1Lloyd's Security Trust Fund Rules No 1

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Insurance Act 1973

LLOYD’S SECURITY TRUST FUND RULES NO 1

I, Graeme John Thompson, Chief Executive Officer of the Australian Prudential Regulation Authority, MAKE these rules under subsection 70(1) of the Insurance Act 1973.

Dated 9 June 2000

[Signed]

G J Thompson

Chief Executive Officer

1. Name of rules

These rules are the Lloyd’s Security Trust Fund Rules No 1.

2. Commencement

These rules commence on the date of commencement of Schedule 2 (other than item 27) to the Insurance Laws Amendment Act 1998.

3. Definitions

In these rules:

Act means the Insurance Act 1973.

trustee means the trustee of a designated security trust fund.

Note A number of expressions used in these rules are defined in the Insurance Act 1973, including:

Note: APRA

Note: covered

Note: designated security trust fund

Note: insurance liability

Note: Lloyd’s

Note: qualified corporation.

4. Application

These rules apply to the operation of designated security trust funds.

5. Compliance with the Act and determination

A trustee must comply with the Act and the trust deed of the security trust fund approved by APRA under the Lloyd’s Security Trust Fund Determination No 1.

6. Assets

(1) A trustee must hold the assets of the designated security trust fund and apply them in accordance with this clause.

(2) An asset must be an asset in Australia unless it is transferred outside Australia under the terms of the trust deed.

(3) A trustee must not hold an excluded asset.

(4) For subrule (3), an asset is excluded if:

(a) it is an asset that would not be included as an asset for Part III of the Act if:

(i) it were an asset of Lloyd’s underwriters, Equitas Limited or Equitas Reinsurance Limited; and

(ii) the holder of the asset were taken to be a body corporate authorised to carry on insurance business; or