{"id":"nsw:act-2001-040","name":"Insurance Protection Tax Act 2001","slug":"insurance-protection-tax-act-2001","collection":"act","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"40 of 2001","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":105105,"registerId":"nsw-act-2001-040-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"# Part 1 Preliminary\n\nPart 1 Preliminary","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Name of Act","content":"#### 1 Name of Act\n\n1 Name of Act\n\n> This Act is the [Insurance Protection Tax Act 2001](/view/html/inforce/current/act-2001-040).","sortOrder":1},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> This Act commences on 1 July 2001.","sortOrder":2},{"sectionNumber":"3","sectionType":"section","heading":"Definitions","content":"#### 3 Definitions\n\n3 Definitions\n\n> In this Act—\n> \n> annuity means a contract that satisfies the following requirements—\n> \n> > (a) the contract provides for the periodic payment of money to the annuitant in fee for life or for a specified term of years as an annual or more frequent entitlement,\n> \n> > (b) the periodic payment is a sum certain expressed as a dollar amount, but may be varied according to a predetermined formula,\n> \n> > (c) the periodic payments are not derived from the money paid for the contract but are derived solely from the contract and comprise income and not the repayment of capital.\n> \n> Chief Commissioner means the Chief Commissioner of State Revenue referred to in section 60 of the [Taxation Administration Act 1996](/view/html/inforce/current/act-1996-097).\n> \n> exempt insurance means any of the following—\n> \n> > (a) insurance covering only property of the Crown,\n> \n> > (b) insurance effected by a separate policy in a distinct sum against loss by fire on the tools, implements of work or labour used by any working mechanic, artificer, handcrafter or labourer,\n> \n> > (c) insurance taken out by or on behalf of a non-profit organisation having as one of its objects a charitable, benevolent, philanthropic or patriotic purpose,\n> \n> > (d) insurance taken out by or on behalf of a society or institution for the time being approved for the purposes of this paragraph by the Chief Commissioner whose resources are, in accordance with its rules or objects, used wholly or predominantly for—\n> > \n> > > (i) the relief of poverty, or\n> > \n> > > (ii) the promotion of education, or\n> > \n> > > (iii) any purpose directly or indirectly connected with defence or the amelioration of the condition of past or present members of the naval, military or air forces of the Commonwealth or their dependants or any other patriotic object, or\n> > \n> > > (iv) such other purpose as, in the opinion of the Chief Commissioner, warrants the society or institution being taken to be a charitable society or institution,\n> \n> > (e) insurance covering mortgages or pools of mortgages acquired for the purpose of issuing mortgage-backed securities within the meaning of the [Duties Act 1997](/view/html/inforce/current/act-1997-123),\n> \n> > (f) medical benefits insurance, being insurance effected by a contract of insurance that is issued by a private health insurer within the meaning of the [Private Health Insurance Act 2007](http://www.legislation.gov.au/)of the Commonwealth and that provides hospital benefits or medical benefits (or both), whether or not other benefits are also provided,\n> \n> > (g) insurance effected under the [Workers Compensation Act 1987](/view/html/inforce/current/act-1987-070) or the [Workplace Injury Management and Workers Compensation Act 1998](/view/html/inforce/current/act-1998-086),\n> \n> > (h) insurance of—\n> > \n> > > (i) the hull of a floating vessel used primarily for commercial purposes, or\n> > \n> > > (ii) goods or merchandise, or the freight of goods or merchandise, carried by land, sea or air,\n> > \n> > or both,\n> \n> > (i) redundancy insurance in respect of a housing loan where the sum insured does not exceed $124,000,\n> \n> > (j) reinsurance (being a contract or contracts between two parties by which one party indemnifies the other against liability or payment under a contract or contracts of insurance or reinsurance),\n> \n> > (k) an annuity—\n> > \n> > > (i) issued, created or sold by a life company,\n> > \n> > > (ii) purchased by a person from a life company,\n> \n> > (l) insurance under which the class of persons who take out the insurance are liable, or may become liable, under a contract of insurance or by or under an Act, to meet the cost of claims made under policies of insurance issued to members of that class in the event that the insurer is unable to meet the cost of those claims (due to the insolvency of the insurer, a shortfall in the funds available to the insurer to meet the cost of the claims or for any other reason), and which is insurance, or insurance of a class, for the time being approved by the Treasurer for the purposes of this paragraph.