Assets must be held by Category C insureAssets must be held by Category C insurer’s custodian or agent in Australia

Assets must be held by Category C insurer’s custodian or agent in Australia

25. Subject to paragraph 27, an asset of a Category C insurer is excluded from being an asset in Australia unless it is held for the Category C insurer by either:

(a) a custodian where:

(i) the legal title is held in a way specified in paragraph 18(a) or (b);

(ii) the conditions in paragraphs 19(a) to (l) are complied with[13]; and

(iii) under the external custody agreement, only the agent in Australia of the Category C insurer may give directions (either directly or via a delegated authority to another person as provided for in paragraph 29) to the custodian permitting or requiring any disposal of assets;[14] or

(b) the Category C insurer’s agent in Australia (on trust for the Category C insurer).

26. Nothing in paragraph 25(a)(iii) precludes a Category C insurer from requiring a co-signatory, who need not reside in Australia, to also authorise a direction to the custodian permitting or requiring disposal of an asset. However, where there is a co-signatory, the requirement in paragraph 25(a)(iii) will be taken to be met only if:

(a) the agent in Australia maintains control of the assets in Australia by being the only entity with authority to deal with the custodian directly;

(b) the requirement for a co-signatory is an arrangement agreed upon between the Category C insurer and the agent in Australia;

(c) the external custody agreement recognises only the authority of the agent in Australia to give directions to the custodian; and

(d) the agent in Australia does not delegate to the co-signatory its authority to give directions to the custodian; and

(e) the co-signatory:

(i) is appointed by the Category C insurer;

(ii) is not a disqualified person as defined in section 25 of the Act; and

(iii) meets the fitness and propriety criteria for responsible persons under Prudential Standard CPS 520 Fit and Proper (CPS 520).

27. Paragraph 25 does not apply to the following assets of a Category C insurer:

(a) real property in Australia;

(b) premiums receivable due to the Category C insurer provided that any premiums receivable outstanding for more than six months from the date when the premiums receivable became due and payable is excluded from being as asset in Australia; and

(c) cash held in the Category C insurer’s bank account in Australia provided that any withdrawal from the bank account requires authorisation by the Category C insurer’s agent in Australia.