62ZOAConsequences of inability or failure of general insurer etc. to meet certain requirements

#### 62ZOA Consequences of inability or failure of general insurer etc. to meet certain requirements Appointment of administrator or control by APRA (1) APRA may take control of a general insurer’s business or appoint an administrator to take control of the general insurer’s business if both of the following requirements are met: (a) APRA is satisfied of the matters of which the Federal Court is required to be satisfied for the purposes of section 62L or 62M; (b) subsection (2) applies. (2) This subsection applies if APRA is satisfied that at least one of the following situations exists: (a) both: (i) an AFS statutory manager has taken control of a body corporate under this Act, the Banking Act 1959 or the Life Insurance Act 1995 (or APRA intends for that to occur); and (ii) the general insurer and the body corporate are related bodies corporate; (b) both: (i) the general insurer’s financial position is deteriorating rapidly, or is likely to deteriorate rapidly; and (ii) failure to respond quickly to the deterioration would be likely to prejudice the interests of policyholders of the insurer; (c) it is likely that the insurer will be unable to carry on insurance business in Australia consistently with the stability of the financial system in Australia; (d) an external administrator has been appointed to a holding company of the general insurer (or a similar appointment has been made in a foreign country in respect of such a holding company), and the appointment poses a significant threat to: (i) the operation or soundness of the general insurer; or (ii) the interests of policyholders of the general insurer; or (iii) the stability of the financial system in Australia; (e) if the general insurer is a foreign general insurer: (i) an application for the appointment of an external administrator of the foreign general insurer, or for a similar procedure in respect of the foreign general insurer, has been made in a foreign country; or (ii) an external administrator has been appointed to the foreign general insurer, or a similar appointment has been made in respect of the foreign general insurer, in a foreign country. (3) APRA may take any of the actions mentioned in subsection (4) in relation to a body corporate (the target body corporate) if: (a) the target body corporate is a body corporate that is any of the following: (i) an authorised NOHC of a general insurer (the relevant general insurer); (ii) a subsidiary of an authorised NOHC of a general insurer (also the relevant general insurer); (iii) a subsidiary of a general insurer (also the relevant general insurer); and (b) the condition in subsection (5), (6) or (7) is satisfied; and (c) the target body corporate is incorporated in Australia; and (d) the target body corporate is not a body corporate of a kind specified in regulations (if any) made for the purposes of this paragraph. (4) The actions are as follows: (a) taking control of the business of the target body corporate; (b) appointing an administrator to take control of the business of the target body corporate. (5) The condition in this subsection is satisfied if: (a) either: (i) an Insurance Act statutory manager has taken control of the relevant general insurer; or (ii) the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant general insurer, and APRA intends that an Insurance Act statutory manager will take control of the relevant general insurer; and (b) APRA considers that the target body corporate provides services that are, or conducts business that is, essential to the capacity of the relevant general insurer to maintain its operations. (6) The condition in this subsection is satisfied if: (a) either: (i) an Insurance Act statutory manager has taken control of the relevant general insurer; or (ii) the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant general insurer, and APRA intends that an Insurance Act statutory manager will take control of the relevant general insurer; and (b) APRA considers that it is necessary for an Insurance Act statutory manager to take control of the target body corporate, in order to facilitate the resolution of any of the following: (i) the relevant general insurer; (ii) an authorised NOHC of the relevant general insurer; (iii) a relevant group of bodies corporate of which the relevant general insurer is a member; (iv) a particular member or particular members of such a group. (7) The condition in this subsection is satisfied if: (a) there is an external administrator of the target body corporate, or APRA considers that, in the absence of external support: (i) the target body corporate may become unable to meet its obligations; or (ii) the target body corporate may suspend payment; and (b) APRA considers that it is necessary to take an action mentioned in subsection (4) in respect of the target body corporate in order to enable the relevant general insurer to maintain its operations, or in order to facilitate the resolution of any of the following: (i) the relevant general insurer; (ii) an authorised NOHC of the relevant general insurer; (iii) a relevant group of bodies corporate of which the relevant general insurer is a member; (iv) a particular member or particular members of such a group. (8) If: (a) APRA is in control of a body corporate’s business under this Subdivision—APRA is the Insurance Act statutory manager of the body corporate; or (b) an administrator appointed by APRA is in control of a body corporate’s business under this Subdivision—the administrator is the Insurance Act statutory manager of the body corporate. > Note: This section and other provisions relating to statutory management do not apply to the aspects described in subsection 62ZVA(1) of the business and management of a foreign general insurer. (9) If APRA appoints 2 or more Insurance Act statutory managers of a body corporate, or appoints one or more additional Insurance Act statutory managers of a body corporate: (a) the functions and powers under this Act of an Insurance Act statutory manager of the body corporate may be performed or exercised by: (i) all of the Insurance Act statutory managers of the body corporate acting jointly; or (ii) each of the Insurance Act statutory managers of the body corporate acting individually (except to the extent (if any) specified in a notice given by APRA under paragraph (b)); and (b) at the time of appointment, APRA may give all of the Insurance Act statutory managers of the body corporate a notice in writing for the purposes of subparagraph (a)(ii), specifying limits or conditions on their ability to perform functions and exercise powers individually; and (c) treat a reference in this Act to an Insurance Act statutory manager as being a reference to whichever one or more of those Insurance Act statutory managers the case requires.