Life Insurance Act 1945

Division 1.—Registration.

Persons other than companies not to carry on business.

14. A person, other than a company, shall not, after the expiration of six months from the commencement of this Act, carry on any class of life insurance business in Australia except on behalf of a company registered under this Act.

Companies not to carry on business unless registered.

15.—(1.) A company, other than a company carrying on life insurance business in Australia immediately prior to the commencement of this Act, shall not carry on any class of life insurance business in Australia unless it has been registered by the Commissioner.

(2.) A company carrying on life insurance business in Australia immediately prior to the commencement of this Act shall not, at any time after the expiration of six months from the commencement of this Act, carry on any class of life insurance business in Australia unless it has been registered by the Commissioner.

Penalty: Two thousand pounds and, in addition, Five hundred pounds for each day on which business is carried on in contravention of this section.

Certain transactions not to be deemed carrying on business.

16.—(1.) A person or company shall not be deemed to carry on any class of life insurance business by reason only—

(a) of collecting renewal premiums under a policy in respect of that class of business issued outside Australia to a person resident outside Australia at the date of issue of the policy; or

(b) of making payments due under any such policy.

(2.) Subject to the last preceding sub-section, a person or company receiving premiums or proposals in respect of life insurance business shall be deemed to be carrying on the class of life insurance business to which the premiums or proposals relate.

(3.) When a company has ceased to issue policies in respect of any class of life insurance business in Australia, it shall, unless the Commissioner is satisfied that reasonable provision has been made for its liability in respect of policies of that class previously effected, be deemed to carry on that class of business.

Application for registration.

17.—(1.) Any company may make application to the Commissioner for registration under this Act.

(2.) The application shall be in writing, shall be signed by a director and by the principal officer of the company, and shall specify—

(a) the situation of the head office of the company;

(b) the names of the directors and of the auditors, and the name and address of the principal officer, of the company;

(c) the name of the actuary (if any) of the company;

(d) in the case of a company carrying on life insurance business in Australia immediately prior to the commencement of this Act, the States and Territories of the Commonwealth and the countries outside Australia in which it carries on that business;

(e) in the case of a foreign company, the countries outside Australia in which the company carries on life insurance business; and

(f) the classes of life insurance business undertaken or to be undertaken by the company.

(3.) The application shall be accompanied by—

(a) a copy of the instruments constituting the company;

(b) a copy of the articles of association or other rules of the company;

(c) a copy of the latest revenue account and balance-sheet of the company and a copy of the latest valuation report upon the financial position of the company; and

(d) in the case of a company having shareholders, a statement showing the nominal, subscribed and paid-up capital of the company and the amount of capital which has been paid in cash,

certified by the principal officer of the company to be true and correct.

Registration of companies carrying on business prior to commencement of Act.

18. Every company carrying on life insurance business in Australia immediately prior to the commencement of this Act shall, within three months after the commencement of this Act, make application in accordance with the last preceding section to the Commissioner for registration and, subject to this Act, the Commissioner shall, within three months after the receipt of the application, if satisfied that the application is in accordance with the provisions of this Act, register the company.

Registration of other companies.

19. The Commissioner may, on receipt of an application for registration from a company (not being a company carrying on life insurance business in Australia immediately prior to the commencement of this Act)—

(a) subject to this Act, register the company: or

(b) with the approval of the Treasurer, refuse to register the company.

Compliance with provisions as to deposits.

20. A company shall not be registered unless the Commissioner is satisfied that the company has complied with such of the provisions of Division 2 of this Part as are applicable to it.

Foreign company to appoint principal officer.

21. A foreign company shall not be registered unless it has appointed some person resident in Australia to be its principal officer and has informed the Commissioner in writing of the name and address of that person.

Certificate of registration.

22. The Commissioner shall furnish to every company registered under this Act a certificate that the company has been so registered, and the certificate shall in all courts be prima facie evidence that the company specified in the certificate has been so registered.

Notification of change in particulars. &c.

23. If, subsequent to the registration of any company under this Act, any change takes place in the particulars specified in the application of the company for registration or in the particulars of the information or documents required to accompany the application, the company shall, within such time as is prescribed, notify the Commissioner in writing of the change.

Division 2.—Deposits.

Prior deposits under State Acts.

No. 4. 1932, s. 7.

24.—(1.) Where, at the commencement of this Act, any amount or security is, in pursuance of any State Act specified in section eight of this Act, held by a State or by an authority of a State by way of

deposit on account of a company carrying on life insurance business, the State or authority shall forthwith pay the amount, or transfer the security, to the Treasurer.

(2.) Any amount or security on account of a company which is paid or transferred to the Treasurer in compliance with the last preceding sub-section shall, to the extent of the deposit required to be lodged by that company under this Act, be held by the Treasurer as, or as part of, the deposit so required.

Deposit under Insurance Act 1932–1937.

25. Any deposit lodged with the Treasurer in pursuance of the Insurance Act 1932–1937 by a company in respect of life insurance business and held by the Treasurer immediately prior to the commencement of this Act shall thereafter continue to be held by the Treasurer as, or as part of, the deposit required to be lodged by that company under this Act.

Deposits by existing companies.

No. 4, 1932, s. 12.

26.—(1.) Subject to this Act, a company carrying on life insurance business in Australia immediately prior to the commencement of this Act shall deposit with the Treasurer money or approved securities or both to the value of Fifty thousand pounds.

(2.) Where a company carrying on life insurance business in Australia immediately prior to the commencement of this Act satisfies the Commissioner that its net liability, as ascertained at the latest actuarial valuation, in respect of that business is less than Two hundred and fifty thousand pounds, the company shall deposit with the Treasurer money or approved securities or both to the value of One thousand pounds for every Five thousand pounds of the amount which, in the opinion of the Commissioner, is the net liability of the company.

