73FAPRA’s power to give management capital directions to particular life companies

73F APRA’s power to give management capital directions to particular life companies

(1) If, having regard to such matters as APRA considers relevant, APRA is satisfied that there are reasonable grounds for believing that the financial position of a life company does not reflect an appropriate capital commitment, outside the statutory funds of the company, to the life insurance business of the company, APRA may, with the Treasurer’s agreement, give the company written directions under this subsection. (2) If, having regard to:

(a) the nature of the obligations of a life company relating to any business it carries on that is not life insurance business; or

(b) the nature and extent of the risks undertaken in respect of any business of a life company that is not life insurance business; or

(c) the nature or value of the assets of a life company that are not assets of a statutory fund of the life company; or

(d) any other matter that APRA considers relevant;

APRA is satisfied that there are reasonable grounds for believing that the life company may not be able to meets its obligations in respect of any business it carries on that is not life insurance business as those obligations fall due, APRA may, with the Treasurer’s agreement, give the company written directions under this subsection. (3) APRA may give a direction to a company under subsection (1) or (2) even if, when the direction is given, the company meets the requirements of the management capital standard and there are reasonable grounds for believing that the company will meet those requirements at all times while the direction is in force. (4) A life company must comply with a direction given to it under subsection (1) or (2). (5) Subject to subsections (6), (7) and (8), a direction remains in force for 12 months commencing on the day on which the direction is given. However, nothing prevents APRA from giving a further direction to the company to take effect immediately after the expiry of a previous direction. (6) If APRA thinks that a particular direction is no longer required or that it should be varied, APRA must, by written notice given to the company, revoke or, with the Treasurer’s agreement, vary the direction. (7) If a company to which a direction has been given asks APRA, in writing, to revoke or vary the direction, APRA must:

(a) if APRA thinks, and the Treasurer agrees, that the direction is no longer necessary or should be varied—revoke or vary the direction; or

(b) in any other case—refuse to revoke or vary the direction.

(8) APRA must give the company written notice of a decision made under subsection (7). (9) A direction to a company ceases to have effect if an order is made for the winding‑up of the company. (10) In this section: