injury or impairment\nof the person's mental condition), death, disease or illness;\n(h) loss of rent, income, value or opportunity;\n(i) inconvenience or distress;\n(j) the unreasonable refusal of the beneficiary to allow access to\nthe insurer, or the insurer's agent, for the purpose of\nassessing the beneficiary's claim;\n(k) the failure of the beneficiary to maintain adequate protection\nagainst pests;\n(l) the malfunction of any mechanical or electrical equipment if\nthe insurer can prove the malfunction was not attributable to\nthe workmanship of, or installation by, the builder;\n(m) fraud or dishonest conduct of any kind by the builder;\n(n) an appliance;\n(o) asbestos contamination or removal;\n(p) war, civil unrest, a nuclear event or an act of nature.\nNotes for subregulation (1)(m)\n1 Section 54CH of the Act creates offences relating to a builder giving the\nauthorised insurer misleading information.\n\nChapter 2 Authorised RBI policies\nPart 2.1 Matters to be included in policy\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 11\n2 Section 54CI of the Act prevents an insurer from avoiding liability under a\npolicy if the builder has given the insurer misleading information.\n(2) In addition, the policy need not provide for the payment of an\namount in damages or liquidated damages for delay in completing\nthe guaranteed work.\n(3) Despite this regulation, a provision of the policy does not\ncontravene, and is not inconsistent with, the Act or these\nRegulations if the provision provides greater cover than is required\nby regulation 14.\n","sortOrder":11},{"sectionNumber":"16","sectionType":"section","heading":"Common property of prescribed Class 2 building","content":"16 Common property of prescribed Class 2 building\nA policy issued for guaranteed work in connection with a dwelling in\na prescribed Class 2 building must provide that, in relation to\ndefective guaranteed work carried out on the common property of\nthe building:\n(a) a claim may be made on behalf of all the beneficiaries under\npolicies issued for the dwellings (who are the current owners\nof the dwellings in the building); and\n(b) any payment made by the insurer to rectify the defective\nguaranteed work will reduce the entitlement to indemnity for\nfinancial loss in equal proportions for the dwellings.\nExample for regulation 16\nIf there are 10 dwellings in the prescribed Class 2 building and the rectification\nwork amounts to $40 000, the entitlement under the policy in relation to each\ndwelling will be reduced by $4 000.\n","sortOrder":12},{"sectionNumber":"17","sectionType":"section","heading":"Amount of cover and related matters","content":"17 Amount of cover and related matters\nIn relation to the amount of cover to be provided for financial loss,\nthe policy must:\n(a) provide a minimum amount of cover of $200 000 in total for\nthe guaranteed work; and\n(b) provide that if the total contracted price for the guaranteed\nwork is varied by an increase or decrease of more than 5%,\nthe builder must apply to the insurer for a reassessment of the\namount of cover; and\n(c) limit the cover for non-completion of the guaranteed work to\nan amount not less than 20% of the total contracted price for\nthe work; and\n\nChapter 2 Authorised RBI policies\nPart 2.2 Claim under policy\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 12\n(d) provide for cover for defective guaranteed work up to the\nmaximum amount payable under the policy less any amount\nthat may have been paid for non-completion of the guaranteed\nwork.\n","sortOrder":13},{"sectionNumber":"18","sectionType":"section","heading":"Excess","content":"18 Excess\n(1) The policy may specify an amount for which the insurer is not liable\nunder the policy (the excess).\n(2) The excess specified in the policy must not exceed $500 in total for\nthe guaranteed work.\nPart 2.2 Claim under policy\n","sortOrder":14},{"sectionNumber":"19","sectionType":"section","heading":"Time for making claim","content":"19 Time for making claim\n(1) A beneficiary who makes a claim under a policy in relation to the\nnon-completion of guaranteed work must give the insurer a written\nclaim within the cover period relevant to the claim.\n(2) A beneficiary who makes a claim under a policy in relation to\ndefective guaranteed work must give the insurer a written claim:\n(a) within the cover period relevant to the claim; and\n(b) within 90 days after the later of the following:\n(i) the day on which the beneficiary became aware, or\ncould reasonably be expected to have become aware, of\nthe defective guaranteed work;\n(ii) the day on which an event mentioned in section 54C(b)\nof the Act occurred in relation to the builder responsible\nfor the defective guaranteed work.\n(3) For subregulation (2), if the later of the days mentioned in\nsubregulation (2)(b) falls within 90 days before the end of the cover\nperiod, the cover period is extended for 90 days after that day.\n","sortOrder":15},{"sectionNumber":"20","sectionType":"section","heading":"Information and access to be given by claimant","content":"20 Information and access to be given by claimant\n(1) A claimant under a policy must give the insurer all information,\ndocuments and assistance requested by the insurer to enable a\nproper consideration of the claim.\n\nChapter 2 Authorised RBI policies\n","sortOrder":16},{"sectionNumber":"Part 2","sectionType":"part","heading":"2 Claim under policy","content":"Part 2.2 Claim under policy\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 13\n(2) The claimant must also allow the following persons access to the\nresidential building or land on which the guaranteed work was\ncarried out (or, under a contract, was to have been carried out):\n(a) the insurer or the insurer's agent;\n(b) a person engaged by the insurer to inspect the work, building\nor land;\n(c) a builder nominated by the insurer to rectify or complete the\nguaranteed work.\n(3) The insurer is entitled to reject the claim if the claimant fails to\ncomply with subregulation (1) or (2).\n","sortOrder":17},{"sectionNumber":"21","sectionType":"section","heading":"Insurer's rights to assess claim and payment","content":"21 Insurer's rights to assess claim and payment\n(1) The insurer must assess a claim under a policy and decide whether\nthe claimant is a beneficiary.\n(2) If the claimant is a beneficiary, the insurer must decide the\nreasonable amount payable to the beneficiary.\n(3) The insurer is required to pay to the beneficiary only the reasonable\namount as assessed, and is not required to pay the maximum\namount allowable under the policy.\n","sortOrder":18},{"sectionNumber":"22","sectionType":"section","heading":"Claim for defective guaranteed work and rectification","content":"22 Claim for defective guaranteed work and rectification\n(1) For a claim relating to defective guaranteed work, the insurer may:\n(a) arrange to have the work rectified; or\n(b) pay the costs of the rectification to the beneficiary.\n(2) However, if the beneficiary has the defective guaranteed work\nrectified before making the claim, the insurer is entitled to reject the\nclaim.\n(3) If the insurer pays the costs of rectification to the beneficiary, the\ninsurer is not liable to indemnify any other person for financial loss\nincurred because of:\n(a) the same defective guaranteed work; or\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.1 Application for approval of fidelity fund scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 14\n(b) any other defective work arising directly or indirectly from that\ndefective guaranteed work.\nExample for subregulation (3)\nA successor in title to a contracting owner is not entitled to payment for defective\nguaranteed work if the contracting owner has already received payment to cover\nlosses incurred in relation to that work.\n","sortOrder":19},{"sectionNumber":"23","sectionType":"section","heading":"Insurer may recover from builder","content":"23 Insurer may recover from builder\nAn insurer who makes a payment to a beneficiary may recover the\namount of the payment as a debt from the builder who carried out\nthe guaranteed work or, under a contract, agreed to carry out the\nwork.\n","sortOrder":20},{"sectionNumber":"24","sectionType":"section","heading":"Annual statement about claims","content":"24 Annual statement about claims\nFor section 54CE(1) of the Act, the period within which an insurer\nmust give the Minister a written statement about claims on policies\ndealt with by the insurer during a financial year is 90 days after the\nend of the financial year.\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.1 Application for approval of fidelity fund\nscheme\n","sortOrder":21},{"sectionNumber":"25","sectionType":"section","heading":"Form of application","content":"25 Form of application\nAn application for approval of a fidelity fund scheme must:\n(a) be in a form that is acceptable to the Minister; and\n(b) for section 54DA(2)(c) of the Act, include the information\nrequired by regulation 26 and the approved form.\n","sortOrder":22},{"sectionNumber":"26","sectionType":"section","heading":"Required information for application","content":"26 Required information for application\n(1) In relation to the trustees of the scheme, the application must\ninclude:\n(a) the names and contact details of each trustee; and\n(b) information to satisfy the Minister that each trustee meets the\neligibility criteria; and\n(c) an address in the Territory for service of documents on the\ntrustees.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.1 Application for approval of fidelity fund scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 15\n(2) In relation to the persons to be appointed as the auditor and the\nactuary for the scheme (if the scheme and those appointments are\napproved), the application must include an application mentioned in\nregulation 54.\n(3) The application must also include:\n(a) a preliminary audit certificate that is prepared:\n(i) by the person to be appointed as the auditor for the\nscheme; and\n(ii) as if it were an audit certificate for an approved scheme;\nand\n(b) a preliminary capital management plan, for the Minister's\napproval, that is prepared by the trustees as if it were a capital\nmanagement plan for an approved scheme;\n(c) a preliminary contributions certificate that is prepared:\n(i) by the person to be appointed as the actuary for the\nscheme; and\n(ii) as if it were a contributions certificate for an approved\nscheme; and\n(d) a contingency plan and a compliance plan that, if the scheme\nis approved, will take effect immediately for the scheme; and\n(e) any other information necessary to satisfy the Minister that the\nscheme complies with the approval criteria.\n","sortOrder":23},{"sectionNumber":"27","sectionType":"section","heading":"Certification of trust deed","content":"27 Certification of trust deed\nFor section 54DA(2)(b) of the Act, one of the trustees of a scheme\napplying for approval must:\n(a) certify that the copy of the trust deed accompanying the\napplication is a true copy of the original executed trust deed;\nand\n(b) sign and date the certification.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 2 Trustees of scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 16\nPart 3.2 Approval criteria\nDivision 1 Preliminary matters\n","sortOrder":24},{"sectionNumber":"28","sectionType":"section","heading":"Purpose of Part","content":"28 Purpose of Part\nFor section 54DA(3) and (4) of the Act, this Part prescribes the\napproval criteria with which a fidelity fund scheme must comply to\nbe an approved scheme.\n","sortOrder":25},{"sectionNumber":"29","sectionType":"section","heading":"Contents of trust deed generally","content":"29 Contents of trust deed generally\n(1) The scheme's trust deed may include provisions dealing with\nmatters that are not covered by the approval criteria.\n(2) However, those provisions must not contravene or be inconsistent\nwith the Act or these Regulations.\nDivision 2 Trustees of scheme\n","sortOrder":26},{"sectionNumber":"30","sectionType":"section","heading":"Required number of trustees","content":"30 Required number of trustees\nUnless the Minister approves otherwise, the scheme must have at\nleast 5 trustees.