35ACommonwealth guarantee: payments under cyclone reinsurance contracts

35A Commonwealth guarantee: payments under cyclone reinsurance contracts

(1) The Commonwealth guarantees the due payment of money that may become payable by the Corporation to any person (other than the Commonwealth) in respect of a liability (a cyclone loss liability) of the Corporation under a cyclone reinsurance contract. (2) However, the total of the amounts paid by the Commonwealth under subsection (1) in a financial year must not exceed: (a) unless paragraph (b) of this subsection applies—$10 billion; or (b) if an amount is determined for that financial year under subsection (4)—the greatest amount so determined. (3) If at any time the Corporation considers it likely that, after taking into account the guarantee under this section, the Corporation will be unable to discharge all its cyclone loss liabilities, the Corporation must give the Minister a written notice to that effect. (4) If the Minister receives a notice under subsection (3), the Minister must: (a) if the Minister is not the Treasurer—consult with the Treasurer; and (b) consult with the Prime Minister and the Finance Minister; and (c) determine an amount for a financial year, for the purposes of paragraph (2)(b), that in the Minister’s opinion is sufficient to ensure that, after taking into account the guarantee under this section, the Corporation will be able to discharge all its cyclone loss liabilities.

Note: If the Corporation gives the Minister a further notice under subsection (3), this subsection may have a further application.

(5) A determination under subsection (4) must be made by notifiable instrument, and cannot be revoked. (6) The validity of a determination under subsection (4) is not affected by a failure to comply with paragraph (4)(a) or (b).