179AAConsequences of inability or failure of life company etc. to meet certain requirements

#### 179AA Consequences of inability or failure of life company etc. to meet certain requirements Appointment of administrator or control by APRA (1) APRA may take control of a life company’s business or appoint an administrator to take control of the life company’s business if both of the following requirements are met: (a) APRA is satisfied of the matters of which the Court is required to be satisfied for the purposes of section 158 or 159; (b) subsection (2) applies. (2) This subsection applies if APRA is satisfied that at least one of the following situations exists: (a) both: (i) an AFS statutory manager has taken control of a body corporate under this Act, the Banking Act 1959 or the Insurance Act 1973 (or APRA intends for that to occur); and (ii) the life company and the body corporate are related bodies corporate; (b) both: (i) the life company’s financial position is deteriorating rapidly, or is likely to deteriorate rapidly; and (ii) failure to respond quickly to the deterioration would be likely to prejudice the interests of policy owners of the life company; (c) it is likely that the life company will be unable to carry on life insurance business in Australia consistently with the stability of the financial system in Australia; (d) an external administrator has been appointed to a holding company of the life company (or a similar appointment has been made in a foreign country in respect of such a holding company), and the appointment poses a significant threat to: (i) the operation or soundness of the life company; or (ii) the interests of policy owners of the life company; or (iii) the stability of the financial system in Australia; (e) if the life company is an eligible foreign life insurance company: (i) an application for the appointment of an external administrator of the eligible foreign life insurance company, or for a similar procedure in respect of the eligible foreign life insurance company, has been made in a foreign country; or (ii) an external administrator has been appointed to the eligible foreign life insurance company, or a similar appointment has been made in respect of the eligible foreign life insurance company, in a foreign country. (3) APRA may take any of the actions mentioned in subsection (4) in relation to a body corporate (the target body corporate) if: (a) the target body corporate is a body corporate that is any of the following: (i) a registered NOHC of a life company (the relevant life company); (ii) a subsidiary of a registered NOHC of a life company (also the relevant life company); (iii) a subsidiary of a life company (also the relevant life company); and (b) the condition in subsection (5), (6) or (7) is satisfied; and (c) the target body corporate is incorporated in Australia; and (d) the target body corporate is not a body corporate of a kind specified in regulations (if any) made for the purposes of this paragraph. (4) The actions are as follows: (a) taking control of the business of the target body corporate; (b) appointing an administrator to take control of the business of the target body corporate. (5) The condition in this subsection is satisfied if: (a) either: (i) a Life Insurance Act statutory manager has taken control of the relevant life company; or (ii) the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant life company, and APRA intends that a Life Insurance Act statutory manager will take control of the relevant life company; and (b) APRA considers that the target body corporate provides services that are, or conducts business that is, essential to the capacity of the relevant life company to maintain its operations. (6) The condition in this subsection is satisfied if: (a) either: (i) a Life Insurance Act statutory manager has taken control of the relevant life company; or (ii) the conditions in paragraphs (1)(a) and (b) are satisfied in relation to the relevant life company, and APRA intends that a Life Insurance Act statutory manager will take control of the relevant life company; and (b) APRA considers that it is necessary for a Life Insurance Act statutory manager to take control of the target body corporate, in order to facilitate the resolution of any of the following: (i) the relevant life company; (ii) a registered NOHC of the relevant life company; (iii) a relevant group of bodies corporate of which the relevant life company is a member; (iv) a particular member or particular members of such a group. (7) The condition in this subsection is satisfied if: (a) there is an external administrator of the target body corporate, or APRA considers that, in the absence of external support: (i) the target body corporate may become unable to meet its obligations; or (ii) the target body corporate may suspend payment; and (b) APRA considers that it is necessary to take an action mentioned in subsection (4) in respect of the target body corporate in order to enable the relevant life company to maintain its operations, or in order to facilitate the resolution of any of the following: (i) the relevant life company; (ii) a registered NOHC of the relevant life company; (iii) a relevant group of bodies corporate of which the relevant life company is a member; (iv) a particular member or particular members of such a group. (8) If: (a) APRA is in control of a body corporate’s business under this Subdivision—APRA is the Life Insurance Act statutory manager of the body corporate; or (b) an administrator appointed by APRA is in control of a body corporate’s business under this Subdivision—the administrator is the Life Insurance Act statutory manager of the body corporate. > Note: This section and other provisions relating to statutory management do not apply to the aspects described in subsection 16ZE(3) of the business and management of an eligible foreign life insurance company. (9) If APRA appoints 2 or more Life Insurance Act statutory managers of a body corporate, or appoints one or more additional Life Insurance Act statutory managers of a body corporate: (a) the functions and powers under this Act of a Life Insurance Act statutory manager of the body corporate may be performed or exercised by: (i) all of the Life Insurance Act statutory managers of the body corporate acting jointly; or (ii) each of the Life Insurance Act statutory managers of the body corporate acting individually (except to the extent (if any) specified in a notice given by APRA under paragraph (b)); and (b) at the time of appointment, APRA may give all of the Life Insurance Act statutory managers of the body corporate a notice in writing for the purposes of subparagraph (a)(ii), specifying limits or conditions on their ability to perform functions and exercise powers individually; and (c) treat a reference in this Act to a Life Insurance Act statutory manager as being a reference to whichever one or more of those Life Insurance Act statutory managers the case requires.