(3.) Where a deposit lodged under the last preceding sub-section is less than Fifty thousand pounds, the amount deposited shall be increased, within nine months after the date as at which each and every subsequent actuarial valuation is made, by One thousand pounds in respect of every Five thousand pounds by which the net liability of the company disclosed at that valuation exceeds the amount of the net liability taken into account in fixing the amount of its aggregate deposits previously lodged under this Act, until the amount deposited reaches Fifty thousand pounds.

Deposit in case of foreign company.

Ibid. s. 12

27. A foreign company not carrying on life insurance business in Australia immediately prior to the commencement of this Act shall, before carrying on that business in Australia, deposit with the Treasurer, money or approved securities or both to the value of Fifty thousand pounds.

Deposit in case of new life insurance companies.

Ibid. s. 13

28.—(1.) A company incorporated in Australia (whether before or after the commencement of this Act) not carrying on life insurance business in Australia immediately prior to the commencement of this Act shall, before carrying on life insurance business in Australia, deposit with the Treasurer money or approved securities or both to the value of Five thousand pounds.

(2.) The company shall thereafter deposit annually with the Treasurer money or approved securities or both to the value of Five thousand pounds, until the deposit reaches the value of Fifty thousand pounds:

Provided that in the case of a company having no shareholders the annual deposit under this sub-section shall be One thousand pounds until the deposit reaches the value of Fifty thousand pounds:

Provided further that the aggregate amount deposited shall not at any time be less than the aggregate amount which would be required by this Act to be deposited if the company had been carrying on life insurance business in Australia immediately prior to the commencement of this Act.

Investment of sums deposited.

No. 4, 1932, s. 18.

29. Every sum of money deposited by a company in pursuance of this Act shall be invested by the Treasurer in such approved securities as the company selects or, in default of selection within fourteen days after the deposit has been made, in such approved securities as the Treasurer determines.

Deposits port of assets of company.

30. All deposits by a company in pursuance of this Act shall be deemed to form part of the assets of the company, and all interest accruing due on the deposits or the securities in which they are for the time being invested shall be paid to the company.

Certificate as to nature and extent of deposit.

Ibid. s. 19.

31. The Secretary to the Department of the Treasury, shall, on demand by a company, furnish to the company a certificate in writing, setting out the nature and extent of any deposit held by the Treasurer under this Act in respect of the company together with particulars of the securities (if any) forming the whole or part of the deposit.

Deposits by companies acquiring business of other companies.

Ibid. s. 14.

32. If the Commissioner is satisfied that any company has acquired the life insurance business of any other company, a deposit by the acquiring company to the extent which would be required of that company by this Act if it carried on the business of that other company in addition to its own business shall, if the Commissioner so certifies, be a sufficient compliance with the requirements of this Division.

Increase of deposit where securities have depreciated.

Ibid. s. 20.

33.—(1.) If the Treasurer is satisfied that by reason of depreciation in the value of securities or other cause the value of money and approved securities deposited by a company with him falls short of the value required by this Act, he may, by notice in writing, require the company to deposit with him money or approved securities or both to a value deemed by him to be sufficient to bring the amount of the deposit to the value required by this Act.

(2.) A notice under this section shall not be issued until after the Treasurer has given an opportunity to the company to be heard in connexion with the matter.

(3.) Any company which fails to deposit with the Treasurer money or approved securities or both as required by him under this section shall be guilty of an offence.

Deposits to be security to policy owners.

No. 4, 1932, s. 21.

34.—(1.) Where in pursuance of Division 3 of this Part a company establishes and maintains one statutory fund only, the amount of the deposit lodged by the company under this Act shall, subject to this Act, be and remain as a security for the discharge of the liabilities of that statutory fund in respect of policies.

(2.) Where in pursuance of Division 3 of this Part a company establishes and maintains more than one statutory fund, then in respect of every such statutory fund such portion of the amount of that deposit as the company with the approval of the Commissioner determines shall, subject to this Act, be and, remain as a security for the discharge of the liabilities of that statutory fund in respect of policies.

(3.) The amount or the portion of the amount of any such deposit which is a security for the payment of liabilities of a statutory fund in respect of policies shall not be applicable in the discharge of any other liabilities of the company until the first-mentioned liabilities have been discharged or otherwise provided for to the satisfaction of the Commissioner.

Responsibility for lost securities.

Ibid. s. 23

35. If any money or securities held by the Treasurer as, or as part of, the deposit required to be lodged by a company under this Act are, while so deposited, lost, stolen, destroyed or damaged, the injury occasioned to all persons interested in the moneys or securities shall be made good out of moneys to be appropriated by the Parliament for the purpose.

Substitution of deposits.

Ibid. s. 26

36.—(1.) A company may at any time substitute for any security held by the Treasurer as, or as part of, the deposit required to be lodged by the company under this Act any other approved security, but so that the total amount then deposited is not less than the amount required by this Act and any security so substituted shall be subject to the same charge or liability as the security withdrawn.

(2.) Any company which makes any such substitution shall be entitled to obtain from the Secretary to the Department of the Treasury, and the Secretary shall issue to the company, a certificate in writing of the substitution so made and a receipt for the substituted security, and the company shall lodge the certificate with the Commissioner.

(3.) Where a company ceases to carry on life insurance business in Australia, the Treasurer may permit the withdrawal of the whole of the money or securities held by him as the deposit required to be lodged by the company under this Act or such portion of the money or securities as he considers reasonable having regard to the liabilities of the company under policies registered by the company in Australia.