\n> \n> general insurance means—\n> \n> > (a) any kind of insurance that is applicable to—\n> > \n> > > (i) property in New South Wales, or\n> > \n> > > (ii) a risk, contingency or event concerning an act or omission that, in the normal course of events, may occur within, or partly within, New South Wales,\n> > \n> > or both, and\n> \n> > (b) insurance that is effected by a third-party policy within the meaning of the [Motor Accidents Compensation Act 1999](/view/html/inforce/current/act-1999-041),\n> \n> but does not include life insurance, a life insurance rider or exempt insurance.\n> \n> insurance intermediary means—\n> \n> > (a) a person who arranges contracts of insurance in New South Wales—\n> > \n> > > (i) for reward, or\n> > \n> > > (ii) as an agent for a person carrying on a business of insurance, or\n> \n> > (b) a financial services licensee (as defined in section 761A of the [Corporations Act 2001](http://www.legislation.gov.au/) of the Commonwealth) whose licence covers arranging contracts of insurance as an agent for a person carrying on a business of insurance, or\n> \n> > (c) a regulated principal (as defined in section 1430 of the [Corporations Act 2001](http://www.legislation.gov.au/) of the Commonwealth) when carrying on business as an insurance broker as authorised by Subdivision D of Division 1 of Part 10.2 of that Act.\n> \n> insurer means a person—\n> \n> > (a) who writes general insurance, and\n> \n> > (b) who does so otherwise than as an insurance intermediary, and\n> \n> > (c) who is authorised to carry on insurance business under the [Insurance Act 1973](http://www.legislation.gov.au/) of the Commonwealth.\n> \n> life insurance means insurance described in section 9 (1) (a)–(g) and 9A of the [Life Insurance Act 1995](http://www.legislation.gov.au/) of the Commonwealth in respect of—\n> \n> > (a) a life or lives, or\n> \n> > (b) any event or contingency relating to or depending on a life or lives,\n> \n> of a person whose principal place of residence is, or persons whose principal places of residence are, in New South Wales at the time the policy that effects the insurance is issued.\n> \n> life insurance rider means insurance that—\n> \n> > (a) is attached to a policy of life insurance, and\n> \n> > (b) adds specified events and contingencies to those insured under the policy, and\n> \n> > (c) is subject to the terms and conditions of the policy.\n> \n> Policyholders Protection Fund means the Policyholders Protection Fund established under section 16B.\n> \n> **s 3:** Am 2001 No 41, Sch 1 \\[1\\]; 2001 No 87, Sch 1 \\[1\\]; 2002 No 26, Sch 2.6 \\[1\\] \\[2\\]; 2005 No 111, Sch 3 \\[1\\]; 2009 No 51, Sch 7.3 \\[1\\]; 2015 No 48, Sch 3.4 \\[1\\].","sortOrder":3},{"sectionNumber":"Part 1A","sectionType":"part","heading":"Abolition of tax","content":"# Part 1A Abolition of tax\n\nPart 1A Abolition of tax\n\n**pt 1A:** Ins 2010 No 46, Sch 5 \\[1\\].","sortOrder":4},{"sectionNumber":"3A","sectionType":"section","heading":null,"content":"#### 3A\n\n3A, 3B (Repealed)","sortOrder":5},{"sectionNumber":"3C","sectionType":"section","heading":"Refunds of tax from Policyholders Protection Fund","content":"#### 3C Refunds of tax from Policyholders Protection Fund\n\n3C Refunds of tax from Policyholders Protection Fund\n\n> > (1) If, at any time after 1 July 2011, the Treasurer determines that any amount standing to the credit of the Policyholders Protection Fund is not needed for payments to the Nominal Defendant’s Fund in accordance with Part 3A, the Treasurer may direct that the amount (the refund amount) be paid from the Policyholders Protection Fund for the purposes of providing a refund to insurers.\n> \n> > (2) The refund amount is to be paid to insurers who pay tax under this Act in respect of the year commencing 1 July 2010.\n> \n> > (3) Each of those insurers is to be paid the relevant proportion of the refund amount.