Health Legislation Amendment Act (No. 3) 1999
No. 159, 1999
Health Legislation Amendment Act (No. 3) 1999
No. 159, 1999
An Act to amend legislation relating to health, and for related purposes
Contents
1............ Short title............................................................................................ 1
2............ Commencement.................................................................................. 1
3............ Schedule(s).......................................................................................... 2
Schedule 1—Registration of registered organizations and related matters 3
National Health Act 1953 3
Schedule 2—The prudential regulation of registered organizations 22
Part 1—Main amendments 22
National Health Act 1953 22
Part 2—Amendments omitting references to friendly societies 102
National Health Act 1953 102
Schedule 3—Private health insurance incentives 104
Part 1—Private Health Insurance Incentives Act 1998 104
Part 2—Health Insurance Commission Act 1973 122
Part 3—National Health Act 1953 123
Schedule 4—The professional services review scheme 125
Health Insurance Act 1973 125
Health Legislation Amendment Act (No. 3) 1999
No. 159, 1999
An Act to amend legislation relating to health, and for related purposes
[Assented to 8 December 1999]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Health Legislation Amendment Act (No. 3) 1999.
2 Commencement
(1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.
(2) Subject to subsection (3), Schedule 1 and Part 1 of Schedule 2 commence on a day to be fixed by Proclamation.
(3) If Schedule 1 and Part 1 of Schedule 2 do not commence under subsection (2) within 6 months after the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.
(4) Part 2 of Schedule 2 commences:
(a) unless paragraph (b) applies—on the day that is the transfer day for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999; or
(b) if that transfer day occurs before the commencement of Part 1 of Schedule 2 to this Act—immediately after the commencement of that Part of that Schedule.
(5) Schedule 3 is taken to have commenced on 1 January 1999.
(6) Item 1 of Schedule 4 is taken to have commenced on the same day as item 44 of Schedule 1 to the Health Insurance Amendment (Professional Services Review) Act 1999, immediately after the commencement of that last‑mentioned item.
3 Schedule(s)
Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Registration of registered organizations and related matters
National Health Act 1953
1 Subsection 4(1)
Insert:
rules, in relation to a registered organization, means the body of principles devised by the management of the organization that relate to the day‑to‑day operation of the health benefits fund conducted by the organization and include principles for determining the rates of contribution for contributors and the benefit entitlements, and the conditions relating to benefit entitlements, for contributors and for their dependants.
2 Section 68
Repeal the section, substitute:
68 Application for registration as health benefits organization
(1) Subject to subsection (2), an organization may apply to the Council for registration as a registered health benefits organization.
(2) An organization is not entitled to apply for such registration unless:
(a) it is a company limited by shares, by guarantee or by both shares and guarantee; and
(b) its constitution and its rules provide:
(i) that the organization is established for the purpose of conducting a health benefits fund and for no other purpose unless that purpose is incidental to the conduct of that fund; and
(ii) that there is to be credited to that fund the whole of the income of the organization arising out of the carrying on by the organization of business as a registered health benefits organization (including any income arising from the investment of money not immediately required for the payment of benefits).
(3) Subsection (2) does not imply that an organization established for profit may not seek to be registered as a health benefits organization.
3 Before subsection 69(1)
Insert:
(1A) An application for registration as a registered organization must be lodged with the Council.
Note: The heading to section 69 is altered by omitting “Giving” and substituting “Lodgment of application and giving”.
4 Subsection 69(2)
Omit “Secretary”, substitute “Council”.
5 Paragraph 70(1)(b)
Omit “2 officers”, substitute “an officer”.
6 Section 71
Omit “Secretary” (wherever occurring), substitute “Council”.
7 Section 71
Omit “Minister”, substitute “Council”.
8 Section 72
Omit “Minister” (wherever occurring), substitute “Council”.
9 Section 72A
Omit “Minister” (wherever occurring), substitute “Council”.
