407Provision of guarantees

407 Provision of guarantees (1) This section applies if, under section 403, the Authority assumes the liability for the tail claims of an employer that has ceased to be a self-insurer. (2) The employer must ensure that on or before the date the Authority assumes liability for the tail claims of the employer there is in force, until the final assessment date, a guarantee— (a) against insolvency risk in respect of 50 per cent of— (i) in relation to the first year of the liability period, the initial assessment of tail claims liabilities until the end of the first year after the exit date; (ii) in relation to the second and subsequent years of the liability period, the revised amount of the tail claims liabilities still outstanding as assessed at the end of each subsequent year for the duration of the next year until the final assessment date; and (b) against claims deterioration— (i) in relation to the period from the exit date until the interim assessment date, for the amount, if any, by which the revised assessment of tail claims liabilities at the end of each year exceeds the initial assessment of tail claims liabilities; (ii) in relation to the period from the end of the period referred to in subparagraph (i) until the final assessment date or, if a review is conducted under section 408, until the date on which the review is finalised, for the amount, if any, by which the revised assessment of tail claims liabilities at the end of each year exceeds the revised assessment of tail claims liabilities as assessed at the end of the third year. (3) An employer must comply with subsection (2). (4) If, by virtue of section 600, a natural person commits an offence under subsection (3), that person is liable to a penalty of 120 penalty units. (5) The guarantee referred to in subsection (2) must be— (a) given by an ADI to or in favour of the Authority; and (b) in a form approved by the Authority. (6) If the employer receives a notice of assessment of tail claims liabilities conducted under section 406, the employer may, with the approval of the Authority, provide a new guarantee in a form approved by the Authority in lieu of a guarantee in force under subsection (2), to continue in force until the final assessment date. (7) The Authority may recover under a guarantee under this section any loss suffered by the Authority if— (a) the employer fails to make a payment required under section 406(3) or (5); or (b) the employer is an externally-administered body corporate within the meaning of the Corporations Act. (8) For the purpose of any proceeding commenced by the Authority to recover under a guarantee under this section, a certificate purporting to be signed by an officer or employee of the Authority certifying that— (a) an event referred to in subsection (7)(a) or (7)(b) and specified in the certificate has occurred; and (b) the Authority has suffered a loss of the amount specified in the certificate as a result of that event occurring— is evidence of the matters stated in the certificate and, in the absence of evidence to the contrary, is proof of those matters. ***final assessment date*** means— (a) if a payment is required under section 406(5), the date the payment is made; or (b) if no payment is required, the date which is 28 days after the notice of revised assessment is received under section 406 in relation to the assessment carried out in the sixth year of the liability period; ***interim assessment date*** means— (a) if a payment is required under section 406(3), the date the payment is made; or (b) if no payment is required, the date which is 28 days after the notice of revised assessment is received under section 406 in relation to the assessment carried out in the third year of the liability period.