Division 3.—Statutory Funds.

Establishment of statutory funds.

Eng. Bill 1927, Cl. 3.

37.—(1.) Every company shall, subject to this section, establish, as at the date of the commencement of its financial year next after the commencement of this Act or as at the date on which it commences to carry on life insurance business in Australia, whichever is the later, and shall maintain, a statutory fund, under an appropriate name, in respect of the life insurance business carried on by it.

(2.) A company may establish and maintain a separate statutory fund, under an appropriate name, in respect of any class or classes of its life insurance business (or, with the consent of the Commissioner, in respect of a part of any class or classes of its life insurance business) and references in this Act to statutory funds shall include references to separate statutory funds so established.

(3.) The consent of the Commissioner under the last preceding sub-section to the establishment and maintenance of a separate statutory fund in respect of a part of any class or classes of the life insurance business of a company shall not be withheld in any case where he is satisfied that the company, as at the first day of January, One thousand nine hundred and forty-five, maintained the assets of that part separate from all other assets of the company.

(4.) Where the Commissioner has consented to the establishment of a separate statutory fund in respect of any part of a class or classes of life insurance business, that part shall, for the purposes of this Act, be deemed to be a class of life insurance business.

Formation and application of statutory funds.

Ibid. Cl. 4.

38.—(1.) All amounts received by a company in respect of any class of life insurance business, after the establishment by the company of a statutory fund in respect of that class of life insurance business, shall be carried to, and become assets of, that fund.

(2.) Subject to the payment and application of such sums as may be allocated as surplus in pursuance of section fifty of this Act, the assets of a statutory fund shall not, so long as the company carries on the class or classes of life insurance business in respect of which the fund was established, be available to meet any liabilities or expenses of the company other than—

(a) liabilities or expenses referable to that class or those classes of life insurance business; and

(b) liabilities charged on those assets or any of them immediately prior to the commencement of this Act,

and shall not otherwise be directly or indirectly applied for any purpose other than the purposes of that class or those classes of life insurance business.

Ibid. Cl. 4.

Imp. Act 1923, s. 13.

(3.) A company shall not mortgage or charge any of the assets of any statutory fund otherwise than to secure a temporary bank overdraft.

(4.) Subject to the next succeeding sub-section, a transaction shall not be invalidated by reason only that it has been entered into in contravention of the last preceding sub-section, but nothing in this sub-section shall affect the liability of any person to a penalty in respect of any such contravention.

(5.) The Court may, on the application of the Commissioner, make an order that a transaction entered into in contravention of sub-section (3.) of this section shall be invalidated, but the Court shall not make any such order if the Court is satisfied that the effect of the order (if made) would be to prejudice the rights of any person in respect of, or arising out of, the transaction which have been acquired in good faith and without knowledge of the contravention.

(6.) The assets of each statutory fund shall be kept distinct and separate from all other assets of the company.

(7.) The income arising from the investment of the assets of any statutory fund shall be carried to that fund.

(8.) Every director of a company shall be under the same liability, in the event of a contravention of the provisions of this section in respect of any statutory fund, as if he had been a trustee under a trust for the execution of those provisions in respect of that fund, and as if the appropriate policy owners had been beneficiaries of such a trust, unless the director proves that the contravention occurred without his knowledge and that he used all due diligence to prevent the contravention.

Investment of statutory funds.

Eng. Bill 1927, Cl. 4.

39.—(1.) Subject to this Act, the assets of every statutory fund maintained by a company may be invested (subject to any provisions in the instruments constituting the company or in the articles of association or other rules of the company which impose restrictions upon the manner in which the assets of the company may be invested) in such manner as the company thinks fit.

(2.) The assets of a statutory fund shall not, without the sanction of the Court, be invested directly or indirectly in any share or interest in any company or undertaking carrying on life insurance business whether in Australia or elsewhere, but nothing in this sub-section shall prevent the allocation, under the next succeeding section, to a statutory fund of any such share or interest held at the commencement of this Act or require the re-investment of any such share or interest.

Transitory provisions with respect to statutory funds.

Ibid. Cl. 5.

40.—(1.) Every company which, at the date of the commencement of this Act, is carrying on life insurance business in Australia shall, as at the date of the commencement of its financial year next after the commencement, of this Act, allocate to every statutory fund established by the company assets at least equivalent to the aggregate amount of the sums which immediately before the date of the

commencement of that financial year were standing to the credit of any fund or account maintained by the company as representing a liability of the company in respect of the class or classes of life insurance business in respect of which the statutory fund is established.

(2.) Every company to which the last preceding sub-section applies shall, within six months after the date of the commencement of that financial year, lodge with the Commissioner a statement showing that the provisions of that sub-section have been complied with and specifying the assets allocated to each statutory fund established by the company and all other assets of the company, and shall, if directed by the Commissioner so to do, supply to the Commissioner such information as he requires for the purpose of exercising his powers under this section.

(3.) If it appears to the Commissioner that any statement lodged with him under the last preceding sub-section is in any particular unsatisfactory, incomplete, inaccurate or misleading, or that insufficient assets are by the statement shown as having been allocated to any statutory fund, the Commissioner may, after considering any explanation made by or on behalf of the company, give to the company such directions in writing as he thinks necessary for the variation of the statement and for the allocation to the statutory fund of further assets and, subject to this section, the company shall forthwith comply with any directions so given.

(4.) An appeal shall lie to the Court against any direction given under the last preceding sub-section.

(5.) On any such appeal, the Court may confirm, disallow or vary the direction.