\n","sortOrder":27},{"sectionNumber":"31","sectionType":"section","heading":"Eligibility criteria for appointment as trustee","content":"31 Eligibility criteria for appointment as trustee\n(1) The scheme's trust deed must include provisions about the\neligibility criteria for the appointment of a person as a trustee of the\nscheme as specified by this regulation.\n(2) To be eligible for appointment as a trustee of the scheme, a person\nmust:\n(a) be an individual who is an Australian citizen; and\n(b) have the competence, knowledge, skills, experience,\nqualifications and integrity to carry out the duties as trustee\nthat would be expected of an ordinary prudent person carrying\nout those duties; and\n(c) maintain professional indemnity insurance in relation to the\nposition as a trustee that is prudent and reasonable in the\ncircumstances and that covers claims amounting to the lesser\nof the following:\n(i) $5 000 000;\n(ii) the total of the value of all the assets of the scheme.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 2 Trustees of scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 17\n(3) A person is not eligible for appointment as a trustee of the scheme\nif the person:\n(a) has an actual or potential conflict of interest that is likely to\ninfluence the person's ability to carry out the duties of a\ntrustee with appropriate probity and competence; or\n(b) has been an insolvent under administration as defined in\nsection 9 of the Corporations Act 2001; or\n(c) is under investigation, or has been disciplined or removed\nfrom membership of a professional body relevant to the duties\nas a trustee; or\n(d) has been refused the right, or restricted in the right, to carry on\nany trade, business or profession relevant to the duties as a\ntrustee; or\n(e) has been the subject of an adverse finding in relation to\ndishonest conduct in any judgment in an administrative or civil\nproceeding in any jurisdiction of Australia or in a foreign\ncountry; or\n(f) has been convicted of an offence:\n(i) against the Act, the Corporations Act 2001, the\nInsurance Act 1973 (Cth), or the Financial Sector\n(Collection of Data) Act 2001 (Cth); or\n(ii) against a law of any jurisdiction of Australia, or a foreign\ncountry, involving dishonest conduct.\n","sortOrder":28},{"sectionNumber":"31A","sectionType":"section","heading":"Application for approval of appointment","content":"31A Application for approval of appointment\n(1) An application under section 54DBA(1) of the Act for approval of\nthe appointment of a trustee of an approved scheme must include:\n(a) information to satisfy the Minister that the person meets the\neligibility criteria; and\n(b) the terms of appointment.\n(2) The Minister may, by written notice, request the trustees of the\nscheme to provide additional information or documents to enable\nthe Minister to make a decision about the approval.\n(3) If, under section 54DBA(2)(b) of the Act, the Minister gives the\ntrustees of the scheme a notice refusing to approve the\nappointment, the notice must specify the way in which the person\nfails to meet the eligibility criteria.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 2 Trustees of scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 18\n","sortOrder":29},{"sectionNumber":"31B","sectionType":"section","heading":"Revocation of approval of appointment","content":"31B Revocation of approval of appointment\n(1) The Minister may, by written notice, revoke the approval of a\nperson's appointment as a trustee for an approved scheme if\nsatisfied the person has contravened:\n(a) the Act, a regulation or another law in force in the Territory in\nrelation to the scheme; or\n(b) the prudential standards.\n(2) The revocation takes effect immediately.\n(3) The Minister must give the notice of revocation to the person whose\napproval is revoked and a copy of the notice to all other trustees of\nthe scheme.\n(4) A notice under subregulation (3) must specify the reasons for the\nrevocation.\n","sortOrder":30},{"sectionNumber":"31C","sectionType":"section","heading":"Ceasing to be trustee","content":"31C Ceasing to be trustee\n(1) A person ceases to be a trustee of an approved scheme if:\n(a) the approval of the person's appointment is revoked under\nregulation 31B; or\n(b) the person resigns the appointment by written notice to the\ntrustees of the scheme.\n(2) Within 14 days after the day on which a person ceases to be a\ntrustee as mentioned in subregulation (1)(b), the trustees must give\nthe Minister written notice of the cessation specifying:\n(a) the date of cessation; and\n(b) the reasons for, or circumstances of, the cessation.\n","sortOrder":31},{"sectionNumber":"32","sectionType":"section","heading":"Exercise and performance of powers and duties of trustees","content":"32 Exercise and performance of powers and duties of trustees\n(1) The scheme's trust deed must include provisions about the exercise\nof the trustees' powers, and the performance of the trustees' duties,\nto the effect that each trustee agrees:\n(a) to act honestly in all matters concerning the scheme; and\n(b) to exercise, in relation to all matters affecting the scheme, the\nsame degree of care, skill and diligence as an ordinary\nprudent person would exercise in dealing with property of\nanother for whom the person felt morally bound to provide;\nand\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 2 Trustees of scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 19\n(c) to ensure that the trustees' powers and duties are exercised or\nperformed in the best interests of the beneficiaries of the\nscheme and, if there is a conflict between the interests of the\nbeneficiaries and the trustees' own interests, to give priority to\nthe interests of the beneficiaries; and\n(d) not to make use of information acquired as a trustee in order\nto:\n(i) gain an improper advantage for the trustee or another\nperson; or\n(ii) cause detriment to a beneficiary of the scheme; and\n(e) to ensure that the money and other assets of the scheme are:\n(i) clearly identified as property of the scheme; and\n(ii) held separately from the property of the trustee and the\nother trustees; and\n(f) not to enter into an agreement, or do anything or omit to do\nsomething, that would prevent the trustee or the other trustees\nfrom, or hinder the trustee or the other trustees in, properly\ncarrying out their duties; and\n(fa) not to engage in any other activity that may bring the trustee\nor the scheme into disrepute; and\n(g) as soon as practicable after the trustee becomes aware of any\nbreach of the Act or these Regulations that has had, or is\nlikely to have, a materially adverse effect on the interests of a\nbeneficiary, to report the breach to the Minister; and\n(h) to perform any other duty, not inconsistent with the Act or\nthese Regulations, that is imposed on the trustee by the trust\ndeed.\n(2) The trust deed may include a provision to the effect that the\nagreement mentioned in subregulation (1)(f) does not prevent the\ntrustees from engaging or authorising a person to do acts or things\non behalf of the trustees.\n(3) The trust deed may also provide for a trustee to be paid a fee for\nperforming his or her functions.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 2A Management of scheme\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 20\n","sortOrder":32},{"sectionNumber":"Div 2A","sectionType":"division","heading":"Management of scheme","content":"Division 2A Management of scheme\n","sortOrder":33},{"sectionNumber":"33","sectionType":"section","heading":"Management generally","content":"33 Management generally\n(1) The scheme's trust deed must require the trustees to manage the\nscheme in accordance with:\n(a) the trust deed; and\n(b) the prudential standards; and\n(c) any requirements the Minister specifies by Gazette notice.\n(2) The trust deed must also require the trustees to ensure the scheme\nhas available, at all times, adequate financial, technological and\nhuman resources to enable the trustees to perform their duties.\n","sortOrder":34},{"sectionNumber":"34","sectionType":"section","heading":"Financial management","content":"34 Financial management\n(1) The scheme's trust deed must:\n(a) specify the powers of the trustees in relation to dealing with\nthe scheme's assets; and\n(b) require the trustees to:\n(i) restrict the investment of the scheme's assets to the\ninvestments permitted by the prudential standards; and\n(ii) ensure that all payments out of the scheme's assets are\nmade in accordance with the Act, these Regulations and\nthe trust deed.\n(2) If the trust deed gives the trustees a right to recover out of the\nscheme's assets liabilities or expenses incurred in relation to the\nperformance of their duties, or to be indemnified out of the\nscheme's assets for those liabilities or expenses, the trust deed\nmust specify that:\n(a) the right or indemnity is to be available only in relation to the\nproper performance of the trustees' duties; and\n(b) any other agreement or arrangement has no effect to the\nextent that it purports to confer such a right or indemnity.\n(3) If the trustees are to have any power to borrow money or raise\nmoney for the purposes of the scheme, the trust deed must specify\nthat:\n(a) the exercise of the power must be consistent with the\nrestrictions on borrowing mentioned in regulation 80(5); and\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 3 Fidelity certificates for residential building work\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 21\n(b) any other agreement or arrangement has no effect to the\nextent it purports to confer such a power.\n","sortOrder":35},{"sectionNumber":"35","sectionType":"section","heading":"Contributions from builders","content":"35 Contributions from builders\n(1) The scheme's trust deed must include a provision that allows the\ntrustees to require builders to whom certificates are issued to make\na contribution to the scheme for the issuing of certificates.\n(2) The trust deed must require the trustees to:\n(a) determine the amount of a contribution to be paid to the\nscheme for the issuing of a certificate; and\n(b) consider the prudential standards and the advice of the\nactuary for the fidelity fund scheme before determining the\namount.\nDivision 3 Fidelity certificates for residential building work\n","sortOrder":36},{"sectionNumber":"36","sectionType":"section","heading":"Areas to which scheme applies","content":"36 Areas to which scheme applies\nThe scheme's trust deed must specify that the scheme applies only\nto residential building work in a declared consumer protection area.\n","sortOrder":37},{"sectionNumber":"37","sectionType":"section","heading":"When certificate may be issued","content":"37 When certificate may be issued\nThe scheme's trust deed must specify that the trustees may issue a\ncertificate to a builder:\n(a) only in relation to residential building work to be carried out by\nthe builder within a declared consumer protection area; and\n(b) only if the builder has paid the full contribution required by the\ntrustees under the trust deed as mentioned in regulation 35.\n","sortOrder":38},{"sectionNumber":"38","sectionType":"section","heading":"Application for certificate","content":"38 Application for certificate\nThe trust deed must include provisions requiring:\n(a) the trustees to assess each application for the issue of a\ncertificate; and\n(b) each application to be assessed in the same way, with no\ndiscrimination on the basis of an applicant's membership\nstatus with a building industry body.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 4 Claim under fidelity certificate\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 22\n","sortOrder":39},{"sectionNumber":"39","sectionType":"section","heading":"Contents of certificate","content":"39 Contents of certificate\nThe scheme's trust deed must require a certificate issued under the\nscheme:\n(a) to be in the approved form as mentioned in section 54D(1) of\nthe Act; and\n(b) to describe the particular residential building work, prescribed\nby regulation 5(1), to which the certificate applies (the\nguaranteed work); and\n(c) to describe the land or residential building in connection with\nwhich the guaranteed work is to be carried out; and\n(d) to specify the beneficiary under the certificate in accordance\nwith regulation 9; and\n(e) to specify the relevant circumstances that entitle a beneficiary\nto make a claim under the certificate; and\n(f) to specify the matters relevant to making a claim provided for\nin the trust deed under regulation 40(1)(b) to (d); and\n(g) to specify the financial loss covered by the certificate provided\nfor in the trust deed under regulation 45; and\n(h) to specify the amount a beneficiary may claim, which must not\nbe lower than the minimum amount provided for in the trust\ndeed under regulation 48; and\n(i) to specify that the following matters are in the discretion of the\ntrustees in relation to a claim made under the certificate:\n(i) whether the claimant is a beneficiary under the\ncertificate;\n(ii) if the claimant is a beneficiary – the amount of the\npayment to the beneficiary out of the assets of the\nscheme and the terms and conditions on which payment\nis to be made.