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

22. Subject to paragraph 24, 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 a way specified in paragraph 16(a) or (b); and

(ii) the conditions in paragraphs 17(a) to (l) are complied with[14] (subject to paragraphs 36 and 37); 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 26) to the custodian permitting or requiring any disposal of assets;[15] or

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

23. Nothing in paragraph 22(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 22(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; and

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

(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 GPS 520 Fit and Proper.

24. Paragraph 22 does not apply to the following assets of a Category C insurer:

a) real property in Australia;

b) premium receivables due to the Category C insurer provided that any premium receivable outstanding for more than six months from the date when the premium 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.

25. For the purposes of paragraph 24(c), bank account in Australia means a bank account maintained with an authorised deposit-taking institution[16] in Australia under the terms of which deposits are:

(a) at call; or

(b) term deposits of no more than six months duration.

26. For the purposes of paragraphs 22 to 25 and 27 to 34, an agent in Australia may delegate authority to carry out acts for a Category C insurer (other than holding property on trust for a Category C insurer under paragraph 22(b)) to one or more persons (delegates) provided that every delegate:

a) is an individual who resides in Australia;

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

c) meets the fitness and propriety criteria for responsible persons under Prudential Standard GPS 520 Fit and Proper.[17]

Any reference in this Prudential Standard to authorisation by an agent in Australia includes authorisation by a delegate.