(6.) The assets shown—

(a) by any statement lodged with the Commissioner by a company under this section; or

(b) where directions are given by the Commissioner or, on appeal, by the Court, for the variation of the statement—by any such statement as so varied,

as being allocated to any statutory fund, shall form part of the assets of that statutory fund, and shall be deemed to have formed part of those assets as from the date of the commencement of the financial year of the company next after the commencement of this Act.

Division 4.—Accounts, Balance-sheets and Audit.

Separation of accounts.

V. 4778, s. 12. Imp. Act 1923, s. 12.

41. Where a company establishes and maintains a statutory fund in respect of both ordinary life insurance business and industrial insurance business, it shall keep separate accounts of its receipts and payments (including sums ascertained by apportionment under the next succeeding section) in respect of the ordinary life insurance

business and in respect of the industrial insurance business and shall also keep separate accounts of the amounts of that statutory fund which are derived from the ordinary life insurance business and from the industrial insurance business, respectively.

Apportionment of receipts and payments.

Imp. Act 1923, s. 12.

42. Where a company establishes and maintains a statutory fund in respect of both ordinary life insurance business and industrial insurance business, and any amount received or paid by the company is in respect of the life insurance business in respect of which that statutory fund is maintained but is not received or paid wholly in respect of the ordinary life insurance business or wholly in respect of the industrial insurance business, the company shall, for the purposes of this Division, apportion the amount in an equitable manner between the ordinary life insurance business and the industrial insurance business.

Appreciation and depreciation of assets.

43. Where a company treats any asset as having appreciated or depreciated in value, the company shall, for the purposes of this Division, regard the amount of the appreciation or depreciation as a receipt or payment, as the case may be.

Accounts and balance-sheet.

Imp. Act 1909, ss. 4–6. V. 4602, ss. 529–530. Q., ss. 9–10. S.A., ss. 45–46. W.A., ss. 18–17 T., ss. 14–15.

44.—(1.) Subject to this section, every company shall, at the expiration of each financial year of the company, prepare—

(a) a revenue account for the year in accordance with Form A in respect of each statutory fund;

(b) a revenue account for the year in accordance with Form B in respect of any insurance business, other than life insurance business, carried on by the company;

(c) except where the company does not carry on any business other than life insurance business, a profit and loss account for the year in accordance with Form C; and

(d) a balance-sheet in accordance with Form D.

(2.) Where a statutory fund is maintained in respect of both ordinary life insurance business and industrial insurance business, separate revenue accounts in accordance with Form A shall be prepared for the ordinary life insurance business and for the industrial insurance business in respect of which that statutory fund is maintained.

Audit

Imp s .9. Eng. Cl. 7.

45. The accounts of every company shall be audited annually by its auditors, and every account and balance-sheet prepared by the company under this Division shall bear a certificate by the auditors as to whether, in their opinion—

(a) the accounts and balance-sheet are in accordance with the provisions of this Act;

(b) the balance-sheet truly represents the financial position of the company; and

(c) the books of the company have been properly kept and record correctly the affairs and transactions of the company.

Certificate as to apportionment.

Imp. Act 1923, s. 12 (3) (b)

46. If an apportionment has been made under section forty-two of this Act, the certificate of the auditors under the last preceding section shall state whether they are satisfied that the apportionment has been made in an equitable manner.

Auditors.

47.—(1.) A person appointed as an auditor of a company shall not be capable of performing the functions of an auditor under this Division unless the Commissioner has approved of his performing those functions.

(2.) The Commissioner may at any time revoke any approval given in respect of any person under this section, and thereupon that person shall not be capable of performing the functions of an auditor under this Division.

(3.) In the event of any approval under this Division being revoked in the case of a person who holds an appointment as an auditor of a company, the directors of the company may, subject to this section, appoint some other person to perform in respect of the company the functions of an auditor under this Division until such time as an auditor is appointed in accordance with the articles of association or other rules of the company.

(4.) An appeal shall lie to the Court or the Supreme Court of a State or Territory against any refusal of the Commissioner to approve of any person performing the functions of an auditor under this Division, or against any revocation of an approval given in respect of any person under this section.

(5.) On any such appeal, the Court may confirm or disallow the refusal or revocation.

Division 5.—Actuarial Investigations.

Actuarial reports and abstracts and statements of life insurance business.

Imp. Act 1909, ss. 5–6. Eng. Bill 1927, Cl. 8. V. 4602, ss. 532–533. Q., ss. 12–13. S.A., ss. 48–49. W.A., ss. 19–20. T., ss. 17–18.

48.—(1.) Every company shall, as at the date of the expiration of the financial year expiring next after the date of commencement of this Act or as at such later date as the Commissioner approves, and thereafter at intervals of five years, or at such shorter intervals as it notifies to the Commissioner to be the intervals adopted by it for the purposes of this Division—

(a) cause an actuary to make an investigation into its financial condition, including a valuation of its liabilities in respect of its life insurance business and to furnish it with a report of the results of the investigation;

(b) cause an abstract of the report of the actuary to be prepared in accordance with the provisions set forth in the Second Schedule or in accordance with those provisions as amended by the regulations; and

(c) cause a statement of its life insurance business to be prepared in accordance with the provisions set forth in the Third Schedule or in accordance with those provisions as amended by the regulations.

(2.) Where a company causes such an investigation to be made at any other time, and the results of the investigation are made public, the company shall cause an abstract of the report of the actuary to be prepared in accordance with the provisions set forth in the Second Schedule or in accordance with those provisions as amended by the regulations, but subject to such modifications (if any) as the Commissioner approves.