\nDivision 4 Claim under fidelity certificate\n","sortOrder":40},{"sectionNumber":"40","sectionType":"section","heading":"Making claim","content":"40 Making claim\n(1) The scheme's trust deed must specify the following matters:\n(a) the way in which a beneficiary may make a claim under a\ncertificate;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 4 Claim under fidelity certificate\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 23\n(b) if a beneficiary makes a claim for the non-completion of\nguaranteed work – the claim must be made within the cover\nperiod relevant to the claim;\n(c) if a beneficiary makes a claim for defective guaranteed work –\nthe claim must be made:\n(i) within the cover period relevant to the claim; and\n(ii) within 90 days after the later of the following:\n(A) the day on which the beneficiary became aware, or\ncould reasonably be expected to have become\naware, of the defective guaranteed work;\n(B) the day on which an event mentioned in\nsection 54D(2)(b) of the Act occurred in relation to\nthe builder responsible for the defective guaranteed\nwork;\n(d) only the amount specified in a certificate can be claimed in\nrelation to the guaranteed work.\n(2) For subregulation (1)(c), if the later of the days mentioned in\nsubregulation (1)(c)(ii) falls within 90 days before the end of the\ncover period, the cover period is extended for 90 days after that\nday.\n","sortOrder":41},{"sectionNumber":"41","sectionType":"section","heading":"Dealing with claim","content":"41 Dealing with claim\n(1) The scheme's trust deed must specify the following matters:\n(a) subject to paragraphs (b) and (c) – the way in which a claim\nunder a certificate is to be dealt with by the trustees;\n(b) the trustees must consider a claim and decide whether or not\nthe trustees will make a payment from the assets of the\nscheme to the claimant;\n(c) if the trustees decide to make a payment to a beneficiary – the\ntrustees must decide:\n(i) the amount of the payment; and\n(ii) the terms and conditions on which the trustees will make\nthe payment.\n(2) The trust deed must specify that it is a condition of a payment made\nto a beneficiary that the trustees may take whatever action they\nconsider appropriate in the name of the beneficiary against the\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 4 Claim under fidelity certificate\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 24\nbuilder to recover from the builder any amount paid by the trustees\nto the beneficiary.\n(3) For regulation 8(2)(a), the trust deed may specify that the trustees\nmay make reasonable inquiries about the builder's whereabouts\neven if the beneficiary has already done so.\n(4) The trust deed must also specify that if more than one claim is\nmade under a certificate, the total amount that can be paid to all the\nbeneficiaries must not exceed the amount that is stated on the\ncertificate.\n","sortOrder":42},{"sectionNumber":"42","sectionType":"section","heading":"Information and access to be given by claimant","content":"42 Information and access to be given by claimant\nThe scheme's trust deed must specify the following:\n(a) a claimant is required to give the trustees all information,\ndocuments and assistance requested by the trustees to\nenable a proper consideration of the claim;\n(b) a claimant is required to allow the following persons access to\nthe residential building or land on which the guaranteed work\nwas carried out (or, under a contract, was to have been\ncarried out):\n(i) the trustees or the trustees' agent;\n(ii) a person engaged by the trustees to inspect the work,\nbuilding or land;\n(iii) a builder nominated by the trustees to rectify or complete\nthe work;\n(c) the trustees are entitled to reject a claim if the claimant fails to\ncomply with paragraph (a) or (b).\n","sortOrder":43},{"sectionNumber":"43","sectionType":"section","heading":"Claim for defective guaranteed work and rectification","content":"43 Claim for defective guaranteed work and rectification\n(1) The scheme's trust deed may include a provision to the effect that if\na beneficiary makes a claim relating to defective guaranteed work,\nthe trustees may:\n(a) arrange to have the work rectified; or\n(b) pay the costs of the rectification to the beneficiary.\n(2) The trust deed may also include a provision to the effect that if the\nbeneficiary has the defective guaranteed work rectified before\nmaking the claim, the trustees are entitled to reject the claim.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 5 Fidelity certificate and losses covered\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 25\n(3) If the trust deed includes a provision mentioned in subregulation (1)\nand the trustees pay the costs of rectification to a beneficiary, the\nscheme is not liable to pay an amount to any other person for\nfinancial loss incurred because of:\n(a) the same defective guaranteed work; or\n(b) any other defective work arising directly or indirectly from that\ndefective guaranteed work.\nExample for subregulation (3)\nA successor in title to a contracting owner is not entitled to payment for defective\nguaranteed work if the contracting owner has already received payment to cover\nlosses incurred in relation to that work.\n","sortOrder":44},{"sectionNumber":"44","sectionType":"section","heading":"Trustees may recover from builder","content":"44 Trustees may recover from builder\nThe scheme's trust deed may include a provision to the effect that if\nthe trustees make a payment to a beneficiary, the trustees may\nrecover the amount of the payment as a debt from the builder who\ncarried out the guaranteed work or, under a contract, agreed to\ncarry out the work.\nDivision 5 Fidelity certificate and losses covered\n","sortOrder":45},{"sectionNumber":"45","sectionType":"section","heading":"Financial loss to which certificate relates","content":"45 Financial loss to which certificate relates\n(1) The scheme's trust deed must require a certificate to apply in\nrelation to financial loss incurred because of defective guaranteed\nwork (including defective design work under a contract) or the\nnon-completion of guaranteed work.\n(2) The trust deed must require a certificate to specify that it covers\nfinancial loss incurred in relation to any of the following:\n(a) the costs of removal, and of alternative accommodation and\nstorage for a period not exceeding 60 calendar days,\nreasonably incurred as a result of the defective guaranteed\nwork or non-completion of the work;\n(b) subject to regulation 46(1)(a) – the loss of a deposit or\nprogress payment under a contract relating to the work;\n(c) legal or other reasonable costs incurred in seeking to have a\nbuilder rectify or complete the work;\n(d) an increase in costs for rectification of the work caused by the\npassage of time;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 5 Fidelity certificate and losses covered\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 26\n(e) any acts or omissions of persons engaged as contractors by\nthe builder in relation to the work;\n(f) any additional reasonable costs associated with engaging\nanother builder to rectify or complete the work (excluding the\ncosts associated with the work carried out by that builder).\n","sortOrder":46},{"sectionNumber":"46","sectionType":"section","heading":"Financial loss not required to be covered under certificate","content":"46 Financial loss not required to be covered under certificate\n(1) The scheme's trust deed need not require a certificate to cover\nfinancial loss incurred in relation to any of the following:\n(a) the payment of a deposit or progress payment above the\namount specified in the contract relating to the guaranteed\nwork;\n(b) if the beneficiary is a subsequent purchaser of the residential\nbuilding – defects that are readily apparent at the time of\npurchase;\n(c) damage that could reasonably be expected to result from fair\nwear and tear or from the current owner of the building failing\nto maintain the work;\n(d) damage caused by a person or made worse by the failure of\nthe current owner to take reasonable and timely action to\nminimise the damage;\n(e) legal liability resulting from any event that is not expressly\ninsured under the certificate;\n(f) a defect that is due to residential building work (including\ndesign work) or materials not specified in the contract relating\nto the guaranteed work (for example, materials supplied by the\ncontracting owner);\n(g) a person's injury or impairment (including injury or impairment\nof the person's mental condition), death, disease or illness;\n(h) loss of rent, income, value or opportunity;\n(i) inconvenience or distress;\n(j) the unreasonable refusal of the beneficiary to allow access to\nthe trustees, or the trustees' agent, for the purpose of\nassessing the beneficiary's claim;\n(k) the failure of the beneficiary to maintain adequate protection\nagainst pests;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 5 Fidelity certificate and losses covered\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 27\n(l) the malfunction of any mechanical or electrical equipment if\nthe trustees can prove the malfunction was not attributable to\nthe workmanship of, or installation by, the builder;\n(m) fraud or dishonest conduct of any kind by the builder;\n(n) an appliance;\n(o) asbestos contamination or removal;\n(p) war, civil unrest, a nuclear event or an act of nature.\nNotes for subregulation (1)(m)\n1 Regulation 67 creates offences relating to a builder giving the trustees\nmisleading information.\n2 Regulation 68 prevents the scheme from avoiding liability under a certificate if\nthe builder has given the trustees misleading information.\n(2) In addition, the trust deed need not provide for the payment of an\namount in damages or liquidated damages for delay in completing\nthe guaranteed work.\n(3) Despite this regulation, a provision of the trust deed does not\ncontravene, and is not inconsistent with, the Act or these\nRegulations if the provision provides greater cover than is required\nby regulation 45.\n","sortOrder":47},{"sectionNumber":"47","sectionType":"section","heading":"Common property of prescribed Class 2 building","content":"47 Common property of prescribed Class 2 building\nThe scheme's trust deed must require a certificate issued for\nguaranteed work in connection with a dwelling in a prescribed\nClass 2 building to specify that, in relation to any defective\nguaranteed work carried out on the common area of the building:\n(a) a claim may be made on behalf of all the beneficiaries (who\nare the current owners of the dwellings in the building); and\n(b) any payment made under the certificate to rectify the defective\nguaranteed work will reduce the beneficiary's cover under the\ncertificate in equal proportions for the dwellings.\nExample for regulation 47\nIf there are 10 dwellings in the prescribed Class 2 building and the rectification\nwork amounts to $40 000, the entitlement under the certificate in relation to each\ndwelling will be reduced by $4 000.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.2 Approval criteria\nDivision 6 Other matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 28\n","sortOrder":48},{"sectionNumber":"48","sectionType":"section","heading":"Amount of cover and related matters","content":"48 Amount of cover and related matters\nThe scheme's trust deed must require a certificate to:\n(a) provide a minimum amount of cover of $200 000 in total for\nthe guaranteed work; and\n(b) provide that if the total contracted price for the guaranteed\nwork is varied by an increase or decrease of more than 5%,\nthe builder must apply to the trustees for a reassessment of\nthe amount of cover; and\n(c) limit the cover for non-completion of the guaranteed work to\nan amount not less than 20% of the total contracted price for\nthe work; and\n(d) provide for cover for defective guaranteed work up to the\nmaximum amount payable under the certificate less any\namount that may have been paid for non-completion of the\nguaranteed work.