38Broker to notify insured of association with insurer

##### 38 Broker to notify insured of association with insurer (1) Where: (a) an insurance broker, or a director, employee or agent of an insurance broker, proposes to arrange or effect a contract of insurance; and (b) a proposed insurer under the proposed contract is associated with the insurance broker; the insurance broker shall: (c) subject to paragraph (d), inform the intending insured, before the proposed contract is arranged or effected, of the existence and nature of the association; or (d) if it is not practicable for the broker to comply with paragraph (c) in relation to the proposed contract, inform the insured, as soon as is reasonably practicable after the contract has been arranged or effected, of the existence and nature of the association. (2) An insurance broker shall be taken to be associated with an insurer for the purposes of this section if: (a) the insurance broker, or a director, employee or agent of the insurance broker or of a corporation that is related to the insurance broker, is a director or employee of the insurer or of a corporation that is related to the insurer; (b) the insurer, or a director, employee or agent of the insurer or of a corporation that is related to the insurer, is a director or employee of the insurance broker or of a corporation that is related to the insurance broker; (c) the insurance broker or a corporation that is related to the insurance broker, or a director of the insurance broker or of such a corporation, has a beneficial interest in any share or stock in the capital of the insurer or of a corporation that is related to the insurer; or (d) the insurer or a corporation that is related to the insurer, or a director of the insurer or of such a corporation, has a beneficial interest in any share or stock in the capital of the insurance broker or of a corporation that is related to the insurance broker. (3) The question whether corporations are related to each other for the purposes of this section is determined in the same way as the question whether bodies corporate are related bodies corporate would be determined under Division 6 of Part 1.2 of Chapter 1 of the Corporations Act 2001 if, in section 46 of that Act: (a) the reference to a body corporate that is in a position to cast, or control the casting of, more than one‑half of the maximum number of votes that might be cast at a general meeting of another body corporate were a reference to a body corporate that is in a position to cast, or control the casting of, more than one‑quarter of that number of votes; and (b) the reference to a body corporate holding more than one‑half of the issued share capital of another body corporate were a reference to a body corporate holding more than one‑quarter of the issued share capital of another body corporate. (4) This section has effect notwithstanding anything in the Insurance Act 1973 or the Life Insurance Act 1995. (5) This section has effect only after the expiration of 6 months after the commencement of Part III or, in an external Territory to which this Act extends, only after the expiration of 6 months after the commencement of the day on which this Act commences to extend to that Territory or the commencement of Part III, whichever is the later. Penalty: 60 penalty units.