(3.) The company shall cause a separate abstract and a separate statement to be prepared for each statutory fund maintained by the company and, where a statutory fund is maintained in respect of both ordinary insurance business and industrial insurance business, the company shall cause separate abstracts and statements to be prepared in respect of the ordinary life insurance business and in respect of the industrial insurance business.

(4.) The valuation balance-sheet annexed to any abstract shall, in accordance with a method approved by the Commissioner, show the net liabilities in respect of policies on registers in Australia separately from the net liabilities in respect of other policies.

Provisions as to valuations.

Imp. Act 1923, s. 18.

49. The following provisions shall apply in regard to valuations made, in respect of any company, in pursuance of this Division:—

(a) The basis of valuation adopted shall be such as to place a proper value upon the liabilities, regard being had to the mortality experience among the persons whose lives have been insured by the company, to the average rate of interest from investments and to the expenses of management (including commission), and shall be such as to secure that no policy shall be treated as an asset:

Provided that the value placed upon the aggregate liabilities of any statutory fund by reason of the adoption of any basis of valuation shall not be less than it would have been if it had been calculated on the Minimum Basis in accordance with the rules set forth in the Fourth Schedule;

(b) The actuary who makes the valuation shall certify that, in his opinion, the value placed upon the aggregate liabilities of any statutory fund by the valuation is not less than the value which would have been placed upon those aggregate liabilities if it had been calculated on the Minimum Basis in accordance with the rules set forth in the Fourth Schedule;

(c) Where the balance-sheet of the company includes amongst the assets of a statutory fund any sums representing expenses of organization or extension, or the purchase of business or goodwill or any other intangible assets, and the amount of the other assets of the statutory fund (after

deducting debts due by the company in respect of that statutory fund) is less than the amount of the statutory fund as shown in the balance-sheet, the amount of the statutory fund shown in the appropriate valuation balance-sheet shall be reduced by the amount of the deficiency:

Provided that, for a period of seven years after the commencement of this Act, this paragraph shall apply with such modifications of its provisions as the Commissioner thinks just, if in the balance-sheet of the company which was last issued before the commencement of this Act any such sums were included:

Provided further that in no case shall any modification of the provisions of this paragraph be allowed by the Commissioner if the amount of the statutory fund as shown in the appropriate valuation balance-sheet would by reason of the modification exceed in amount the liabilities of the company in respect of the fund; and

(d) Where, prior to the commencement of this Act, debentures have been issued or loans raised which are charged on any of the assets of any statutory fund of the company, there shall be inserted in the valuation balance-sheet relating to that statutory fund a note giving the particulars of the charge and stating that the result shown by the valuation is subject to the liability arising from the charge.

Payment of dividends and bonuses from statutory fund.

50.—(1.) A company shall not pay or apply any part of a statutory fund—

(a) as dividends or otherwise as profits to shareholders; or

(b) as bonuses to policy owners,

except in accordance with this section.

(2.) If, as a result of the latest valuation made in respect of a company in pursuance of this Division, the valuation balance-sheet of any statutory fund of the company discloses that the amount of the statutory fund is not greater than the amount of the liabilities of the company in respect of that fund, the company may pay or apply part of the fund as bonuses to policy owners in respect of bonuses which were included as a liability of the company in that valuation and which were attached to policies at the date of the commencement of this Act or which became attached to policies as a result of an allocation of surplus made in pursuance of the next succeeding sub-section.

(3.) If, as a result of the latest valuation made in respect of a company in pursuance of this Division, the valuation balance-sheet of any statutory fund of the company discloses that the amount of the statutory fund is greater than the amount of the liabilities of the

company in respect of that fund, the company may allocate the surplus or any part of it, in any manner consistent with the provisions of the instruments constituting the company and the articles of association or other rules of the company:

Provided that—

(a) the company shall not allocate any surplus unless the allocation has been approved by an actuary; and

V. 4773, s. 14.

(b) in respect of that part of the surplus which is derived from participating policies registered by the company in Australia, the amount allocated to or for the benefit of the shareholders of the company shall not exceed twenty-five per centum of the amount allocated to or for the benefit of the owners of those policies.

Division 6.—Documents to be furnished to the Commissioner.

Returns of policies.

V. 4602, s. 531. Q., s. 11. S.A., s. 47. W.A., s. 18. T., s. 16.

51. Every company shall, at the expiration of each financial year, prepare, separately, returns in accordance with Forms E, F and G in respect of its ordinary life insurance business and in respect of its industrial insurance business, including in the returns the appropriate portions of any sinking fund business and continuous disability insurance business irrespective of whether separate statutory funds have been set up for those businesses.

Accounts, balance-sheets, &c., to be signed and deposited.

Imp. Act 1909, s. 7. Eng. Bill 1927, Cl. 8–9. V. 4602, s. 535. Q., s. 15. S.A., s. 52. W.A., s. 23. T., s. 21.

52.—(1.) Every account, balance-sheet, abstract, statement and return which a company is required by sections forty-four, forty-eight and fifty-one of this Act to prepare shall be printed and shall be signed by the chairman of directors and two other directors of the company and by the principal officer.

(2.) Each account, balance-sheet, abstract, statement or return, signed as required by this section, and at least ten printed copies of each of those documents, shall be lodged with the Commissioner—

(a) in the case of accounts, balance-sheets or returns required to be prepared under section forty-four or section fifty-one of this Act—within six months after the expiration of the financial year in respect of which they are prepared; and

(b) in the case of the abstract and statement required to be prepared under section forty-eight of this Act—within nine months after the date as at which the investigation was made,

or within such extended period, not exceeding three months, as the Commissioner allows.

Eng. Bill 1927, Cl. 9.