Note: The heading to section 72A is altered by omitting “Ministers” and substituting “Council”.
10 Section 72A
Omit “Minister’s”, substitute “Council’s”.
11 After paragraph 72A(c)
Insert:
(ca) whether the organization will, if it is registered, meet the solvency standard established under Division 3A and the capital adequacy standard established under Division 3B;
12 Subsections 73(1), (2AA), (2AB), (2A), (2B), (3), (4), (7) and (8)
Omit “Minister” (wherever occurring), substitute “Council”.
13 Transitional provision
The Register of Health Benefits Organizations maintained in accordance with subsection 73(2AA) of the National Health Act 1953 is to be transferred, on the date of commencement of this Schedule, to the Council so that the Council can, on and after that date, comply with the requirements of that subsection in relation to any organizations in respect of which the Council grants an application for registration.
14 Subsections 73(2A) and (2B)
Omit “rules” (wherever occurring), substitute “constitution or the rules”.
15 Subsection 73(5)
Omit “Secretary”, substitute “Council”.
16 After subsection 73(5)
Insert:
(6) When the Council grants or refuses an application for registration of an organization, the Council must, as soon as practicable, and not later than 7 days after granting or refusing that application, inform the Secretary of the grant or refusal.
17 After section 73
Insert:
73AA Unincorporated registered organizations must become incorporated
(1) If a registered organization was, immediately before the commencement of Schedule 1 to the Health Legislation Amendment Act (No. 3) 1999, not incorporated under any law of the Commonwealth or of a State or Territory, the governing body of that unincorporated entity must:
(a) within the time specified by the Minister by a notice in writing to the organization; or
(b) within such further time as the Minister allows;
arrange for the health insurance business of the organization to be transferred to a company of a kind that would be eligible under section 68 to apply for registration as a health benefits organization.
(2) The Minister must consult the registered organization concerned about what time should be specified or allowed under paragraph (1)(a) or (b).
(3) If a registered organization to which subsection (1) applies fails to comply with that subsection, the registration of the organization ceases to have effect on the expiration of the time specified by the Minister under that subsection or of that time as extended by the Minister under that subsection.
(4) When the health insurance business of the organization has been transferred in accordance with the requirements of subsection (1), the Council must issue a written certificate to that effect and, upon the date of issue of that certificate, the company is to be taken:
(a) to be the registered organization in lieu of the previous registered organization; and
(b) for all purposes relating to the health insurance business—to be its successor in title.
73AAB Registered organization to maintain eligibility status
The registration of a registered organization ceases to have effect if:
(a) in the case of a registered organization that is, or is taken to be, a company incorporated under the Corporations Law of a State or internal Territory (including an organization that has had business transferred to it under subsection 73AA(1))—it ceases to be such a company at any time; or
(b) in the case of a registered organization that is a friendly society (within the meaning of Part VIA) or an incorporated association—it loses its status as a corporate entity at any time after its registration; or
(c) in the case of any registered organization—it amends its constitution or rules in such a way that a health benefits fund cannot be conducted by it in accordance with this Act.
73AAC Certain duties of registered organization regarding assets of its health benefits fund
(1) In making any decision, or taking any action, relating to the application, investment or management of the assets of the health benefits fund conducted by it, a registered organization must give priority to the interests of the contributors to the fund.
(2) An act or decision of a registered organization in relation to the health benefits fund conducted by it does not contravene subsection (1) if, having regard to the circumstances existing at the time of the act or decision, it is reasonable to believe that the act or decision gives priority to the interests of contributors to the fund.
(3) Nothing in subsection (1) prevents a registered organization doing anything that the registered organization is permitted or required to do under this Act.
73AAD Payments from health benefits fund
(1) A registered organization must not apply, or deal with, the assets of the health benefits fund conducted by it, whether directly or indirectly, except in accordance with this section.