\n","sortOrder":49},{"sectionNumber":"49","sectionType":"section","heading":"Excess","content":"49 Excess\n(1) The scheme's trust deed may specify an amount for which the\nscheme is not liable under a certificate (the excess).\n(2) The excess specified in the trust deed must not exceed $500 in\ntotal for the guaranteed work.\n","sortOrder":50},{"sectionNumber":"Div 6","sectionType":"division","heading":"Other matters","content":"Division 6 Other matters\n","sortOrder":51},{"sectionNumber":"50","sectionType":"section","heading":"Procedures for dealing with complaints","content":"50 Procedures for dealing with complaints\n(1) The scheme's trust deed must require the trustees to establish and\nmake available information about procedures for dealing with a\ncomplaint relating to the operation of the scheme.\n(2) Without limiting subregulation (1), the procedures may relate to a\ncomplaint about the assessment of a claim by the trustees.\n(3) The trust deed must prohibit the trustees from refusing to pay a\nbeneficiary under a certificate only because the builder to whom the\ncertificate was issued gave the trustees misleading information to\nobtain the certificate.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 1 Auditors and actuaries\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 29\n","sortOrder":52},{"sectionNumber":"51","sectionType":"section","heading":"Rights of consumer representative","content":"51 Rights of consumer representative\nThe trust deed must specify that if a consumer representative is\nappointed for the scheme under regulation 65, the representative\nhas the right:\n(a) to be present at each meeting of the trustees; and\n(b) to perform the duties of the role in accordance with any\nprovisions of the appointment.\n","sortOrder":53},{"sectionNumber":"52","sectionType":"section","heading":"Winding-up","content":"52 Winding-up\n(1) The scheme's trust deed must provide for the winding-up of the\nscheme.\n(2) The trust deed must specify that the scheme may be wound up only\nif the Minister has cancelled the approval of the scheme under\nregulation 62 or 63.\nPart 3.3 Approved schemes – general matters\nDivision 1 Auditors and actuaries\n","sortOrder":54},{"sectionNumber":"53","sectionType":"section","heading":"Eligibility criteria for appointment as auditor or actuary","content":"53 Eligibility criteria for appointment as auditor or actuary\n(1) For section 54E(3)(a) of the Act, this regulation specifies the\neligibility criteria for the appointment of a person as the auditor or\nactuary of an approved scheme.\n(2) A trustee of the approved scheme is not eligible for appointment as\nan auditor or actuary of the scheme.\n(3) A person is not eligible for appointment as both the auditor and\nactuary of an approved scheme.\n(4) To be eligible for appointment as the auditor or actuary of an\napproved scheme a person must:\n(a) have appropriate formal qualifications to perform the role and\nbe a member of an appropriate professional body; and\n(b) have adequate experience to perform the role, including at\nleast 5 years experience in the general insurance industry or\nin acting for a fidelity fund scheme (not limited to a building\nindustry scheme); and\n(c) have demonstrated competence and integrity in the conduct of\nhis or her professional duties.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 1 Auditors and actuaries\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 30\n(5) A person is eligible for appointment as the auditor for an approved\nscheme only if the person is eligible under the Insurance Act 1973\n(Cth) to audit the accounts of entities carrying on insurance\nbusiness.\n(6) A person is not eligible for appointment as the auditor or actuary of\nan approved scheme if the person:\n(a) has been convicted of an offence:\n(i) against the Act, the Corporations Act 2001, the\nInsurance Act 1973 (Cth), or the Financial Sector\n(Collection of Data) Act 2001 (Cth); or\n(ii) against a law of any jurisdiction of Australia, or a foreign\ncountry, involving dishonest conduct; or\n(b) has been an insolvent under administration, as defined in the\nCorporations Act 2001; or\n(c) has an actual or potential conflict of interest that is likely to\ninfluence his or her ability to carry out the role of auditor or\nactuary with appropriate probity and competence.\n","sortOrder":55},{"sectionNumber":"54","sectionType":"section","heading":"Application for approval of appointment","content":"54 Application for approval of appointment\n(1) An application under section 54E(2) of the Act for approval of the\nappointment of a person as the auditor or actuary of an approved\nscheme must include:\n(a) information to satisfy the Minister that the person meets the\neligibility criteria; and\n(b) the terms of appointment.\n(2) If, under section 54E(3)(b) of the Act, the Minister gives the trustees\nof the scheme a notice refusing to approve the appointment, the\nnotice must specify the way in which the person fails to meet the\neligibility criteria.\n","sortOrder":56},{"sectionNumber":"55","sectionType":"section","heading":"Revocation of approval of appointment","content":"55 Revocation of approval of appointment\n(1) The Minister may, by written notice, revoke the approval of a\nperson's appointment as the auditor or actuary for an approved\nscheme if satisfied the person:\n(a) has failed to exercise adequately and properly the functions of\nthe role; or\n(b) no longer meets one or more of the eligibility criteria.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 2 Special actuaries\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 31\n(2) The revocation takes effect immediately.\n(3) The Minister must give the notice of revocation to the person whose\napproval is revoked and a copy of the notice to the trustees of the\nscheme.\n","sortOrder":57},{"sectionNumber":"56","sectionType":"section","heading":"Ceasing to be auditor or actuary","content":"56 Ceasing to be auditor or actuary\n(1) A person ceases to be the auditor or actuary of an approved\nscheme if:\n(a) the approval of the person's appointment is revoked under\nregulation 55; or\n(b) the person resigns the appointment by written notice to the\ntrustees of the scheme; or\n(c) the trustees terminate the appointment by written notice to the\nperson.\n(2) Within 14 days after the day on which a person ceases to be the\nauditor or actuary as mentioned in subregulation (1)(b) or (c), the\ntrustees must give the Minister written notice of the cessation\nspecifying:\n(a) the date of cessation; and\n(b) the reasons for, or circumstances of, the cessation.\nDivision 2 Special actuaries\n","sortOrder":58},{"sectionNumber":"57","sectionType":"section","heading":"Eligibility criteria for appointment as special actuary","content":"57 Eligibility criteria for appointment as special actuary\n(1) For section 54EF(3) of the Act, this regulation prescribes the\neligibility criteria for the appointment of a person as a special\nactuary for an approved scheme.\n(2) The person must:\n(a) be Fellow of the Institute of Actuaries of Australia; or\n(b) have the actuarial qualifications and experience necessary to\nenable the person to perform the functions of a special actuary\nunder the Act.\n(3) The following persons are not eligible for appointment as the\nspecial actuary for an approved scheme:\n(a) the auditor or actuary for the scheme;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 2 Special actuaries\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 32\n(b) a trustee or officer of the scheme.\n","sortOrder":59},{"sectionNumber":"58","sectionType":"section","heading":"Procedures for appointment","content":"58 Procedures for appointment\n(1) Within 7 days after the day on which the trustees are given notice\nunder section 54EF(1) of the Act, they must appoint a person as the\nspecial actuary and give the Minister written notice of the\nappointment specifying:\n(a) the name of the person appointed; and\n(b) information about the person's eligibility for appointment.\n(2) Within 7 days after the day the Minister is notified of the\nappointment, the Minister may give written notice to the trustees\nstating that:\n(a) the person appointed is not acceptable to the Minister; and\n(b) the trustees must, within 7 days after receiving the notice,\nappoint a different person as the special actuary and give the\nMinister written notice specifying the matters mentioned in\nsubregulation (1)(a) and (b).\n(3) Subregulation (2) also applies in relation to the appointment of a\ndifferent person as the special actuary.\n(4) The trustees must not contravene a notice given to the trustees by\nthe Minister under subsection (2).\nMaximum penalty: 50 penalty units.\n(5) An offence against subregulation (4) is a regulatory offence.\n(6) It is a defence to a prosecution for an offence against\nsubregulation (4) if the defendant establishes a reasonable excuse.\n","sortOrder":60},{"sectionNumber":"59","sectionType":"section","heading":"Special actuary's report","content":"59 Special actuary's report\nFor section 54EG(3) of the Act, a special actuary's report must\ncontain a statement of the special actuary's opinion about each of\nthe following:\n(a) the adequacy of the whole or part of the amount stated in the\nscheme's accounts in relation to its liabilities, and the amount\nthat the scheme's actuary considers would be adequate in the\ncircumstances;\n(b) the accuracy of any relevant valuations made by the scheme's\nactuary;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 3 Requests from Minister\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 33\n(c) the assumptions used by the scheme's actuary in making the\nvaluations;\n(d) the relevance, appropriateness and accuracy of the\ninformation on which those valuations were based;\n(e) any other matter relevant to the special actuary's investigation\nthat the Minister directs the special actuary to give an opinion\nabout.\nDivision 3 Requests from Minister\n","sortOrder":61},{"sectionNumber":"60","sectionType":"section","heading":"Minister may require compliance with prudential standards","content":"60 Minister may require compliance with prudential standards\n(1) For section 54DE(1)(a) of the Act, this regulation applies if the\nMinister is satisfied on reasonable grounds that the trustees of an\napproved scheme:\n(a) are contravening a provision of the prudential standards; or\n(b) are likely to contravene a provision of the prudential standards\nin a way that is likely to give rise to prudential risk.\n(2) The Minister may, by written notice given to the trustees of the\nscheme, require them to comply with the provision of the prudential\nstandards.\n(3) The notice must specify a reasonable time for compliance with the\nprovision.\n(4) The trustees must comply with the notice despite anything to the\ncontrary in the scheme's trust deed or in any contract or\narrangement to which they are a party.\n(5) Each trustee of the scheme commits an offence if the trustees fail\nto comply with the notice.\nMaximum penalty: 60 penalty units.\n(6) An offence against subregulation (5) is a regulatory offence.\n(7) It is a defence to a prosecution for an offence against\nsubregulation (5) if the defendant establishes a reasonable excuse.\n","sortOrder":62},{"sectionNumber":"61","sectionType":"section","heading":"Minister may require information about operation and","content":"61 Minister may require information about operation and\nmanagement\n(1) For section 54DE(1)(b) of the Act, the Minister may give the\ntrustees of an approved scheme a notice requiring information\nrelevant to the operation and management of the scheme.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 4 Suspensions, cancellations and changes\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 34\n(2) The notice must specify a reasonable period for complying with the\nnotice.