\n> \n> > (4) The relevant proportion is the proportion that the amount of tax paid by the insurer under this Act in respect of the year commencing 1 July 2010 bears to the total amount of tax paid by all insurers under this Act in respect of that year.\n> \n> > (5) The Chief Commissioner is to pay the refund amount to insurers in accordance with this section.\n> \n> **s 3C:** Ins 2010 No 46, Sch 5 \\[1\\]. Am 2024 No 53, Sch 2.4\\[1\\].","sortOrder":7},{"sectionNumber":"Part 2","sectionType":"part","heading":null,"content":"# Part 2\n\nParts 2, 3\n\n4–15 (Repealed)\n\n**pt 2:** Rep 2015 No 48, sec 3 (f).\n\n**pt 2, div 1, hdg:** Am 2001 No 87, Sch 1 \\[2\\]. Rep 2015 No 48, sec 3 (f).\n\n**pt 2, div 1:** Rep 2015 No 48, sec 3 (f).\n\n**s 4:** Am 2001 No 87, Sch 1 \\[3\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 5:** Am 2001 No 87, Sch 1 \\[4\\]–\\[6\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 6:** Subst 2001 No 87, Sch 1 \\[7\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 7:** Rep 2015 No 48, sec 3 (f).\n\n**s 8:** Am 2001 No 87, Sch 1 \\[8\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 9:** Am 2009 No 51, Sch 7.3 \\[2\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 10:** Am 2001 No 87, Sch 1 \\[9\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 11:** Rep 2015 No 48, sec 3 (f).\n\n**pt 2, div 2 (s 11A):** Ins 2001 No 87, Sch 1 \\[10\\]. Rep 2015 No 48, sec 3 (f).\n\n**pt 2, div 3, hdg (previously Part 2, Div 2, heading):** Renumbered 2001 No 87, Sch 1 \\[11\\]. Rep 2015 No 48, sec 3 (f).\n\n**pt 2, div 3 (ss 12, 13):** Rep 2015 No 48, sec 3 (f).\n\n**pt 3 (ss 14, 15):** Rep 2015 No 48, sec 3 (f).","sortOrder":8},{"sectionNumber":"Part 3A","sectionType":"part","heading":"Policyholders Protection Fund","content":"# Part 3A Policyholders Protection Fund\n\nPart 3A Policyholders Protection Fund\n\n**pt 3A, hdg:** Ins 2001 No 41, Sch 1 \\[2\\].","sortOrder":9},{"sectionNumber":"16","sectionType":"section","heading":"Definitions","content":"#### 16 Definitions\n\n16 Definitions\n\n> In this Part—\n> \n> declared insolvent insurer means an insurer to which an order of the Treasurer in force under section 16A relates.\n> \n> Nominal Defendant means the Nominal Defendant within the meaning of the [Motor Accidents Compensation Act 1999](/view/html/inforce/current/act-1999-041).\n> \n> Nominal Defendant’s Fund means the Fund established by section 40 of the [Motor Accidents Compensation Act 1999](/view/html/inforce/current/act-1999-041).\n> \n> third-party policy means a third-party policy within the meaning of Part 7.3 of the [Motor Accidents Compensation Act 1999](/view/html/inforce/current/act-1999-041).\n> \n> **s 16:** Subst 2001 No 41, Sch 1 \\[2\\]. Am 2024 No 53, Sch 2.4\\[2\\].","sortOrder":10},{"sectionNumber":"16A","sectionType":"section","heading":"Declaration of insolvent insurers","content":"#### 16A Declaration of insolvent insurers\n\n16A Declaration of insolvent insurers\n\n> > (1) If the Treasurer is satisfied that a liquidator or provisional liquidator has been appointed in respect of an insurer, or that an insurer has been dissolved, the Treasurer may, by order published in the Gazette, declare that the insurer is a declared insolvent insurer for the purposes of this Part.\n> \n> > (2) The following insurers are taken to have been declared by order under this section to be declared insolvent insurers for the purposes of this Part on 15 March 2001 (the date on which a provisional liquidator was appointed in respect of those insurers)—\n> > \n> > > (a) HIH Casualty and General Insurance Limited,\n> > \n> > > (b) FAI General Insurance Company Limited,\n> > \n> > > (c) CIC Insurance Limited.\n> \n> **s 16A:** Ins 2001 No 41, Sch 1 \\[2\\].","sortOrder":11},{"sectionNumber":"16B","sectionType":"section","heading":"Policyholders Protection Fund","content":"#### 16B Policyholders Protection Fund\n\n16B Policyholders Protection Fund\n\n> > (1) There is established in the Special Deposits Account a Policyholders Protection Fund.\n> \n> > (2) The following is to be paid into the Fund—\n> > \n> > > (a) money appropriated by Parliament to the Fund under section 16C,\n> > \n> > > (b) (Repealed)\n> > \n> > > (c) money required to be paid into the Fund from the Nominal Defendant’s Fund in accordance with section 16G,\n> > \n> > > (d) any gift or bequest of money for the purposes of the Fund,\n> > \n> > > (e) any money appropriated by Parliament for the purposes of the Fund,\n> > \n> > > (f) any other money required by law to be paid into the Fund.