(2) An organization must ensure that payments from the health benefits fund conducted by it are used only for the following purposes:
(a) to meet the liabilities incurred in relation to the coverage of the contributors;
(b) to make payments to the Health Benefits Reinsurance Trust Fund;
(c) to make investments for the health insurance business;
(d) if the registered organization has been established for profit—to distribute profits generated by the conduct of the health insurance business to shareholders in the organization;
(e) any other purpose that is directly related to the health insurance business.
73AAE Restrictions on certain financial transactions by registered organizations
(1) If:
(a) a registered organization:
(i) borrows money for the purposes of the health benefits fund conducted by it; or
(ii) enters into a contract of guarantee which makes the assets of the fund wholly or partly available to meet a liability of the organization; or
(iii) gives a charge over the assets of the fund; and
(b) the Council or, if the fund or organization is under administration or being wound up, the administrator or liquidator of the fund or organization, believes that the transaction is manifestly not in the interests of the contributors to the fund;
the Council, administrator or liquidator may apply to the Court to set aside, or vary the terms of, the transaction.
(2) If, on an application under subsection (1), the Court is satisfied the transaction is manifestly not in the interests of contributors to the fund, the Court may:
(a) set aside the transaction; or
(b) make any order that the Court considers appropriate with respect of the persons or the property (other than the assets of the fund) that should most appropriately bear the burden of the transaction.
(3) For the purpose of determining whether a transaction is or is not manifestly in the interests of the contributors to the fund, the Court may have regard to any matter it considers relevant including, but not limited to, the following:
(a) if the transaction involves a borrowing:
(i) whether the borrowing is for the benefit of persons other than the contributors to the fund; or
(ii) whether the amount of the borrowing is clearly excessive in relation to the health insurance business conducted by the registered organization;
(b) if the transaction involves entering into a contract of guarantee—whether the contract was entered into solely in connection with a transaction made for the benefit of the fund;
(c) if the transaction involves the giving of a charge:
(i) whether the charge secures liabilities other than liabilities relating to the health insurance business conducted by the registered organization; or
(ii) whether the amount secured by a charge over the assets of the fund exceeds the sum borrowed for the purposes of the health insurance business conducted by the registered organization;
(d) in the case of any transaction:
(i) whether because of the transaction, or because of any act done, or omission made, in connection with the transaction, the registered organization does not comply with section 73BCD or 73BCI, or with any direction given under section 73BCE or 73BCJ; or
(ii) whether the transaction contravenes, or is not permitted by, the rules of the fund or the constitution of the registered organization.
(4) Despite subsection (2), the Court must not set aside a transaction if the Court is satisfied:
(a) that the party who entered into the transaction with a registered organization entered into the transaction in good faith and without knowledge of any matter referred to in subsection (3) that applies to the transaction; and
(b) that setting aside or varying the transaction would cause substantial hardship to that party.
(5) The Court has jurisdiction to hear and determine applications under this section and to make any necessary orders in respect of those applications.
(6) In this section:
Court means the Federal Court of Australia.
18 Subsection 73A(1)
Omit “The conditions that the Minister may impose under section 73 or 73B include”, substitute “The registration of a health benefits organization is subject to”.
19 After section 73ABC
Insert:
73ABD Further conditions and revocation or variation of conditions—Council’s powers
(1) The Council may, after consulting the Minister:
(a) impose a further condition to which the registration of an organization is subject; or
(b) revoke or vary a condition imposed by the Council under paragraph (a) or section 73.
(2) If the Council makes a decision imposing, revoking or varying a condition under subsection (1) in relation to an organization, the Council must cause notice in writing of that decision to be served on the public officer of the organization.
(3) If the Council imposes, revokes or varies a condition under subsection (1) in relation to an organization, the Council must, within 1 month after taking that action, publish in the Gazette a notification setting out:
(a) the name of the organization; and
(b) the particulars of the action so taken, including:
(i) where a condition has been revoked—the condition so revoked; or
(ii) where a condition has been varied—the condition as so varied; or
(iii) where a condition has been imposed—the condition so imposed; and
(c) the date on which the action was taken.