\n(3) Without limiting subregulation (1), the Minister may require\ninformation about any of the following:\n(a) the scheme's liabilities and potential liabilities at a particular\ndate or time or at particular intervals;\n(b) contributions to the scheme;\n(c) administrative or other costs of the scheme;\n(d) claims received by the scheme;\n(e) applications for certificates received by the scheme;\n(f) contracts or arrangements for services provided to the\ntrustees of the scheme.\n(4) If relevant to the requirement, the information may be given by an\naudit certificate.\n(5) Each trustee of the approved scheme commits an offence if the\ntrustees fail to comply with the notice.\nMaximum penalty: 60 penalty units.\n(6) An offence against subregulation (5) is a regulatory offence.\n(7) It is a defence to a prosecution for an offence against\nsubregulation (5) if the defendant establishes a reasonable excuse.\nDivision 4 Suspensions, cancellations and changes\n","sortOrder":63},{"sectionNumber":"62","sectionType":"section","heading":"Suspension or cancellation of approval","content":"62 Suspension or cancellation of approval\n(1) For section 54DE(1)(c) or (d) of the Act, the Minister may suspend\nor cancel the approval of an approved scheme on any of the\nfollowing grounds:\n(a) the trustees of the scheme have contravened:\n(i) the Act, a regulation or another law in force in the\nTerritory in relation to the scheme; or\n(ii) the prudential standards;\n(b) the scheme is insolvent and is unlikely to return to solvency\nwithin a reasonable time;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 4 Suspensions, cancellations and changes\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 35\n(c) the scheme has inadequate capital and is unlikely to have\nadequate capital within a reasonable time;\n(d) the scheme is, or is likely to become, unable to meet its\nliabilities;\n(e) there is, or may be, a risk to the security of the scheme's\nassets;\n(f) there is, or may be, a sudden deterioration in the scheme's\nfinancial condition;\n(g) the scheme has ceased to issue certificates in the Territory.\n(2) If the Minister proposes to suspend or cancel the approval of an\napproved scheme, the Minister must give the trustees of the\nscheme a written notice stating:\n(a) the grounds on which the Minister proposes to suspend or\ncancel the approval; and\n(b) the facts that, in the Minister's opinion, establish the grounds;\nand\n(c) that the trustees may, within a reasonable specified time, give\na written response to the Minister about the matters in the\nnotice.\n(3) If, after considering a response given under subregulation (2)(c),\nthe Minister is satisfied the grounds for suspending or cancelling\nthe approval have been established, the Minister may suspend or\ncancel the approval.\n(4) If the Minister suspends or cancels the approval, the Minister must\ngive written notice of the suspension or cancellation to the trustees.\n(5) Suspension or cancellation of an approval takes effect:\n(a) on the day when notice of the suspension or cancellation is\ngiven to the trustees; or\n(b) a later day as specified in the notice.\n","sortOrder":64},{"sectionNumber":"63","sectionType":"section","heading":"Cancellation of approval on request","content":"63 Cancellation of approval on request\n(1) The trustees of an approved scheme may, in writing, request the\nMinister to cancel the approval of the scheme.\n(2) The request must:\n(a) be signed by all the trustees of the scheme; and\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\nDivision 5 Other matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 36\n(b) set out the reasons for the request; and\n(c) include a plan for the management of any scheme liabilities.\n(3) The Minister may request the trustees to provide any additional\ninformation the Minister requires to make a decision on the request.\n(4) The Minister may, in writing:\n(a) cancel the approval; or\n(b) refuse to cancel the approval, giving reasons for the refusal.\n","sortOrder":65},{"sectionNumber":"64","sectionType":"section","heading":"Application for approval of change","content":"64 Application for approval of change\n(1) The trustees of an approved scheme may apply in writing to the\nMinister for approval to change the scheme.\n(2) The application must:\n(a) be signed by all the trustees of the scheme; and\n(b) set out the proposed change and the reasons for it.\n(3) The Minister may, in writing:\n(a) approve the change; or\n(b) refuse to approve the change, giving reasons for the refusal.\n(4) However, the Minister must refuse to approve the change if not\nsatisfied the scheme, as proposed to be changed, would continue\nto meet the approval criteria and prudential standards.\n(5) This regulation does not apply if the only change is in relation to the\nscheme's bank account.\nNote for regulation 64\nFor approval to appoint a new trustee for the scheme see section 54DBA of the\nAct.\nDivision 5 Other matters\n","sortOrder":66},{"sectionNumber":"65","sectionType":"section","heading":"Appointment of consumer representative","content":"65 Appointment of consumer representative\n(1) The Minister may, in writing, appoint a person (a consumer\nrepresentative) to represent the interests of beneficiaries under an\napproved scheme.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.3 Approved schemes – general matters\n","sortOrder":67},{"sectionNumber":"Div 5","sectionType":"division","heading":"Other matters","content":"Division 5 Other matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 37\n(2) Before appointing a person to be a consumer representative, the\nMinister:\n(a) must be satisfied that the person has suitable qualifications\nand experience for the appointment; and\n(b) may require the person to provide particular information in\nsupport of the appointment.\n(3) The appointment of a consumer representative is subject to the\nterms and conditions specified in the instrument of appointment.\n","sortOrder":68},{"sectionNumber":"66","sectionType":"section","heading":"Address for service of documents on trustees","content":"66 Address for service of documents on trustees\n(1) The trustees of an approved scheme must, at all times, have an\naddress in the Territory for service of documents on the trustees.\n(2) After the scheme is approved, the trustees must give the Minister\nwritten notice of any change of address in the Territory for service\nof documents as soon as practicable after the change occurs.\n","sortOrder":69},{"sectionNumber":"67","sectionType":"section","heading":"Offence to give misleading information or document","content":"67 Offence to give misleading information or document\n(1) A builder must not give the trustees of an approved scheme\ninformation the builder knows is misleading information.\nMaximum penalty: 100 penalty units.\n(2) A builder must not give the trustees of an approved scheme a\ndocument containing information the builder knows is misleading\ninformation.\nMaximum penalty: 100 penalty units.\n(3) However, subregulation (2) does not apply if the builder, when\ngiving the document to the trustees:\n(a) draws the misleading aspect of the document to the trustees'\nattention; and\n(b) to the extent to which the builder can reasonably do so – gives\nthe trustees the information necessary to remedy the\nmisleading aspect of the document.\n","sortOrder":70},{"sectionNumber":"68","sectionType":"section","heading":"Scheme's liability not affected if given misleading information","content":"68 Scheme's liability not affected if given misleading information\nAn approved scheme is not entitled to avoid liability under a\ncertificate only because the builder to whom the certificate was\nissued gave the trustees of the scheme misleading information to\nobtain the certificate.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 2 Financial matters generally\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 38\nPart 3.4 Approved schemes – prudential standards\n","sortOrder":71},{"sectionNumber":"Div 1","sectionType":"division","heading":"General prudential standards for trustees","content":"Division 1 General prudential standards for trustees\n","sortOrder":72},{"sectionNumber":"69","sectionType":"section","heading":"Continuing eligibility","content":"69 Continuing eligibility\nAt all times during a trustee's appointment, the trustee must meet\nthe eligibility criteria.\n","sortOrder":73},{"sectionNumber":"70","sectionType":"section","heading":"Duty to notify contravention of prudential standards","content":"70 Duty to notify contravention of prudential standards\n(1) This regulation applies if a trustee of an approved scheme becomes\naware of any matters that could lead to, or result in, the trustee or\nanother trustee contravening a prudential standard.\n(2) The trustee must give written notice of the matters to:\n(a) the other trustees; and\n(b) the Minister.\n","sortOrder":74},{"sectionNumber":"71","sectionType":"section","heading":"Management in compliance with trust deed","content":"71 Management in compliance with trust deed\nThe trustees of a scheme must manage the scheme in accordance\nwith the trust deed for the scheme.\nDivision 2 Financial matters generally\n","sortOrder":75},{"sectionNumber":"72","sectionType":"section","heading":"Financial management","content":"72 Financial management\nThe trustees of a scheme must ensure the scheme is maintained\nsolely for the following purposes:\n(a) the issuing of certificates to builders in accordance with the\nAct, these Regulations and the scheme's trust deed;\n(b) the payment of amounts to beneficiaries under certificates in\naccordance with the Act, these Regulations and the scheme's\ntrust deed;\n(c) any other purpose the Minister specifies by Gazette notice.\n","sortOrder":76},{"sectionNumber":"73","sectionType":"section","heading":"Financial records and annual accounts","content":"73 Financial records and annual accounts\n(1) The trustees of a scheme must keep accounting records for the\nscheme that will, for each financial year:\n(a) correctly record and explain the transactions and financial\nposition of the scheme for the year; and\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\n","sortOrder":77},{"sectionNumber":"Div 2","sectionType":"division","heading":"Financial matters generally","content":"Division 2 Financial matters generally\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 39\n(b) enable the trustees to prepare annual accounts for the year as\nrequired by subregulation (2); and\n(c) enable the auditor to conveniently and properly audit those\nannual accounts under regulation 75.\n(2) As soon as practicable after the end of each financial year, the\ntrustees must prepare annual accounts for the year in accordance\nwith:\n(a) the accounting standards so far as they are applicable to the\noperations of the scheme; and\n(b) any requirements the Minister specifies by Gazette notice.\n(3) The accounting records must be kept for at least 7 years after the\nend of the financial year to which the records relate.\n","sortOrder":78},{"sectionNumber":"74","sectionType":"section","heading":"Financial records and accounts during first year of approval","content":"74 Financial records and accounts during first year of approval\n(1) The trustees of a scheme must keep accounting records for the\nscheme for the first year of approval and prepare the accounts of\nthe scheme as soon as practicable after each period of 3 months,\nto be audited under regulation 75.\n(2) However, if a period of less than 3 months remains at end of the\nscheme's first year of approval, the accounts for that period are to\nbe prepared as part of the accounts for the first financial year.\n(3) The accounts must be prepared in accordance with:\n(a) the accounting standards; and\n(b) any requirements the Minister specifies by Gazette notice.\n","sortOrder":79},{"sectionNumber":"75","sectionType":"section","heading":"Audit of accounts and audit certificate","content":"75 Audit of accounts and audit certificate\n(1) As soon as practicable after the trustees of a scheme give the\nscheme's auditor the annual accounts, or the accounts mentioned\nin regulation 74, the auditor must:\n(a) audit the accounts; and\n(b) give the trustees an audit certificate in relation to the accounts.\n(2) The audit certificate must be signed by the auditor and must include\nthe following:\n(a) information about the capital adequacy of the scheme as\nmentioned in regulation 79;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 3 Actuarial matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 40\n(b) a statement by the auditor that the accounts accurately and\ncorrectly reflect the true financial position of the scheme;\n(c) any other information the Minister specifies by Gazette notice.