\n> \n> > (3) The following is to be paid from the Fund—\n> > \n> > > (a) (Repealed)\n> > \n> > > (b) money required to be paid from the Fund into the Nominal Defendant’s Fund in accordance with section 16E,\n> > \n> > > (c) money to be paid from the Fund into the Consolidated Fund in accordance with section 16H,\n> > \n> > > (ca) money the Treasurer directs to be paid from the Fund for the purposes of providing a refund to insurers in accordance with section 3C,\n> > \n> > > (d) any other money required by law to be paid from the Fund.\n> \n> **s 16B:** Ins 2001 No 41, Sch 1 \\[2\\]. Am 2010 No 46, Sch 5 \\[2\\]; 2024 No 53, Sch 2.4\\[3\\].","sortOrder":12},{"sectionNumber":"16C","sectionType":"section","heading":"Tax to be paid into Policyholders Protection Fund","content":"#### 16C Tax to be paid into Policyholders Protection Fund\n\n16C Tax to be paid into Policyholders Protection Fund\n\n> > (1) There is appropriated by this section for payment out of the Consolidated Fund into the Policyholders Protection Fund all amounts received in payment of tax under this Act.\n> \n> > (2) There is payable out of the Policyholders Protection Fund such amounts as may become payable under this Act by way of refunds of tax.\n> \n> **s 16C:** Ins 2001 No 41, Sch 1 \\[2\\].","sortOrder":13},{"sectionNumber":"16D","sectionType":"section","heading":null,"content":"#### 16D\n\n16D (Repealed)","sortOrder":14},{"sectionNumber":"16E","sectionType":"section","heading":"Application of Policyholders Protection Fund—claims under third-party motor accident policies of insolvent insurers","content":"#### 16E Application of Policyholders Protection Fund—claims under third-party motor accident policies of insolvent insurers\n\n16E Application of Policyholders Protection Fund—claims under third-party motor accident policies of insolvent insurers\n\n> > (1) The Policyholders Protection Fund must be applied to meet expenditure from the Nominal Defendant’s Fund in connection with third-party policies issued by declared insolvent insurers.\n> \n> > (2) All payments made from the Policyholders Protection Fund under this section are to be made in the amounts, on the conditions and at the times determined by the Treasurer.\n> \n> **s 16E:** Ins 2001 No 41, Sch 1 \\[2\\].","sortOrder":16},{"sectionNumber":"16F","sectionType":"section","heading":null,"content":"#### 16F\n\n16F (Repealed)","sortOrder":17},{"sectionNumber":"16G","sectionType":"section","heading":"Repayments to Policyholders Protection Fund—money recovered from motor accident insolvent insurers and re-insurers","content":"#### 16G Repayments to Policyholders Protection Fund—money recovered from motor accident insolvent insurers and re-insurers\n\n16G Repayments to Policyholders Protection Fund—money recovered from motor accident insolvent insurers and re-insurers\n\n> > (1) This section applies in relation to money recovered by the Nominal Defendant—\n> > \n> > > (a) from a re-insurer under section 191 of the [Motor Accidents Compensation Act 1999](/view/html/inforce/current/act-1999-041) in connection with a third-party policy issued by a declared insolvent insurer, or\n> > \n> > > (b) in connection with the winding up of a declared insolvent insurer.\n> \n> > (2) If the Treasurer determines that any money to which this section applies is not needed for payments in connection with third-party policies issued by declared insolvent insurers, the money is to be paid from the Nominal Defendant’s Fund into the Policyholders Protection Fund in accordance with arrangements made between the Treasurer and the Nominal Defendant.\n> \n> **s 16G:** Ins 2001 No 41, Sch 1 \\[2\\].","sortOrder":19},{"sectionNumber":"16H","sectionType":"section","heading":"Policyholders Protection Fund to reimburse additional money advanced from Consolidated Fund","content":"#### 16H Policyholders Protection Fund to reimburse additional money advanced from Consolidated Fund\n\n16H Policyholders Protection Fund to reimburse additional money advanced from Consolidated Fund\n\n> If the Treasurer determines that money standing to the credit of the Policyholders Protection Fund is not needed for payments to the Nominal Defendant’s Fund in accordance with this Part, the Treasurer may pay an amount of money from the Policyholders Protection Fund (up to the amount advanced to the Policyholders Protection Fund by the Treasurer) into the Consolidated Fund.