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

Other cases of foreign assets held through intermediate entities

27. Where:

(a) but for this paragraph, an amount representing 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 amount representing the underlying interest would not be an asset in Australia (either because it was excluded under some other part 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 foreign insurer, if held directly by the foreign 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.

Attachment A

Transition provisions

An insurer may apply to APRA for exemption from compliance with any of the particular requirements of this Prudential Standard. APRA may grant an exemption for a period ending no later than 31 March 2007. APRA cannot exercise this discretion if it is satisfied that the failure of the insurer to be able to comply by the effective date is principally due to the inaction of the Board or management in making adequate preparations to comply with this Prudential Standard.

APRA may only grant an exemption where:

(a) the insurer has submitted the application to APRA at least 20 business days before the effective date;

(b) the insurer can demonstrate that, since the date on which this Prudential Standard was determined, it has been taking reasonable actions to ensure that it will be in a position to comply with this Prudential Standard by the effective date; and

(c) the insurer can demonstrate that since the date on which this Prudential Standard was determined, one of the following issues has given rise to the inability of the insurer to comply with this Prudential Standard by the effective date:

(i) an event has occurred, after this Prudential Standard was determined and outside the insurer’s control, that has led to it being in a position where it cannot comply with this Prudential Standard by the effective date; or

(ii) for a foreign insurer, it cannot comply with this Prudential Standard by the effective date due to delays caused, after this Prudential Standard was determined, by home country regulatory issues relating to a significant demonstrable inconsistency between this Prudential Standard and legal requirements imposed by its home country regulator.