\n(3) As soon as practicable after the trustees are given an audit\ncertificate relating to the first year of approval of the scheme, the\ntrustees must give the certificate (or a certified copy) to the Minister.\nDivision 3 Actuarial matters\n","sortOrder":80},{"sectionNumber":"76","sectionType":"section","heading":"Calculation of amount of contribution by actuary","content":"76 Calculation of amount of contribution by actuary\n(1) As soon as practicable after the end of a financial year, a scheme's\nactuary must:\n(a) calculate the appropriate amount for a contribution to the\nscheme by a builder to enable the issuing of a certificate; and\n(b) advise the trustees in writing of each calculation.\nNote for subregulation (1)(a)\nA calculation of the appropriate amount for a contribution is required before the\napplication for approval of the scheme may be made because regulation 26(3)(c)\nrequires a preliminary contributions certificate to be included in the application.\n(2) In addition to any other matter the actuary considers appropriate,\nthe actuary must have regard to the following in calculating the\nappropriate amount of a contribution to be made by a builder:\n(a) the scheme's capital management plan;\n(b) the valuation of the liabilities of the scheme mentioned in\nregulation 78;\n(c) the number of certificates already issued;\n(d) the total amount that could be claimed under the certificates\nalready issued;\n(e) any other matter the Minister specifies by Gazette notice.\n","sortOrder":81},{"sectionNumber":"77","sectionType":"section","heading":"Contributions certificate","content":"77 Contributions certificate\n(1) A scheme's actuary must give the trustees of the scheme a\ncontributions certificate as soon as practicable after the end of each\nfinancial year to enable the trustees to comply with regulation 92.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 3 Actuarial matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 41\n(2) The actuary must also give the trustees a contributions certificate at\nany other time if the Minister has, in writing, required the trustees to\nprovide the Minister with the certificate.\n(3) A contributions certificate must be signed by the actuary and must\ninclude the following:\n(a) a statement that the actuary is satisfied with the adequacy of\nthe amount of contributions required to be paid to the scheme\nas mentioned in regulation 76;\n(b) any other information the Minister specifies by Gazette notice.\n(4) As soon as practicable after the trustees are given a contributions\ncertificate under subregulation (2), the trustees must give the\ncertificate (or a certified copy) to the Minister.\n","sortOrder":82},{"sectionNumber":"78","sectionType":"section","heading":"Actuary to make annual valuation of liabilities","content":"78 Actuary to make annual valuation of liabilities\n(1) A scheme's actuary must make a valuation of the liabilities of the\nscheme as soon as practicable after the end of each financial year.\n(2) The Minister may determine by Gazette notice a methodology for\nthe valuation of a scheme's liabilities.\n(3) In the absence of a determination by the Minister, the actuary must\nmake the valuation in accordance with this regulation.\n(4) The valuation must be of both:\n(a) the outstanding claims liabilities; and\n(b) the certificate liabilities.\n(5) For subregulation (4)(a) and (b):\n(a) the scheme's outstanding claims liabilities relate to the\nliabilities associated with all the relevant circumstances that\ncould lead to claims for payment under certificates incurred\nbefore the date of the valuation, whether or not the\ncircumstances have been reported to the trustees; and\n(b) the scheme's certificate liabilities relate to future claims, under\nexisting certificates, that may arise from future relevant\ncircumstances.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 3 Actuarial matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 42\n(6) The valuation of the scheme's outstanding claims liabilities and\ncertificate liabilities must be in accordance with:\n(a) the methodology of any standard, in force from time to time\nunder the Insurance Act 1973 (Cth), that relates to the\nvaluation of similar liabilities under a policy of insurance; and\n(b) any other requirement the Minister specifies by Gazette\nnotice.\n","sortOrder":83},{"sectionNumber":"79","sectionType":"section","heading":"Capital adequacy in accordance with capital management plan","content":"79 Capital adequacy in accordance with capital management plan\n(1) The trustees of a scheme must:\n(a) have a capital management plan for the scheme to ensure\nthere is adequate capital in the scheme at all times; and\n(b) comply with the plan.\n(2) A capital management plan is a plan, approved by the Minister in\nwriting, that includes the following information:\n(a) the minimum value of net tangible assets the scheme is\nrequired to hold (the minimum value);\n(b) the value of net tangible assets to be held by the scheme\nabove the minimum value, having regard to the level of risk in\nrelation to the scheme's liabilities (the additional value);\n(c) the time within which the scheme is to hold the additional\nvalue;\n(d) any other information as required by the Minister in writing.\n(3) The net tangible assets of the scheme:\n(a) are the scheme's total tangible assets less the scheme's total\nliabilities; and\n(b) must be calculated:\n(i) on the basis that the amount of all claims that have been\nnotified to the trustees at the time of calculation, but not\ndetermined and paid by the trustees, are included in the\ntotal liabilities; or\n(ii) on a different basis as specified by the Minister in\nwriting.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 3 Actuarial matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 43\n(4) As soon as practicable after the end of the first year of approval and\neach financial year of the scheme, the trustees must:\n(a) review the capital management plan and, if necessary, amend\nthe plan; and\n(b) submit the plan (whether amended or not) to the Minister for\napproval.\n(5) The trustees must make the capital management plan available to\nthe public as soon as practicable after it is approved.\n(6) The trustees must notify the Minister in writing immediately if the\nvalue of the net tangible assets held in the scheme falls below the\nminimum value.\n","sortOrder":84},{"sectionNumber":"80","sectionType":"section","heading":"Assets","content":"80 Assets\n(1) The trustees of a scheme must not apply, or deal with, the assets of\nthe scheme, whether indirectly or directly, except in accordance\nwith these Regulations.\n(2) The assets of the scheme must be applied only for the following\npurposes:\n(a) to meet liabilities or expenses incurred for the purposes of\nmaintaining the scheme;\n(b) to make an investment in accordance with regulation 81(1);\n(c) to pay a claim made under a certificate;\n(d) any other purpose the Minister specifies by Gazette notice.\n(3) The trustees must formulate, adopt and give effect to an investment\nstrategy that has regard to the whole of the circumstances of the\nscheme including, but not limited to, the following:\n(a) the risk (including currency and counterparty risk) involved in\nmaking, holding and realising, and the likely return from, the\nscheme's assets, having regard to its expected cash flow\nrequirements;\n(b) the composition of the scheme's assets as a whole including\nthe extent to which the assets are diverse or expose the\nscheme to risks from inadequate diversity;\n(c) the liquidity of the scheme's assets having regard to its\nexpected cash flow requirements;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 3 Actuarial matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 44\n(d) the ability of the scheme to discharge its existing and\nprospective liabilities.\n(4) The trustees must not mortgage, charge or otherwise encumber\n(including by entering into a contract of guarantee) any asset of the\nscheme.\n(5) The trustees must not borrow money in relation to the scheme\nexcept in accordance with subregulation (6) or (7).\n(6) Unless subregulation (7) applies, the trustees may borrow money if:\n(a) the purpose of the borrowing is to enable the trustees to make\na payment under a certificate that, apart from the borrowing,\nthe trustees would not be able to make; and\n(b) the period of the borrowing does not exceed 90 days; and\n(c) the total amount borrowed will not exceed 10% of the value of\nthe scheme's assets; and\n(d) the Minister is notified in writing of the amount and\ncircumstances of the borrowing; and\n(e) the Minister has given the trustees written approval of the\nborrowing.\n(7) The Minister may give the trustees a written direction that they may\nborrow money only on the conditions specified in the direction.\n","sortOrder":85},{"sectionNumber":"81","sectionType":"section","heading":"Investment of assets","content":"81 Investment of assets\n(1) The trustees of a scheme must ensure the assets of the scheme\nare invested exclusively in the following types of investments, which\nmust be held and located in Australia:\n(a) cash;\n(b) cash equivalents (including debt instruments);\n(c) other types of investments the Minister specifies by Gazette\nnotice after consulting with the Treasurer.\n(2) For subregulation (1)(b), a debt instrument includes securities\n(other than stocks that are equities) and other commercial paper.\n(3) However, a debt instrument only includes an instrument issued by\nor in relation to an entity that, at the time when the instrument is\noffered for sale for investment, is rated by Standard and Poor's or\nMoody's as investment grade.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\n","sortOrder":86},{"sectionNumber":"Div 3","sectionType":"division","heading":"Actuarial matters","content":"Division 3 Actuarial matters\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 45\n(4) If a counterparty is rated by Standard and Poor's and Moody's,\neach rating is a relevant rating for subregulation (3).\n","sortOrder":87},{"sectionNumber":"82","sectionType":"section","heading":"Trustees to ensure solvency","content":"82 Trustees to ensure solvency\n(1) The trustees of a scheme must ensure that, at all times, the amount\nof the scheme's assets are sufficient to meet the trustees'\nobligations:\n(a) to each beneficiary under a certificate; and\n(b) to all other creditors of the scheme.\n(2) The scheme's actuary must give the trustees a document specifying\na range of adverse conditions for which there must be sufficient\nassets in the approved scheme to meet the trustees' obligations.\n(3) The trustees must take into account the document given to them by\nthe actuary.\n","sortOrder":88},{"sectionNumber":"83","sectionType":"section","heading":"Solvency certificate","content":"83 Solvency certificate\n(1) A scheme's actuary must give the trustees of the scheme a\nsolvency certificate as soon as practicable after the end of each\nfinancial year to enable the trustees to comply with regulation 92.\n(2) The actuary must also give the trustees a solvency certificate:\n(a) within 3 months after the date on which the scheme is\napproved or a longer period as approved in writing by the\nMinister; and\n(b) at any other time if the Minister has, in writing, required the\ntrustees to provide the Minister with the certificate.\n(3) A solvency certificate must be signed by the actuary and must\ninclude the following:\n(a) a statement that the actuary is satisfied about the solvency of\nthe scheme;\n(b) any other information the Minister specifies by Gazette notice.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 4 Records, plans and reports\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 46\n(4) As soon as practicable after the trustees are given a solvency\ncertificate under subregulation (2), the trustees must give the\ncertificate (or a certified copy) to the Minister.\n","sortOrder":89},{"sectionNumber":"84","sectionType":"section","heading":"Actuarial report","content":"84 Actuarial report\n(1) A scheme's actuary must give the trustees of the scheme an\nactuarial report as soon as practicable after the end of each\nfinancial year to enable the trustees to comply with regulation 92.