\n> \n> **s 16H:** Ins 2001 No 41, Sch 1 \\[2\\]. Am 2024 No 53, Sch 2.4\\[5\\].","sortOrder":20},{"sectionNumber":"17","sectionType":"section","heading":null,"content":"#### 17\n\n17–23, (Repealed)","sortOrder":21},{"sectionNumber":"24","sectionType":"section","heading":"Regulations","content":"#### 24 Regulations\n\n24 Regulations\n\n> > (1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n> \n> > (2) (Repealed)\n> \n> **s 24:** Am 2015 No 48, sec 3 (f).","sortOrder":23},{"sectionNumber":"Part 4","sectionType":"part","heading":null,"content":"# Part 4\n\nParts 4, 5\n\n25–28 (Repealed)\n\n**pt 4:** Rep 2015 No 48, sec 3 (f).\n\n**pt 5:** Rep 2015 No 48, sec 3 (f).\n\n**s 21:** Rep 2015 No 48, sec 3 (f).\n\n**s 22:** Rep 2015 No 48, sec 3 (f).\n\n**s 23:** Am 2007 No 94, Sch 4. Rep 2015 No 48, sec 3 (f).\n\n**s 25:** Rep 2015 No 48, sec 3 (f).\n\n**s 26:** Rep 2003 No 82, Sch 3.\n\n**s 27:** Ins 2001 No 87, Sch 1 \\[13\\]. Rep 2015 No 48, sec 3 (f).\n\n**s 28:** Ins 2005 No 111, Sch 3 \\[2\\]. Rep 2015 No 48, sec 3 (f).","sortOrder":24},{"sectionNumber":"Schedule 1","sectionType":"schedule","heading":"Savings, transitional and other provisions","content":"# Schedule 1 Savings, transitional and other provisions\n\nSchedule 1 Savings, transitional and other provisions\n\n**sch 1:** Ins 2015 No 48, Sch 3.4 \\[2\\].","sortOrder":25}],"analysis":{"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"The Act’s scope has narrowed since its original tax-imposition design. Many sections that imposed or administered the insurance protection tax have been repealed (see multiple repeal notes). The remaining operative provisions mainly establish and govern the Policyholders Protection Fund, set out how appropriations and recoveries flow into and out of that Fund, permit the Treasurer to declare insurers insolvent and to direct payments for third-party motor accident claims, and provide a limited refund mechanism for insurers who paid tax for the year commencing 1 July 2010 (ss 3C; 16A–16H; Schedule, Part 2, s 2). The Schedule confirms that amendments do not affect liabilities that arose before 1 July 2011, indicating a cut-off in the Act’s original tax-imposition reach (Schedule, Part 2, s 2)."},"complexity_factors":["Extensive cross-references to other statutes (Motor Accidents Compensation Act 1999; Life Insurance Act 1995; Corporations Act 2001; Duties Act 1997) affecting definitions and operating interactions (s 3; s 16).","Large number of repealed sections and parts, leaving a smaller but specialized set of operative provisions (numerous repeal notes throughout the Act).","Concentrated executive discretion for key decisions (Treasurer can declare insolvency, direct Fund payments/refunds/transfers) creating legal and operational uncertainty (ss 16A; 16E(2); 3C; 16H).","Multiple funding flows and counter-flows between the Policyholders Protection Fund, the Nominal Defendant’s Fund and the Consolidated Fund, plus appropriations and recoveries, producing complex cash-management arrangements (ss 16B; 16C; 16G; 16H).","Specific, formulaic refund rule tied to a historical tax year (proportional allocation for year commencing 1 July 2010) which requires record-matching and administrative calculation (s 3C(3)–(4)).","Administrative duties split across offices (Treasurer for directions; Chief Commissioner for payments) requiring inter-agency coordination (s 3C(1), (5))."],"plain_english_summary":"What this law does (mechanics)\n\n- The Act names and defines terms used for an insurance protection tax regime and sets up the Policyholders Protection Fund (the Fund) in the Special Deposits Account (s 1; s 16B).  Many of the original tax-imposition provisions have been repealed; remaining operative mechanics focus on the Fund, declarations of insurer insolvency, how the Fund is paid into and spent, and a limited refund mechanism for insurers (s 3C; ss 16A–16H; s 16C).\n\n- The Fund receives specified money, including amounts appropriated by Parliament and amounts required to be paid into the Fund from the Nominal Defendant’s Fund (s 16B(2)(a), (c), (e)).  Amounts received in payment of tax under this Act are appropriated for payment into the Fund (s 16C(1)).  The Fund can be used to meet payments required by law and, subject to Treasurer directions, to meet expenditure from the Nominal Defendant’s Fund in connection with third-party motor accident policies issued by insurers declared insolvent (s 16B(3)(b); s 16E(1)–(2)).