This Act has been repealed and is no longer in force. It is retained for historical reference.
Jurisdiction
Commonwealth
Act Number
141 of 1995
Collection
legislative instrument
Plain English Summary
7/10 complexity
What these regulations do, in plain language
These are the Life Insurance Regulations 1995. They set detailed rules that sit under the Life Insurance Act 1995 and tell life insurers, friendly societies and APRA (the prudential regulator) how to do certain things required by the Act.
Key mechanical changes and rules (what the instrument actually does)
Defines terms used throughout the regulations (for example, CPI, Act, transfer date) so those words have a precise meaning in the regulations (reg 1.03).
Prescribes that an annuity contract counts as a life policy if the annuity term exceeds 10 years (reg 2.01).
Modifies how the Act applies to friendly societies by replacing or omitting particular sections and inserting alternative rules, especially about funds, distribution of surplus, record-keeping and registers (reg 2A.01 and Schedule 5). Those modifications change which parts of the Act apply to friendly societies and substitute alternative procedures and timings (Schedule 5, items such as Distribution of surplus (s 56) and registers (s 226)).
Sets which foreign parent companies qualify an Australian branch for the Act’s special treatment (eligible foreign life insurance companies — US, New Zealand, Japan, Korea, China, with clarifications about Hong Kong/Macao/Taiwan exclusions) (reg 2B.01).
Specifies what must be included in a notice establishing a statutory fund (classes, categories, kinds of policies, financing arrangements, projections and an actuary’s statement) and timing for giving that notice to APRA (reg 4.00).
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Permits life companies to give charges over statutory-fund assets in connection with derivatives, subject to conditions: the charge must fit one of three compliance paths (reg 4.00A(1A)/(1B)/(1C)), the company must have a written risk management statement covering derivatives and follow it, and the investment must be made in accordance with that statement (reg 4.00A(1)(c)-(d)). The regulation defines approved bodies, derivatives and financial property, and sets rules about possession and control of intermediated financial property (reg 4.00A(2) and subregs 1D–1G).
Allows certain friendly societies to apply, mortgage or charge assets of approved benefit funds where their rules permit and where it is for the advantage of the approved benefit fund (reg 4.00B), but excludes charges that must meet the 4.00A derivative-contract test.
Prohibits certain investments of statutory-fund assets in subsidiaries where thresholds or reinvestment-through-related-parties conditions are met (reg 4.01A).
Prescribes procedural steps and timing around transfers and amalgamations of life-insurance businesses, including early delivery of the scheme and actuarial reports to APRA before public notice, public inspection periods, and documents to lodge with APRA after a transfer or amalgamation (regs 9.01–9.04).
Prescribes forms and documentary requirements for policy assignments, notices of trustee change, unclaimed money reporting, lodgment formats (Forms 2–5), and the calculation method for net claim values and interest on unclaimed money and overdue premiums (regs 10.01, 10.02, 10.05, 10.05A, 10.05AA, 10.06). For example, interest on overdue premiums is specified by a Treasury bond‑yield based formula (reg 10.05) and interest on unclaimed money uses CPI-based rates (reg 10.05AA).
Prescribes a modest fee structure for inspecting or copying financial statements lodged with APRA ($10 inspection fee; $1/page copying with a $60 cap) (reg 11.01).
Includes a long, specific list of "approved bodies" (clearing houses, exchanges and similar entities) whose rules or laws can justify giving security in relation to derivatives under reg 4.00A (Schedule 7).
Contains transitional provision that links amendments made by another instrument (the 2016 Resilience and Collateral Protection Regulation) to charges given on or after its commencement (reg 14.01).
Who is affected and who pays
Life companies and friendly societies: bear most of the compliance costs — preparing statutory fund notices, maintaining risk management statements for derivatives and following them, preparing actuarial statements, keeping registers and financial records, completing forms and lodgments, and paying prescribed fees for document inspection (regs 4.00, 4.00A, 4.01A, 10.05A, 11.01, Schedule 5).
APRA: receives early copies of schemes and actuarial reports, may approve locations for public inspection, decides on extensions when companies cannot meet filing timeframes, and has discretion in enforcement and approvals referred to in the regs (regs 9.01, 9.02, 9.04(3)–(4)).
