49AAdditional duty of auditors and actuaries to give information

#### 49A Additional duty of auditors and actuaries to give information Persons to whom requirements apply (1) This section applies to a person who is or was an auditor or actuary of: (a) a general insurer; or (b) an authorised NOHC; or (c) a subsidiary of a general insurer or authorised NOHC. Matters requiring immediate notice (2) If the person has reasonable grounds for believing that: (a) the insurer, NOHC or subsidiary is insolvent, or there is a significant risk that it will become insolvent; or (d) an existing or proposed state of affairs may materially prejudice the interests of: (i) in the case of an auditor or actuary of a general insurer or of a subsidiary of a general insurer—the insurer’s policyholders; or (ii) in the case of an auditor or actuary of an authorised NOHC or of a subsidiary of an authorised NOHC—the policyholders of any general insurer who is a subsidiary of the NOHC; or (e) the general insurer, NOHC or subsidiary: (i) has contravened this Act or any other law; and (ii) the contravention is of such a nature that it may affect significantly the interest of policyholders of the general insurer or of a general insurer that is a subsidiary of the NOHC; the person must immediately notify APRA in writing of the matter. Offences in relation to matters requiring immediate notice (3) A person commits an offence if the person contravenes subsection (2). Penalty: Imprisonment for 6 months, or 100 penalty units, or both. (4) A person commits an offence if the person contravenes subsection (2). This is an offence of strict liability. Penalty: 60 penalty units. > Note 1: For strict liability, see section 6.1 of the Criminal Code. > Note 2: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. Defence in relation to matters requiring immediate notice (5) Subsections (3) and (4) do not apply to a person in relation to a matter referred to in subsection (2) if: (a) the person becomes aware of the matter because the person is informed of it by a director or senior manager of the insurer, NOHC or subsidiary; and (b) the director or senior manager informs the person that the insurer, NOHC or subsidiary has notified APRA in writing of the matter; and (c) the person has no reason to disbelieve the director or senior manager. > Note: The defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code. Matters requiring notice as soon as practicable (6) If the person has reasonable grounds for believing: (a) any of the following: (i) the insurer, NOHC or subsidiary has failed or will fail to comply with the prudential standards; (ii) in the case of an insurer—the insurer has failed or will fail to comply with a condition of its authorisation under section 12; (iii) in the case of an authorised NOHC—the NOHC has failed or will fail to comply with a condition of its authorisation under section 18; (iv) the insurer, NOHC or subsidiary has failed or will fail to comply with a requirement or direction under this Act, a requirement under the Financial Sector (Collection of Data) Act 2001 or a requirement of the Financial Accountability Regime Act 2023; and (b) that the failure is or will be significant (see subsection (7)); the person must give APRA a written report about the failure as soon as practicable, and in any case no later than 10 business days. (7) For the purposes of paragraph (6)(b), a failure to comply is or will be significant if the failure to comply is or will be significant having regard to any one or more of the following: (a) the number or frequency of similar failures; (b) the impact the failure has or will have on the insurer’s, NOHC’s or subsidiary’s ability to conduct its business; (c) the extent to which the failure indicates that the insurer’s, NOHC’s or subsidiary’s arrangements to ensure compliance with this Act or with the prudential standards might be inadequate; (d) the actual or potential financial loss arising or that will arise from the failure: (i) in the case of an insurer—to the policy holders of the insurer; or (ii) to the insurer, NOHC or subsidiary; (e) any matters prescribed by the regulations for the purposes of this paragraph. Offences in relation to matters requiring notice as soon as practicable (8) A person commits an offence if the person contravenes subsection (6). Penalty: Imprisonment for 6 months, or 100 penalty units, or both. (9) A person commits an offence if the person contravenes subsection (6). This is an offence of strict liability. Penalty: 60 penalty units. > Note: For strict liability, see section 6.1 of the Criminal Code. Defence if failure already notified (10) Subsections (8) and (9) do not apply to a person in relation to a failure to comply referred to in subsection (6) if: (a) a director or senior manager of the insurer, NOHC or subsidiary informs the person that the insurer, NOHC or subsidiary has informed APRA in writing of the failure; and (b) the person has no reason to disbelieve the director or senior manager. > Note: The defendant bears an evidential burden in relation to the matters in subsection (10). See subsection 13.3(3) of the Criminal Code. Offence in relation to subsections (5) and (10) (11) A person commits an offence if: (a) the person is a director or senior manager of a general insurer, an authorised NOHC or a subsidiary of a general insurer or authorised NOHC; and (b) the person knows that there are reasonable grounds for believing a thing referred to in subsection (2) or (6); and (c) the person informs an auditor or the actuary of the insurer, NOHC or subsidiary that the insurer, NOHC or subsidiary has informed APRA in writing of the thing; and (d) the insurer, NOHC or subsidiary has not done so. Penalty: Imprisonment for 12 months.