\n\n- The Treasurer can declare an insurer to be a “declared insolvent insurer” if satisfied that a liquidator or provisional liquidator has been appointed or that the insurer has been dissolved (s 16A(1)).  The Treasurer decides amounts, conditions and timing for payments from the Fund under the insolvency-linked provisions (s 16E(2)).\n\n- If the Nominal Defendant recovers money from reinsurers or from winding up a declared insolvent insurer, and the Treasurer determines that the recovered money is not needed for payments in connection with third-party policies of insolvent insurers, that money is to be paid from the Nominal Defendant’s Fund into the Policyholders Protection Fund under arrangements between the Treasurer and the Nominal Defendant (s 16G(1)–(2)).\n\n- When the Treasurer determines Fund balances are not required for payments to the Nominal Defendant’s Fund, the Treasurer may direct refunds from the Policyholders Protection Fund to insurers who paid tax under this Act in respect of the year commencing 1 July 2010.  The refunds must be paid proportionally to each insurer’s share of tax paid for that year, and the Chief Commissioner is to make the payments (s 3C(1)–(5)).  The Treasurer may also direct transfers from the Fund into the Consolidated Fund up to the amount advanced to the Policyholders Protection Fund by the Treasurer (s 16H).\n\nWho this affects\n\n- Insurers and insurance intermediaries are defined and therefore implicated by the Act for historic tax liabilities and for the refund rule (definitions at s 3 and the refund rule at s 3C).  Insurers who paid the insurance protection tax for the year commencing 1 July 2010 are eligible for proportional refunds if the Treasurer directs (s 3C(2)–(4)).\n\n- The Treasurer and the Chief Commissioner have operational control: the Treasurer makes insolvency declarations and payment directions from the Fund (ss 16A, 16E, 16H, 3C(1)); the Chief Commissioner is responsible for paying refunds to insurers under the refund rule (s 3C(5)).  The Nominal Defendant is a source and recipient of Fund flows governed by arrangements with the Treasurer (ss 16B(2)(c), 16G).\n\nWhy it matters (official purpose-claims, tested against mechanics and trade-offs)\n\n- The Act’s remaining operational purpose-claim is to protect third-party claim payments when insurers become insolvent by establishing a Finance/Reserve vehicle (the Policyholders Protection Fund) and giving the Treasurer discretion to apply Fund money to support the Nominal Defendant’s Fund for claims (s 16B; s 16E).  Mechanically, this places an institutional pool under Treasurer control that can be topped by appropriations, transfers from the Nominal Defendant’s Fund, recovered monies from insolvencies/reinsurers, and historically by tax receipts (s 16B(2); s 16G; s 16C).\n\n- The Act also contains a limited mechanism to return surplus Fund money to insurers who paid tax in a specified year (s 3C).  That mechanism is proportional to each insurer’s historical tax contribution and must be implemented by the Chief Commissioner (s 3C(3)–(5)).\n\nCosts, incentives, trade-offs and implementation considerations (source-grounded)\n\n- Who pays and who benefits: historically, tax receipts under this Act were appropriated into the Policyholders Protection Fund (s 16C(1)).  If the Treasurer directs refunds, insurers who paid tax for the 2010 year receive a proportional share of the refunded amount (s 3C).  Parliament can also appropriate money into the Fund (s 16B(2)(a),(e)).  The Act therefore creates potential transfers among taxpayers, insurers and claimants depending on appropriation and refund directions (ss 16B, 16C, 3C).\n\n- Discretion and uncertainty: the Treasurer has broad discretion to declare insolvency, to determine payment amounts/conditions/timing from the Fund for Nominal Defendant expenditure (ss 16A; 16E(2)), and to direct refunds or transfers between the Fund and Consolidated Fund (s 3C(1); s 16H).  That discretion concentrates decision-making in the Treasurer’s office and creates implementation uncertainty about when and how funds will move.\n\n- Compliance and administrative burden: the Chief Commissioner is required to pay refunds if the Treasurer so directs (s 3C(5)), which creates an administrative duty on the revenue authority if a refund occurs.  Insurers bear the historical compliance burden of paying any tax that arose prior to the abolition-related amendments (Schedule, Part 2, s 2).\n\n- Interaction with other statutory schemes: the Fund’s role is connected to the Motor Accidents Compensation Act 1999 (the Nominal Defendant and Nominal Defendant’s Fund) and to Commonwealth statutes for definitions of life insurance, corporations and duties (see s 3 definitions and s 16 definitions).  This cross-referencing requires coordination across regimes when applying insolvency and recovery rules (s 3; s 16).\n\n- Trade-offs and opportunity costs: money in the Fund is earmarked for specific purposes (s 16B(3)).  Appropriations or transferred amounts that support the Nominal Defendant’s Fund or are refunded to insurers are alternative uses; the Treasurer’s directions determine which use occurs (ss 16B(3); 3C(1); 16H).  The Act therefore establishes durability of a resource pool but leaves allocation decisions to executive discretion.\n\nImplementation risk and unintended consequences\n\n- Because the Act leaves key determinations to the Treasurer (insolvency declarations, payment conditions, refund and transfer directions), timing and predictability for insurers, claimants and the Nominal Defendant depend on executive decisions rather than fixed statutory formulas (ss 16A; 16E(2); 3C(1); 16H).\n\n- The proportional refund rule (s 3C(4)) limits refunds to the relative historical tax contributions for the 2010 year; it does not create an entitlement beyond Treasurer direction.  The Chief Commissioner’s role is administrative (s 3C(5)).\n\nKey sections to consult directly: definitions and eligibility (s 3); refund rule (s 3C); Fund establishment and receipts/payments (s 16B); appropriation of tax receipts into the Fund (s 16C); insolvency declaration (s 16A); use of the Fund for third-party motor accident claims (s 16E); recoveries to the Fund (s 16G); reimbursement to Consolidated Fund (s 16H); and the Governor’s regulation power (s 24)."},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":true,"description":"The legislation has transformed from a revenue-raising tax statute into a fund administration and wind-up mechanism. Originally designed to impose and collect insurance taxes in perpetuity, it now exists solely to manage the residual Policyholders Protection Fund, distribute refunds, and handle claims from specific insolvent insurers (HIH, FAI, CIC) from 2001. The scope has narrowed from broad tax administration to targeted historical claims management and fund dissolution."},"complexity_factors":["Extensive repeals: Most operative provisions (sections 4-15, 17-23, 25-28) have been repealed, leaving a fragmented structure","Multiple amendment history: Section 3 (definitions) has been amended 6 times; complex nested definitions for 'exempt insurance' with 12 sub-categories including multi-level bullet points","Cross-references to 8+ external Acts including Commonwealth legislation (Corporations Act 2001, Life Insurance Act 1995, Private Health Insurance Act 2007) and NSW Acts","Temporal complexity: The Act operates differently for different time periods (pre-2011 tax liability vs post-2011 fund management)","Conditional machinery provisions: Sections 16E-16H contain conditional triggers based on Treasurer determinations and fund balance requirements","Savings provisions in Schedule 1 preserving pre-2011 tax liabilities despite repeal of taxing provisions"],"plain_english_summary":"This is the **Insurance Protection Tax Act 2001**, a New South Wales law that originally imposed a tax on insurance premiums but has since been heavily stripped back.\n\n**What it originally did:**\n- From 2001 until 2011, this Act imposed a tax on **general insurance** (car insurance, home insurance, business insurance, etc.) and **life insurance** sold in NSW.\n- The tax was paid by **insurers** (insurance companies), not directly by customers, though it was likely passed on through premiums.\n- The money collected went into a special **Policyholders Protection Fund**.\n\n**What it does now:**\n- The tax itself was **abolished in 2011** (and the taxing provisions were repealed in 2015).\n- The Act now exists mainly to manage the **Policyholders Protection Fund**, which was created after the collapse of major insurers **HIH, FAI and CIC** in 2001.\n- The Fund's purpose is to **protect people who made claims under compulsory third-party (CTP) motor accident policies** issued by those failed insurers.