\n(2) The actuarial report must include information about the following:\n(a) the solvency of the scheme;\n(b) the valuation of the scheme's liabilities by the actuary;\n(c) the adequacy of the amount of contributions required to be\npaid to the scheme for the issuing of certificates.\n","sortOrder":90},{"sectionNumber":"85","sectionType":"section","heading":"Engagement of investment fund manager","content":"85 Engagement of investment fund manager\n(1) The trustees of a scheme may engage a person to manage an\ninvestment portfolio for the scheme (an investment fund\nmanager).\n(2) The engagement of an investment fund manager must be by written\nagreement:\n(a) specifying how the investment fund manager may invest for\nthe scheme; and\n(b) requiring the investment fund manager to comply with the\nprudential standards relevant to investment.\n(3) The trustees must give the Minister notice of the engagement of an\ninvestment fund manager.\nDivision 4 Records, plans and reports\n","sortOrder":91},{"sectionNumber":"86","sectionType":"section","heading":"Administration records","content":"86 Administration records\nThe trustees of a scheme must retain the following documents for\nat least 10 years after the date of the document:\n(a) minutes of a meeting of the trustees at which any matter\nrelating to the scheme is considered;\n(b) a record of a decision made by the trustees in relation to any\nmatter affecting the scheme;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 4 Records, plans and reports\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 47\n(c) a document evidencing the change of a trustee;\n(d) a document that deals with the operations of the scheme;\n(e) the scheme's compliance plan and each variation to the plan;\n(f) the scheme's contingency plan and each variation to the plan;\n(g) a copy of each certificate issued;\n(h) a copy of each document relating to the payment of a claim\nmade under a certificate;\n(i) any other document the Minister specifies by Gazette notice.\n","sortOrder":92},{"sectionNumber":"87","sectionType":"section","heading":"Compliance plan","content":"87 Compliance plan\n(1) The trustees of a scheme must formulate, adopt and give effect to a\ncompliance plan for the scheme that specifies the measures the\ntrustees must apply in operating the scheme.\nNote for subregulation (1)\nUnder regulation 26(3)(d), the compliance plan must be formulated before the\napproval of the scheme.\n(2) The compliance plan must include (but is not limited to) measures\nfor the following matters:\n(a) ensuring the compliance of the scheme with the Act, these\nRegulations and any conditions of approval of the scheme;\n(b) identifying, understanding, addressing and monitoring:\n(i) any financial risks and any non-financial risks of the\nscheme; and\n(ii) balance sheet risk and market risk;\n(c) reporting and rectifying any breach of the compliance plan;\n(d) specifying a person who is responsible for monitoring each\nrisk.\n(3) For subregulation (2)(b)(ii), balance sheet risk and market risk\ninclude (but are not limited to) any of the following:\n(a) the risk of a beneficiary making a claim under a certificate;\n(b) product design and pricing risk;\n(c) liability risk;\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 4 Records, plans and reports\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 48\n(d) risk arising from the management of a claim under a\ncertificate;\n(e) credit risk;\n(f) operational risk (including, but not limited to, legal and\nreputational risk).\n","sortOrder":93},{"sectionNumber":"88","sectionType":"section","heading":"Assessment and amendment of compliance plan","content":"88 Assessment and amendment of compliance plan\n(1) As soon as practicable after the end of each financial year the\ntrustees of a scheme must assess whether the compliance plan is\nadequate for the purposes of the scheme.\n(2) The trustees:\n(a) may, at any time, amend the compliance plan to ensure it is\nadequate for the purposes of the scheme; and\n(b) if the compliance plan is amended – must give the Minister a\ncopy of the amended plan within 14 days after the\namendment.\n","sortOrder":94},{"sectionNumber":"89","sectionType":"section","heading":"Monitoring and reporting in relation to compliance plan","content":"89 Monitoring and reporting in relation to compliance plan\n(1) At regular intervals, and at least once every 3 months, the trustees\nof a scheme must monitor the extent to which the scheme complies\nwith the compliance plan.\n(2) The trustees must immediately give the Minister written notice of\nany breach of the compliance plan that, in the trustees' opinion, will\nhave a material adverse effect on the scheme.\n(3) The trustees may form the opinion mentioned in subregulation (2) if,\nin their opinion, the breach will have a material adverse effect on\nany of the following:\n(a) the ability of the trustees to perform any of their duties and\nobligations under the trust deed;\n(b) the value of the scheme's assets;\n(c) the interests of beneficiaries.\n\nChapter 3 Fidelity fund schemes and approved schemes\nPart 3.4 Approved schemes – prudential standards\nDivision 4 Records, plans and reports\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 49\n","sortOrder":95},{"sectionNumber":"90","sectionType":"section","heading":"Contingency plan","content":"90 Contingency plan\n(1) The trustees of a scheme must formulate, adopt and give effect to a\ncontingency plan for the scheme specifying the way in which they\nwill deal with a contingency event specified in the plan.\nNote for subregulation (1)\nUnder regulation 26(3)(c), the contingency plan must be formulated before the\napproval of the scheme.\n(2) The contingency plan must include provisions about the following\nmatters:\n(a) the place or places where duplicate paper and electronic\nrecords are to be kept;\n(b) the availability of additional office, human, material and other\nresources and back-up computer facilities;\n(c) the role of other service providers to the trustees in relation to\nthe scheme;\n(d) the availability of financial resources to fund any necessary\nrectification of difficulties;\n(e) any matter the Minister specifies by Gazette notice.\n(3) The trustees must put in place, and at all times maintain, the\nprocesses and systems required to give effect to the scheme's\ncontingency plan.\n(4) The trustees must immediately give the Minister written notice of\nthe occurrence of any contingency event specified in the\ncontingency plan that, in the trustees' opinion, will have a material\nadverse effect on the scheme.\n(5) The trustees may form the opinion mentioned in subregulation (4) if,\nin their opinion, the occurrence of the contingency event will have a\nmaterial adverse effect on any of the following:\n(a) the ability of the trustees to perform any of their duties and\nobligations under the trust deed;\n(b) the value of the scheme's assets;\n(c) the interests of beneficiaries.\n\nChapter 3 Fidelity fund schemes and approved schemes\n","sortOrder":96},{"sectionNumber":"Part 3","sectionType":"part","heading":"4 Approved schemes – prudential standards","content":"Part 3.4 Approved schemes – prudential standards\n","sortOrder":97},{"sectionNumber":"Div 4","sectionType":"division","heading":"Records, plans and reports","content":"Division 4 Records, plans and reports\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 50\n(6) In this regulation:\ncontingency event means any major administrative difficulty that\nmay be caused to a scheme by a disaster, accident, crime, systems\nfailure or other unforeseen event beyond the control of the trustees.\n","sortOrder":98},{"sectionNumber":"91","sectionType":"section","heading":"Amendment of contingency plan","content":"91 Amendment of contingency plan\n(1) The trustees of a scheme must amend the scheme's contingency\nplan as necessary.\n(2) If the contingency plan is amended, the trustees must give the\nMinister a copy of the amended plan within 14 days after the\namendment.\n","sortOrder":99},{"sectionNumber":"92","sectionType":"section","heading":"Annual reporting to Minister","content":"92 Annual reporting to Minister\n(1) Within 90 days after the end of each financial year, the trustees of a\nscheme must give the Minister the following documents in relation\nto that year:\n(a) the annual accounts of the scheme;\n(b) the audit certificate;\n(c) the actuarial report, contributions certificate and solvency\ncertificate;\n(d) a declaration by the trustees that, within 1 month before the\ndate of the documents mentioned in paragraphs (a) to (c), the\ntrustees have resolved that they are of the opinion there are\nreasonable grounds to believe the scheme will be able to meet\nits liabilities as and when they become due and payable;\n(e) a declaration by the trustees that they have adopted and given\neffect to a compliance plan for the scheme in accordance with\nregulation 87 and have satisfied themselves as to the\nadequacy of, and the scheme's compliance with, the plan;\n(f) if relevant – a list, signed and dated by 2 trustees, specifying\nany breach of the compliance plan that must be reported\nunder regulation 89(2);\n(g) a declaration by the trustees that they have adopted and given\neffect to a contingency plan for the scheme in accordance with\nregulation 90 and have satisfied themselves as to the\nadequacy of the plan.\n\nChapter 4 Transitional matters for Building Legislation Amendment (Consumer\nProtection) Regulations 2026\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 51\n(2) The trustees may give the Minister a copy of the following\ndocuments if the copy is dated and signed by 2 trustees who have\ncertified it is a true copy of the original:\n(a) the annual accounts;\n(b) a certificate or report mentioned in subregulation (1)(b) or (c).\n","sortOrder":100},{"sectionNumber":"93","sectionType":"section","heading":"Reporting to Commissioner","content":"93 Reporting to Commissioner\n(1) The trustees of a scheme must report to the Commissioner each\ndecision by the trustees to pay or refuse a claim under a certificate:\n(a) in the first year of approval – within 30 days after the end of\nthe year; and\n(b) in each financial year – within 30 days after the end of the\nyear; and\n(c) for any other period – as the Minister specifies by Gazette\nnotice.\n(2) The report must include, for the relevant year or period:\n(a) the number of claims received by the trustees under\ncertificates; and\n(b) the amount sought in each claim; and\n(c) the number of payments made in response to claims; and\n(d) for each claim that was paid – the amount paid; and\n(e) for each rejected claim – the reason for its rejection.\nChapter 4 Transitional matters for Building Legislation\nAmendment (Consumer Protection)\nRegulations 2026\n","sortOrder":101},{"sectionNumber":"94","sectionType":"section","heading":"Definitions","content":"94 Definitions\nIn this Chapter:\namending Regulations means Part 2 of the Building Legislation\nAmendment (Consumer Protection) Regulations 2026.\ncommencement means 30 March 2026.\n\n","sortOrder":102},{"sectionNumber":"Part 4","sectionType":"part","heading":"Transitional matters for Building Legislation Amendment (Consumer","content":"Chapter 4 Transitional matters for Building Legislation Amendment (Consumer\nProtection) Regulations 2026\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 52\n95 Application of amendments to regulation 5\nDespite the amendment of regulation 5 by the amending\nRegulations, that regulation, as in force immediately before the\ncommencement, continues to apply in relation to building work that\nwas, or is to be, carried out under a contract entered into before the\ncommencement.\n","sortOrder":103},{"sectionNumber":"96","sectionType":"section","heading":"Application of amendments to existing scheme","content":"96 Application of amendments to existing scheme\n(1) To avoid doubt, regulations 32, 40, 50 and 52, as amended by the\namending Regulations, apply in relation to a trust deed for a\nscheme that was approved by the Minister before the\ncommencement (an existing scheme).