(3.) If it appears to the Commissioner that any account, balance-sheet, abstract, statement or return lodged with him by a company in accordance with the provisions of this section is, in any particular, unsatisfactory, incomplete, incorrect or misleading, or that it does not comply with the requirements of this Act, the Commissioner may, by notice in writing served upon the company, require such explanations as he considers necessary to be made by or on behalf of the company within such time (not less than fourteen days) as is specified in the notice, and may, after considering any such explanations or if

the explanations required have not been given by the company within the time so specified, reject the account, balance-sheet, abstract, statement or return and give such directions as he thinks necessary for the variation of any of them within such time (not less than one month) as he specifies, and of any other account, balance-sheet, abstract, statement or return affected by the variation, and the company shall comply with any directions so given.

(4.) An appeal shall be to the Court against any rejection of an account, balance-sheet, abstract, statement or return, or against any direction given by the Commissioner, under the last preceding sub-section.

(5.) On any such appeal the Court may—

(a) confirm or disallow the rejection or direction; or

(b) vary the direction.

(6.) Every account and balance-sheet lodged with the Commissioner by a company in accordance with the requirements of this Division shall be accompanied by a copy of any report on the business of the company submitted to the shareholders or policy owners of the company in respect of the financial year to which the account or balance-sheet relates.

Copies to be furnished.

Imp. Act 1909, s. 8. Eng. Bill 1927; Cl. 9 (b). V. 4602, s. 535. Q., s. 16. S.A., s. 53. W.A., s. 24. T., s. 22.

53. A printed copy of the latest account, balance-sheet, abstract, statement or return lodged with the Commissioner by a company in accordance with the requirements of this Division shall, on the application of any shareholder or policy owner of the company, be forwarded to him by the company.

Division 7.—Investigations by Commissioner.

Commissioner may demand Information.

S. Africa, s. 28.

54. The Commissioner may demand in writing from any company information relating to any matter in connexion with its business.

Power to make Investigation.

Imp. Act 1923, s. 17. S. Africa, s 29.

55.—(1.) If it appears to the Commissioner that—

(a) a company is, or is likely to become, unable to meet its obligations;

(b) a valuation made in pursuance of Division 5 of this Part discloses that the amount of a statutory fund of a company is less than the amount of the liabilities of the company in respect of that statutory fund;

(c) a company has failed to comply with any provisions of this Act;

(d) a company has not, within a period of one month as from a date upon which the Commissioner demanded from it in writing any information which the Commissioner was entitled under this Act to demand from it, furnished that information fully and satisfactorily:

V. 4778, s. 18.

(e) the rate of expense of procuring, maintaining and administering any life insurance business of a company in relation to the income derived from premiums is unduly high;

(f) the method of apportionment of income or expenditure of a company among any classes of life insurance business or between life insurance business and any other business is inequitable; or

(g) any information in the possession of the Commissioner calls for an investigation into the whole or any part of the life insurance business of the company,

the Commissioner may serve on the company a notice in writing calling upon it to show cause, within such period, not less than fourteen days from the date of the notice, as is specified in the notice, why he should not, on the grounds so specified, investigate the whole or any part of the business of the company or appoint a person (in this Division referred to as “the Inspector”) to make such an investigation and report to the Commissioner the results of his investigation.

(2.) If the company fails, within the period specified in the notice, to show cause to the satisfaction of the Commissioner, the Commissioner may make the investigation or may cause it to be made by the Inspector.

Power to obtain information.

S. Africa, s. 29.

56.—(1.) In making an investigation under this Division, the Commissioner or the Inspector—

(a) may require the company to produce any securities, books, accounts, documents or statistics of the company for his inspection and to allow him to make such extracts from them as he deems fit;

(b) may examine on oath or affirmation, in relation to the company’s business, any person who is, or has at any time been, a director, auditor, officer, agent, servant or shareholder of the company or the owner of a policy issued by the company or the personal representative of the owner; and

(c) for the purpose of the last preceding paragraph, may administer oaths or take affirmations.

(2.) A person specified in paragraph (b) of the last preceding sub-section shall produce to the Commissioner or the Inspector at his request any securities, books, accounts, documents or statistics of the company which are available to him and shall give to the Commissioner or the Inspector, at his request, any information in his possession relating to the business of the company.

Penalty: Fifty pounds.

(3.) A person so specified shall not refuse to be sworn or to make an affirmation or to give information on his examination on oath or affirmation, and shall not, in reply to a request made under the last preceding sub-section, give any false information.

Penalty: Fifty pounds

Persons to observe secrecy.

Income Tax Assessment Act, s. 16.

57.—(1.) A person shall not either directly or indirectly, except, in the performance of any duty under this Act, make a record of, or divulge or communicate to any person, any information acquired by him under this Division.

(2.) A person performing any duty under this Division shall take an oath or make a declaration, in the manner and form prescribed, to maintain secrecy in conformity with the provisions of this section.

Penalty: One hundred pounds or imprisonment for six months.

Action after completion of Investigation.

Imp. Act 1923, s. 17. V. 4773, s. 13. S. Africa, s. 29 (7).

58.—(1.) After an investigation under this Division in respect of any company has been completed—

(a) the Commissioner shall transmit to the company a summary of the conclusions arrived at by him as a result of the investigation; and

(b) the Commissioner may, without affecting any powers conferred by Division 8 of this Part, issue such directions in writing to the company, in respect of its life insurance business, as he thinks necessary or proper to deal with the situation disclosed in those conclusions and, in particular, a direction that the company shall not issue any further policies (other than paid up policies as required by this Act).

(2.) No direction issued to a company under this section shall remain in force for more than twelve months, but nothing in this sub-section shall prevent the Commissioner from issuing any further direction to the company.