Policy owners: gain specified access to information about transfer schemes (public inspection periods and notices) and have procedural protections like minimum public inspection time before a scheme goes to Court (reg 9.02). Owners of unclaimed policies are captured in reporting rules (reg 10.05A).
The Commonwealth/Treasurer and ASIC: Treasurer authorises payment of unclaimed money (reg 10.05AA(3)(b)); ASIC may publish particulars of unclaimed moneys (reg 10.05B).
Who decides (delegations and discretion)
APRA has explicit decision roles: approving inspection locations, granting time extensions for lodging documents, and approving certain funds or arrangements (regs 4.00, 9.02(4)(b), 9.04(3)–(4), Schedule 5 (various APRA permissions)).
Courts retain their statutory role in confirming transfers and schemes; the regulations set minimum timing before a Court application can be made (reg 9.03).
Companies must have an "appointed actuary" provide statements or reports where required (regs 4.00(1)(f), Schedule 5 (s 56)).
Incentives, compliance burden and trade-offs (mechanisms, not judgements)
Risk-management and derivative use: reg 4.00A requires documented policies, controls and compliance processes before a life company can give a charge over statutory-fund assets for derivative purposes. This creates a compliance burden (documentation, staff expertise, audits) and gives APRA a touchpoint for prudential oversight. The incentive is for companies to formalise derivative risk governance to access secured derivative arrangements (reg 4.00A(1)(c)-(d)).
Access to secured derivative arrangements is conditional on meeting one of three compliance paths (subregs 1A, 1B, 1C). That channels market activity through recognised clearing/approved bodies or specific possession/control arrangements (reg 4.00A(1A)–(1C) and Schedule 7), shaping counterparties and operational choices.
Investments in subsidiaries are capped by a numeric test (reg 4.01A), which constrains internal group investment strategies and may encourage diversification or limit intra-group capital recycling.
Friendly societies are treated differently: the regulations substitute alternative rules for distribution of surplus, record-keeping and membership registers (Schedule 5). That changes which legal documents and operational practices friendly societies must follow compared with other life companies, shifting compliance tasks and record structure (Schedule 5, e.g. ss 56, 75, 226).
Transfers/amalgamations: the requirement to give APRA copies of schemes and actuarial reports before public notice and to allow public inspection for at least 15 business days (reg 9.01, 9.02(4)) increases upfront disclosure and administrative sequencing for consolidation transactions.
Reporting and forms: specific formats and electronic disk requirements for unclaimed money statements (reg 10.05A) create a predictable reporting standard but impose format/IT requirements on companies.
Effects on private choice, markets and ownership
By prescribing conditions under which statutory-fund assets may be charged for derivatives (and by listing approved clearing/approved bodies), the regulations influence which counterparties and market infrastructures life companies can use for collateral and derivative activity (reg 4.00A and Schedule 7). That can affect operational choices and counterparties used by life companies.
Restrictions on subsidiary investments (reg 4.01A) place limits on internal group funding or intercompany investment strategies.
The rules for friendly societies change the administrative and distribution framework that applies to smaller mutual-type entities (Schedule 5). That affects internal governance and the way surplus can be allocated between members, funds and a management fund.
Implementation risk and potential unintended consequences (mechanisms to watch)
Complexity of derivative-possession/control tests (reg 4.00A(1C) and subregs 1D–1G) may create interpretation risk in cross-border or intermediated assets: companies need legal and operational certainty about when financial property is ‘in the possession or under the control’ of a secured person.
The long approved-bodies list (Schedule 7) ties compliance to a specific set of market infrastructures; changes in global clearing relationships or new platforms may require regulator action to update that list, creating a potential lag between market change and regulatory recognition.
APRA discretion over approvals and extensions (regs 9.02(4)(b), 9.04(3)–(4)) concentrates decision-making in the regulator and creates operational dependence on APRA timelines.
Net effect summary (mechanical)
Firms: more prescriptive obligations around statutory funds, derivatives collateral, subsidiary investments and reporting; documentation and actuarial involvement are required in several places (regs 4.00, 4.00A, 4.01A, 9.01, 10.05A).
Regulators: APRA and ASIC are given clearer procedural roles and reporting lines (regs 9.01, 9.04, 10.05B).
Policy owners/members: protected by disclosure and inspection rules in transfers/amalgamations (reg 9.02) and by reporting regimes for unclaimed money (reg 10.05A).