\n- Money in the Fund can be used to:\n  - Pay claims from the Nominal Defendant (the government body that steps in when an insurer can't pay)\n  - Provide **refunds to insurers** who paid the tax in 2010-11, if the Treasurer determines the money isn't needed for claims\n  - Reimburse the government's Consolidated Fund for advances made to the Fund\n\n**Who it affects:**\n- **Insurers** who paid tax in 2010-11 and may be eligible for refunds\n- The **Nominal Defendant** (the government body handling claims from insolvent insurers)\n- Anyone with historical claims against the collapsed HIH, FAI or CIC insurers for motor accidents\n\n**Why it matters:**\nThis Act is essentially a **zombie law** — the tax is dead, but the machinery lives on to clean up the mess from the 2001 insurance collapses and return leftover money to insurers. It shows how governments create special funds to protect policyholders when insurance companies go bust."},"summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"Based on the number of amendments (9 versions across 23 years) and the involvement of three different ministerial portfolios — including Work Health and Safety — it is likely the Act's scope has evolved beyond its original focus. The inclusion of the Minister for Work Health and Safety suggests the Act now touches workers' compensation or workplace insurance arrangements, which may not have been a primary concern when it was first enacted in 2001. However, without the full text of the Act, this assessment is based on structural indicators rather than a direct comparison of provisions."},"complexity_factors":["The document provided is largely metadata and website navigation rather than the substantive text of the Act itself, making full analysis difficult","The Act has been amended at least 9 times over 23 years, suggesting accumulated layers of complexity in the operative provisions","Three separate Ministers share responsibility, indicating cross-portfolio regulatory complexity","Insurance taxation involves specialist concepts blending tax law, insurance regulation, and insolvency law","The Act interacts with broader insurance protection schemes which require understanding of related legislation","NSW-specific tax rules may differ from federal insurance taxation frameworks, requiring knowledge of both"],"plain_english_summary":"## Insurance Protection Tax Act 2001 (NSW)\n\n**What is this?**\nThis is a NSW State law that imposes a special tax called the **Insurance Protection Tax** on certain insurance policies. It was originally created in 2001 and has been updated multiple times since.\n\n**Who does it affect?**\n- **Insurers** (insurance companies) operating in NSW who are required to pay this tax\n- **Policyholders** (people and businesses who buy insurance) — the cost may ultimately be passed on to you through your premiums\n\n**Why does it exist?**\nThe tax was introduced to fund a protection scheme for people who held insurance policies with insurers that became insolvent (went broke and couldn't pay out claims). Think of it as a safety-net funding mechanism — if your insurer collapsed, there needed to be money available to cover claims.\n\n**What should I know?**\n- This is a **NSW-specific tax**, not a federal one\n- It has been amended **multiple times** between 2001 and 2024, suggesting the rules around who pays, how much, and on what types of insurance have evolved significantly\n- It is overseen by the **Treasurer**, the **Minister for Work Health and Safety**, and the **Minister for Customer Service and Digital Government** — reflecting its overlap between financial regulation and workplace insurance\n- The current version has been in force since **20 August 2024**\n\n**Bottom line:** If you're an insurer in NSW, this law creates tax obligations you must comply with. If you're an ordinary policyholder, this tax likely affects your premium costs indirectly but you won't deal with it directly."},"issue_detection":{"absurdities":[],"contradictions":[]}},"importantCases":[],"_links":{"self":"/api/acts/insurance-protection-tax-act-2001","history":"/api/acts/insurance-protection-tax-act-2001/history","analysis":"/api/acts/insurance-protection-tax-act-2001/analysis","conflicts":"/api/acts/insurance-protection-tax-act-2001/conflicts","importantCases":"/api/acts/insurance-protection-tax-act-2001/important-cases","documents":"/api/acts/insurance-protection-tax-act-2001/documents"}}