\n(2) The trustees of an existing scheme must, within 30 days after the\ncommencement, amend the trust deed for the scheme:\n(a) in a manner that is consistent with regulations 32, 50 and 52,\nas in force after the commencement; and\n(b) subject to paragraph (c), in a manner that is consistent with\nregulation 40, as in force after the commencement; and\n(c) to provide that despite the amendments to the claim\nprovisions, the claim provisions, as in force immediately\nbefore the deed is amended as mentioned in paragraph (b),\ncontinue to apply in relation to residential building work\ncovered by a certificate issued before the deed is amended.\n(3) Regulation 64 does not apply in relation to the amendments\nmentioned in subregulation (2).\n(4) As soon as reasonably practicable after amending the trust deed in\naccordance with subregulation (2), the trustees of an existing\nscheme must give a copy of the amended trust deed to the\nMinister.\n(5) In this regulation:\nclaim provisions means the provisions of a trust deed that specify\nthe matters mentioned in regulation 40.\n\nENDNOTES\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 53\nENDNOTES\n","sortOrder":104},{"sectionNumber":"1","sectionType":"section","heading":"KEY Key to abbreviations","content":"1 KEY Key to abbreviations\namd = amended od = order\napp = appendix om = omitted\nbl = by-law pt = Part\nch = Chapter r = regulation/rule\ncl = clause rem = remainder\ndiv = Division renum = renumbered\nexp = expires/expired rep = repealed\nf = forms s = section\nGaz = Gazette sch = Schedule\nhdg = heading sdiv = Subdivision\nins = inserted SL = Subordinate Legislation\nlt = long title sub = substituted\nnc = not commenced\n","sortOrder":105},{"sectionNumber":"2","sectionType":"section","heading":"LIST OF LEGISLATION","content":"2 LIST OF LEGISLATION\nBuilding (RBI and Fidelity Fund Schemes) Regulations (SL No. 44, 2012)\nNotified 14 December 2012\nCommenced 1 January 2013 (r 2, s 2 Building Amendment (Residential\nBuilding Consumer Protection) Act 2012 (Act No. 7, 2012)\nand Gaz S85, 28 December 2012)\nStatute Law Revision Act 2014 (Act No. 38, 2014)\nAssent date 13 November 2014\nCommenced 13 November 2014\nBuilding Legislation Amendment (Fidelity Fund) Act 2025 (Act No. 37, 2025)\nAssent date 5 December 2025\nCommenced 6 December 2025 (s 2)\nBuilding Legislation Amendment (Consumer Protection) Regulations 2026 (SL No. 2,\n2026)\nDate made 12 February 2026\nCommenced 30 March 2026 (r 2)\n","sortOrder":106},{"sectionNumber":"3","sectionType":"section","heading":"GENERAL AMENDMENTS","content":"3 GENERAL AMENDMENTS\nGeneral amendments of a formal nature (which are not referred to in the table\nof amendments to this reprint) are made by the Interpretation Legislation\nAmendment Act 2018 (Act No. 22, 2018) to: rr 1, 5 and 7.\n","sortOrder":107},{"sectionNumber":"4","sectionType":"section","heading":"LIST OF AMENDMENTS","content":"4 LIST OF AMENDMENTS\nr 5 amd No. 2, 2026, r 4\nr 19 amd No. 2, 2026, r 5\nch 3\npt 3.2\ndiv 2 hdg amd Act No. 37, 2025, s 11\n\nENDNOTES\nBuilding (RBI and Fidelity Fund Schemes) Regulations 2012 54\nrr 31A – 31C ins Act No. 37, 2025, s 12\nr 32 amd No. 2, 2026, r 6\nch 3\npt 3.2\ndiv 2A hdg ins Act No. 37, 2025, s 13\nr 40 amd No. 2, 2026, r 7\nr 50 amd No. 2, 2026, r 8\nr 52 sub No. 2, 2026, r 9\nch 3\npt 3.3\ndiv 3 hdg sub Act No. 37, 2025, s 14\nr 61 amd Act No. 37, 2025, s 15\nr 62 amd Act No. 38, 2014, s 2\nr 63 sub No. 2, 2026, r 10\nr 64 amd Act No. 37, 2025, s 16\nr 69 amd Act No. 37, 2025, s 17\nr 93 amd No. 2, 2026, r 11\nch 4 hdg ins No. 2, 2026, r 12\nrr 94 – 96 ins No. 2, 2026, r 12","sortOrder":108}],"analysis":{"flash_summary":{"complexity_score":8,"scope_assessment":{"changed":true,"description":"The Regulations, as amended in 2025–2026, expand and clarify the regulatory scope. New provisions tighten trustee appointment controls and approval procedures (regs 31A–31C), impose clearer management duties for schemes (reg 33) and update claim/consumer procedures (regs 40, 50, 52). They also require trustees of existing approved schemes to amend trust deeds within 30 days and apply selected new claim and governance rules to pre-existing schemes (reg 96). Ministerial oversight and remedial powers are reinforced (regs 60–64)."},"complexity_factors":["Multiple regulated actors and roles (builders, current owners/beneficiaries, insurers, trustees, actuary, auditor, special actuary, consumer representative) with distinct eligibility and conduct rules (regs 9, 23, 31, 53, 57, 65).","Detailed prudential, actuarial and capital-management requirements (valuation of liabilities, contributions certificates, solvency and actuarial reports, capital management plan) that require specialist input (regs 76–79, 83–84).","Extensive governance, compliance and contingency obligations (trust deed rules, compliance plan, contingency plan, record-keeping, monitoring and quarterly checks) with reporting duties to Minister and Commissioner (regs 32, 33, 86–92, 93).","Complex claims framework covering cover periods, relevant circumstances, beneficiaries, exclusions, minimum and capped amounts, excesses and rectification options (regs 7–8, 14–18, 19–24, 40–49).","Significant Ministerial discretion and enforcement powers (information notices, prudential remedial notices, suspension/cancellation of scheme approval, approval of trustee/auditor/actuary appointments) with penal consequences for non-compliance (regs 60–64, 31A–31B, 55).","Interlocking statutory references and transitional rules that change application to pre-existing contracts and require prompt trust-deed amendments (regs 94–96 and multiple amendment notes)."],"plain_english_summary":"These Regulations prescribe what must be in residential building indemnity (RBI) policies and fidelity certificates, and set prudential, governance and reporting rules for fidelity fund schemes. They say which building work is covered, who counts as a beneficiary, what losses are covered or excluded, who pays (builders contribute; insurers or schemes pay claims) and who decides payments (insurers or trustees have discretion). They impose duties on trustees, actuaries and auditors and give the Minister powers to require compliance, information or to suspend approvals (see regs 35, 23, 41, 60–64)."},"issue_detection":{"absurdities":[],"contradictions":[]},"kimi_summary":{"_metrics":{"completionTokens":750},"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":true,"description":"The legislation has expanded significantly from its original 2012 form. The 2026 amendments (Building Legislation Amendment (Consumer Protection) Regulations 2026) added a new Chapter 4 with transitional provisions, modified claim timeframes in regulation 40, and imposed new obligations on existing schemes to amend their trust deeds within 30 days. The 2025 amendments inserted new trustee approval processes (regulations 31A-31C) and management provisions (Division 2A). The original scheme was substantially augmented by the Fidelity Fund Act 2025 and subsequent regulations, indicating scope creep from a simple insurance framework to a comprehensive prudential regulatory regime."},"complexity_factors":["Extensive cross-referencing to the Building Act 1993 and other regulations (e.g. Building Dispute Resolution Regulations)","47+ defined terms in the interpretation section, many with nested definitions","Dual parallel systems (insurance policies vs fidelity fund schemes) with similar but not identical requirements","Multiple conditional timelines and triggering events for claims (cover periods, 90-day discovery windows, extensions)","Detailed prudential standards including capital adequacy, solvency, actuarial valuations, and investment restrictions","Nested exceptions to coverage in regulations 15 and 46 (16 categories of excluded losses each)","Trust deed requirements that must mirror regulatory provisions creating duplication","Building classification system (Class 1a, Class 2, Class 10) requiring technical knowledge of the Building Code","Transitional provisions in Chapter 4 creating temporal complexity for existing schemes"],"plain_english_summary":"These Northern Territory regulations set up two parallel systems to protect homeowners when residential building work goes wrong: **insurance policies** (RBI policies) and **fidelity fund schemes**.\n\n**What the legislation does:**\n\n**For homeowners (beneficiaries):**\n- If a builder disappears, goes bankrupt, dies, or has their registration cancelled, homeowners can claim financial losses for defective work or unfinished projects\n- Covers costs like removal expenses, temporary accommodation (up to 60 days), lost deposits, legal costs, and paying another builder to fix the work\n- Minimum cover is **$200,000** per project\n- Claims must generally be made within specific time limits (cover periods) and within 90 days of discovering defects\n\n**For builders:**\n- Must either obtain an **authorised RBI policy** from an approved insurer, OR\n- Join an **approved fidelity fund scheme** and obtain a certificate\n- Must pay contributions to fidelity fund schemes (calculated by an actuary)\n- Must notify insurers/schemes if contract prices change by more than 5%\n\n**For fidelity fund schemes:**\n- Must have at least **5 trustees** meeting strict eligibility criteria (Australian citizens, professional indemnity insurance, no conflicts of interest, no dishonesty convictions)\n- Must maintain **prudential standards** including: capital management plans, annual actuarial valuations, solvency certificates, compliance plans, and contingency plans\n- Investments restricted to cash and Australian-held, investment-grade debt instruments\n- Subject to Ministerial oversight, including powers to suspend/cancel approval\n\n**Key exclusions** from cover include: wear and tear, owner maintenance failures, appliances, asbestos, fraud by the builder, war/natural disasters, and \"inconvenience or distress\"\n\n**Who it affects:** Anyone undertaking residential building work valued at **$25,000 or more** in declared consumer protection areas of the Northern Territory — primarily homeowners, builders, insurers, and scheme trustees."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"The dual-agency administration structure suggests the scope evolved beyond a simple building regulation into something that straddles both consumer protection/financial schemes and occupational licensing — two distinct regulatory domains now split between separate government departments. This split is unusual and suggests the original instrument may have been restructured or its responsibilities redistributed over time."},"complexity_factors":["Dual agency administration creates potential for jurisdictional overlap and confusion about which department handles specific issues","Interaction between two distinct financial protection schemes (RBI insurance and Fidelity Fund) operating under the same regulations","Limited metadata available — no gazette number, date of making, or regulation number provided, making it difficult to fully assess the instrument","Building and construction law intersects with insurance law, licensing law, and consumer protection law","Split commencement — regulations made in 2012 but not commencing until 2026 raises questions about transitional arrangements and what applied in the interim","The distinction between which provisions relate to 'regulation and licensing of occupations' versus other matters requires careful reading to determine which department has authority"],"plain_english_summary":"These regulations set the operational rules for Northern Territory Residential Building Insurance (RBI) and the Fidelity Fund, providing a safety net for homeowners when builders fail, act dishonestly, or become insolvent, and setting compliance requirements for licensed builders and related businesses. Administration is split between the Department of Trade, Business and Asian Relations (licensing) and the Department of Lands, Planning and Environment (other matters). Commencement: 30 March 2026."}},"importantCases":[],"_links":{"self":"/api/acts/building-rbi-and-fidelity-fund-schemes-regulations-2012","history":"/api/acts/building-rbi-and-fidelity-fund-schemes-regulations-2012/history","analysis":"/api/acts/building-rbi-and-fidelity-fund-schemes-regulations-2012/analysis","conflicts":"/api/acts/building-rbi-and-fidelity-fund-schemes-regulations-2012/conflicts","importantCases":"/api/acts/building-rbi-and-fidelity-fund-schemes-regulations-2012/important-cases","documents":"/api/acts/building-rbi-and-fidelity-fund-schemes-regulations-2012/documents"}}