(3.) An appeal shall lie to the Court against any direction issued under this section.

(4.) On any such appeal, the Court may confirm, disallow or vary the direction.

Division 8.—Judicial Management and Winding-up.

Application for judicial management or winding-up.

S. Africa, s. 30.

59.—(1.) If the Commissioner, by reason of the conclusions arrived at by him as a result of an investigation under Division 7 of this Part in respect of any company is of opinion that it is necessary or proper so to do, he may apply to the Court for—

(a) an order that the company or any part of the business of the company be placed under judicial management; or

(b) an order that the company or any part of the business of the company be wound up.

(2.) A company may, in respect of itself, after giving the Commissioner one month’s notice in writing of its intention so to do apply to the Court for any order specified in the last preceding sub-section.

(3.) Both the company and the Commissioner shall be entitled to be heard on any application made to the Court under this section.

(4.) A company or any part of the business of a company shall not be judicially managed or wound up except under the provisions of this Act.

(5.) Where an application is made under this section for an order in respect of any company, all actions and the execution of all writs, summonses and other processes against the company shall, by virtue of this section, be stayed and shall not be proceeded with without the leave of the Court first obtained or unless the Court otherwise directs.

Judicial management.

S. Africa, s. 31.

60.—(1.) An order for the judicial management of a company or of part of the business of a company made after the hearing of an application under the last preceding section shall be subject to the provisions of this section and of the next six succeeding sections.

(2.) The Court shall appoint a judicial manager who shall receive such remuneration as the Court directs, and the Court may at any time cancel the appointment and appoint some other person as judicial manager.

(3.) The Court may direct how and by whom the remuneration, charges and expenses of the judicial manager shall be borne, and may, if it thinks fit, charge that remuneration and those charges and expenses on the property of the company in such order of priority in relation to any existing charges on that property as it thinks fit.

(4.) The management of the company, or of such part of the business of the company as the order of the Court directs shall, as on and after a date specified in the order, vest in the judicial manager appointed by the” Court, but, except with the leave of the Court, the judicial manager shall not issue any further policies (other than paid-up policies as required by this Act).

(5.) As on and after the date so specified, any person vested with any such management immediately prior to that date shall be divested of that management.

(6.) The Court shall issue such directions to the judicial manager as to his powers and duties as it deems desirable in the circumstances of the case.

(7.) The judicial manager shall act under the control of the Court, and may apply to the Court at any time for instructions as to the manner in which he shall conduct the judicial management or in relation to any matter arising in the course of the judicial management.

(8.) The judicial manager shall give the Commissioner such information as the Commissioner requires from time to time, and shall report to the Commissioner whenever he intends to apply to the Court for instructions and shall, at the same time, furnish to the Commissioner particulars of the application.

(9.) The Commissioner shall be entitled to be heard on any such application, and may himself make application to the Court with reference to the conduct of the judicial management.

Cancellation of judicial management order.

61. If at any time, on the application, of the judicial manager or of any person interested, it appears to the Court that the purpose of the order for the judicial management of the company or of part of the business of the company has been fulfilled, or that for any

reason it is undesirable that the order should remain in force, the Court may cancel the order and thereupon the judicial manager shall be divested of the management which shall again vest in the board of directors or other governing body of the company.

Report by Judicial manager.

62.—(1.) The judicial manager shall conduct the management with the greatest economy compatible with efficiency, and shall, as soon as possible, file with the Court a report stating which of the following courses, is in the circumstances, in his opinion, most advantageous to the general interests of the owners of the policies of the company:—

(a) The transfer of the business of the company to some other company or to the Commonwealth Government Insurance Office, in pursuance of a scheme to be prepared in accordance with Division 9 of this Part (whether the policies of the business continue for the original sums insured, with the addition of bonuses that attach to the policies, or for reduced amounts);

(b) The carrying on of its business by the company (whether the policies of the business continue for the original sums insured, with the addition of bonuses that attach to the policies, or for reduced amounts);

(c) The winding-up of the company or of any part of the business of the company;

(d) The dealing with part of the business of the company in one way, and with part of that business in another way; or

(e) Such other course as he deems advisable.

(2.) The judicial manager shall forthwith after filing the report furnish a copy of the report to the Commissioner and make an application in writing to the Court for an order to give effect to the course stated in the report.

(3.) The report or a copy of the report shall be open for inspection by any person during official hours, at the Registry of the Court in which the report is filed or at such place as the Commissioner determines.

Indemnity.

63. The judicial manager shall not be subject to any action, claim or demand by, or liability to, any person in respect of anything done or omitted to be done in good faith in the exercise, or in connexion with the exercise, of the powers conferred on the judicial manager under this Division.

Decision of Court on report of judicial manager.

64.—(1.) The Court shall on the hearing of an application made under sub-section (2.) of section sixty-two of this Act—

(a) after hearing the Commissioner, the judicial manager and any other person who in the opinion of the Court is entitled to be heard; and

(b) after considering the report of the judicial manager,

make an order giving effect to the course which it considers in the circumstances to be most advantageous to the general interests of the owners of the policies of the company.

(2.) The order of the Court shall be binding on all persons, and shall have effect notwithstanding anything in the instruments constituting the company, or in the articles of association or other rules of the company.

Transfer of business to another company.

65. Where an order is made by the Court for the transfer of the business of a company to some other company or to- the Commonwealth Government Insurance Office the judicial manager shall prepare a scheme for the transfer in accordance with Division 9 of this Part and until the scheme is confirmed by the Court under that Division the management of the company shall continue to be vested in the judicial manager.

Cancellation of contracts or agreements.

