384Grounds for licence suspension—other grounds

384 Grounds for licence suspension—other grounds Each of the following is a ground for suspending a licensed insurer’s (a) the insurer is not authorised under the Insurance Act 1973 (Cwlth) to carry on insurance business; (b) any of the following is appointed over all or part of the assets, or undertaking, of the insurer: (i) a provisional liquidator or liquidator; (ii) a receiver or receiver and manager; (iii) a trustee; (c) the insurer is given a direction under the Insurance Act 1973 (Cwlth), part 9 (Directions); (d) an inspector is appointed to investigate the affairs of the insurer under the Insurance Act 1973 (Cwlth), part 5 (Investigations of general insurers etc); (e) the MAI commission receives a report under section 407 (Audit of accounting records and compliance with MAI guidelines) and believes on reasonable grounds that the insurer is, or is likely to become, unable to meet its liabilities under this Act or under MAI policies issued by the insurer; (f) the insurer defaults in the payment of principal or interest of more than $100 000 under any debenture, or series of debentures, issued by the insurer, unless the default occurs because the insurer genuinely disputes its liability to make the payment;

(g) the insurer enters into, or resolves to enter into any of the following, other than for a reconstruction or amalgamation on terms that have been approved by the MAI commission: (i) an arrangement, composition or compromise with its creditors; (ii) a transfer for the benefit of its creditors; (h) a proceeding is commenced to sanction an arrangement, composition, compromise or transfer mentioned in paragraph (g), other than for a reconstruction or amalgamation on terms that have been approved by the MAI commission; (i) an application (other than a frivolous or vexatious application) or order is made for the winding up or dissolution of the insurer, other than for a reconstruction or amalgamation on terms that have been approved by the MAI commission; (j) a resolution is passed for the winding up or dissolution of the insurer, other than for a reconstruction or amalgamation on terms that have been approved by the MAI commission; (k) there is a change in the effective control of the insurer; (l) the insurer becomes a subsidiary of a corporation of which it was not a subsidiary when the licence was issued; (m) the MAI commission believes on reasonable grounds that the insurer has failed to comply with a condition imposed on the insurer’s authority to carry on insurance business under the Insurance Act 1973 (Cwlth); (n) a person claiming to be a creditor of the insurer gives the insurer a demand requiring the insurer to pay an amount of more than $100 000, and the insurer fails to pay the amount, or secure or compound for it to the satisfaction of the person, within 3 weeks after the demand is given;

(o) an execution or other process issued on a judgment, decree or order of a court in favour of a creditor of the insurer is returned unsatisfied, completely or partly, and the amount unsatisfied is more than $100 000; (p) the insurer agrees to the suspension. Note A licensed insurer, or former licensed insurer, commits an offence if any of the events or things mentioned in this section, other than paragraph (e), paragraph (m) or paragraph (p), happens and the person does not tell the MAI commission about it (see s 416).