Other cases of foreign assets held throuOther cases of foreign assets held through intermediate entities

Other cases of foreign assets held through intermediate entities

35. Where:

(a) but for this paragraph, an asset would be treated as an asset in Australia of an insurer; and

(b) that asset relates to an interest (underlying interest) which is held through one or more interposed entities (including, without limitation, trusts or companies, or a combination thereof); and

(c) the underlying interest would not be an asset in Australia (either because it would be excluded under another provision of this Prudential Standard or because it would not otherwise be an asset in Australia within the meaning of paragraph 28(a) of the Act) if the underlying interest were held directly by the insurer (or, in the case of a Category C insurer, if held directly by the Category C insurer’s custodian or agent in Australia)

then APRA may, having regard to the risk that the proceeds of the underlying interest may not be available in a winding up of the insurer in Australia, determine, in writing, that the amount is excluded from being an asset in Australia.

Transition

36. Where an insurer has in place an external custody agreement that:

(a) pre-dates the effective date of this Prudential Standard; and

(b) cannot be varied without undue difficulty,

it may apply to APRA to have the agreement treated as complying with either or both of paragraphs 17 (a) and (j). APRA may grant approval in writing in respect of such an application and may subject the approval to conditions and limit the period for which the approval applies.

37. Any transitional relief granted under paragraph 15 of Prudential Standard GPS 120 Assets in Australia made on 25 September 2006 continues in effect until the date of expiry specified by APRA when granting the relief, or such other date as APRA may specify in writing.

Determinations made under previous GPS 120

38. An approval, determination, direction or requirement made by APRA under a provision specified in Column 1 of the following table that is in operation immediately prior to the commencement of this Prudential Standard is taken, on and from the effective date, to have been made under the provision of this Prudential Standard specified in the same row of Column 2 of the table.