66. The Court may, either of its own motion or on the application of the judicial manager, at any time while an order under section sixty of this Act is in force with respect to a company, after hearing all persons who, in the opinion of the Court, are entitled to be heard, cancel or vary (either unconditionally or subject to such conditions as the Court thinks just) any contract or agreement (other than a policy) between the company and any other person which the Court is satisfied is detrimental to the interests of the policy owners.

Winding-up.

S. Africa, s. 32.

67.—(1.) An order of the Court for the winding-up of a company made after the hearing of an application under section fifty-nine of this Act or made in pursuance of section sixty-four of this Act, shall be subject to the provisions of this section and of the next four succeeding sections.

(2.) The company shall be wound up by the Court which shall appoint a liquidator, who shall receive such remuneration as the Court directs, and the Court may at any time cancel the appointment and appoint some other person as liquidator.

(3.) The Court shall give such directions to the liquidator as appear to the Court to be necessary or desirable with respect to the winding-up.

(4.) The liquidator shall act under the control of the Court and may apply to the Court at any time for instructions as to the manner in which he shall conduct the winding-up or in relation to any matter arising in the course of the winding-up.

(5.) The liquidator shall give the Commissioner such information as the Commissioner requires from time to time, and shall report to the Commissioner whenever he intends to apply to the Court for instructions and shall at the same time furnish to the Commissioner particulars of the application.

(6.) The Commissioner shall be entitled to be heard on any such application, and may himself make an application to the Court with reference to the conduct of the winding-up.

(7.) Subject to this Act, and to any direction of the Court, the winding-up of a company incorporated within Australia shall be carried out in accordance with the law in force in the State or Territory in which the head office of the company is situated with respect to the winding-up of a company by a court and that law shall apply accordingly, with such modifications and adaptations as are necessary.

Ascertainment of value of liability under policies.

Imp. Act 1909, 7th Schedule. Eng. Bill 1927, 7th Schedule, Pt. II.

68. The liquidator shall ascertain, in such manner and upon such basis as the Court approves, the value of the liability of the company to every person appearing by the books of the company to be entitled to or interested in policies of the business of the company, and shall in such manner as he thinks proper give notice to every such person of the value so ascertained, and every person to whom notice is so given shall be bound by the value so ascertained, unless he disputes the valuation in such manner and within such time as is prescribed by the Rules of Court, or as the Court in any particular case by order directs.

Application of certain assets.

Eng. Bill 1927, Cl. 17.

69.—(1.) In the winding-up of a company, the value of the liabilities and the value of the assets of a statutory fund of the company shall be ascertained separately from the value of any other liabilities or from the value of any other assets of the company, and no assets of the statutory fund shall be applied to the discharge of any liabilities other than those in respect of that statutory fund except in so far as those assets exceed the liabilities of that statutory fund.

(2.) In the winding-up of a company, if, when the liabilities and assets of any statutory fund of the company have been ascertained, there is found to be a surplus of those assets over those liabilities, there shall be added to the liabilities of that statutory fund an amount equal to that proportion of the surplus so found as is equivalent to the proportion, if any, of the profits in the class or classes of life insurance business to which the statutory fund relates, allocated to shareholders and policy owners, which was allocated to policy owners during the ten years immediately preceding the commencement of the winding-up, and the assets of that statutory fund shall be deemed to exceed the liabilities of that statutory fund only in so far as those assets exceed those liabilities after that addition:

Provided that, if it appears to the Court that, by reason of special circumstances, it would be inequitable that the amount specified should be added to the liabilities of any statutory fund, the amount to be added shall lie such amount as the Court directs.

Liability of directors and officers.

Eng. Bill 1927, Cl. 20.

70. If, in the course of the winding-up of a company, the Count is satisfied that the amount of any statutory fund has been diminished by reason of any contravention of the provisions of this Act, every person who at the time of the contravention was a director, the principal officer or an officer of the company, shall be deemed in respect of the contravention to have been guilty of misfeasance in relation to the company unless he proves that the contravention occurred without his knowledge and that he used all due diligence to prevent the contravention; and the Court may assess the sum by which the amount of the statutory fund has been diminished by reason of the misfeasance, and may order any person guilty of the misfeasance to contribute to the statutory fund the whole or any part of that sum by way of compensation.

Application of deposits.

No. 4, 1932, s. 22 (2).

71. Upon the winding-up of a company, all money and securities for the time being held by the Treasurer as a deposit in respect of that company shall be paid to the liquidator and shall be applied by him in accordance with the provisions of this Act in the discharge of the liabilities of the statutory fund of the company in respect of policies.

Winding-up of part of business of company.

Eng. Bill 1927, Cl. 18.

72.—(1.) If an order of the Court for the winding-up of part of the business of a company is made after the hearing of an application under section fifty-nine of this Act, or in pursuance of section sixty-four of this Act, a scheme for the purposes of that winding-up shall be prepared and submitted for the confirmation of the Court—

(a) if the order is made after the hearing of an application under section fifty-nine of this Act—by the person who made the application; or

(b) if the order is made in pursuance of section sixty-four of this Act—by the judicial manager appointed in respect of the company.

(2.) Any scheme prepared under this section shall provide for the allocation and distribution of the assets and liabilities of the company between any classes of business affected (including the allocation of any surplus assets which may arise on the proposed winding-up), for any future rights of every class of policy owners in respect of their policies, and for the manner of winding-up any of the business of the company which is proposed to be wound up, and may contain such provisions as are expedient for giving effect to the scheme.

(3.) The provisions of sections sixty-seven, sixty-eight, sixty-nine, seventy and seventy-one of this Act shall apply, with such alterations as are necessary, in a winding-up in accordance with a scheme under this section.