(4) In this section, condition includes a term.
20 Subsection 73B(1)
Repeal the subsection, substitute:
(1) The Minister may, after consulting the Council:
(a) impose a further condition to which the registration of an organization is subject; or
(b) revoke or vary a condition referred to in paragraph (a).
Note: The heading to section 73B is replaced by the heading “Further conditions and revocation or variation of conditions—Minister’s powers”.
21 Saving and transitional provisions
(1) Any term or condition of registration imposed by the Minister under section 73 or 73B of the National Health Act 1953 that is in force immediately before the commencement of this Schedule has effect, on and after that commencement, as if it were a term or condition imposed by the Minister under section 73B as amended by this Act. However, subsections 73B(1A) and (2) do not apply to the imposition of a term or condition originally imposed under section 73.
(2) A form of record approved by the Secretary for the purposes of paragraph 73A(1)(b) of the National Health Act 1953 as in force immediately before the commencement of this Schedule has effect, on and after that commencement, as if it were a form of record approved by the Council for the purposes of that paragraph as amended by this Act.
22 Subsection 74(1)
After “Secretary”, insert “and to the Council”.
23 Subsection 74(5)
Omit “and the public officer”, substitute “and, subject to subsection (5AA), the public officer”.
24 After subsection 74(5)
Insert:
(5AA) A court must not impose a fine on the public officer of a registered organization under subsection (5) in respect of a contravention or failure by the organization (the primary contravention or failure) that is deemed, by that subsection, to be a contravention or failure by the public officer, if the court is satisfied that:
(a) a pecuniary penalty has been imposed on the public officer under subsection 74A(1); and
(b) in relation to that pecuniary penalty, the contravention or failure in relation to which the Federal Court of Australia was satisfied as mentioned in paragraph 74A(1)(a) was the primary contravention or failure.
25 Subsection 74(7)
After “Secretary”, insert “and to the Council”.
26 Section 74A
Repeal the section, substitute:
74A Officers liable for non‑compliance of registered organization
(1) If the Court is satisfied that:
(a) a registered organization has contravened, or failed to comply with:
(i) a provision of this Act or the regulations; or
(ii) a term or condition of registration imposed by or under this Act; or
(iii) a direction served under this Act on the organization; and
(b) an officer of the organization failed to take reasonable steps to ensure that the contravention or failure would not occur;
the Court may, subject to subsection (3), order the officer to pay to the Commonwealth such pecuniary penalty, not exceeding the amount stated in subsection 74(5), in respect of the officer’s failure referred to in paragraph (1)(b) as the Court considers appropriate.
(2) Without limiting paragraph (1)(b), if
(a) the officer took reasonable steps to ensure that a class of contraventions or failures would not occur; and
(b) that class of contraventions or failures included the contravention or failure referred to in paragraph (1)(a);
the officer has, for the purposes of this section, taken reasonable steps to ensure that the contravention or failure referred to in paragraph (1)(a) would not occur.
(3) The Court must not make an order under subsection (1) if it is satisfied that:
(a) a fine has been imposed on the officer under subsection 74(5) in respect of the contravention or failure referred to in paragraph (1)(a); or
(b) a court has ordered the officer to pay damages in the nature of punitive damages in respect of:
(i) the contravention or failure referred to in paragraph (1)(a); or
(ii) the officer’s failure referred to in paragraph (1)(b).
(4) A person authorised in writing by the Minister for the purposes of this section may, by application, institute proceedings in the Court for an order under subsection (1). An authorisation:
(a) may be of a specified person, or of all persons included in a specified class of persons; and
(b) may apply to all applications or be limited to:
(i) a specified class of applications; or
(ii) a specified application.
Note: This subsection is not intended to exclude the operation of provisions of the Director of Public Prosecutions Act 1983 under which the Director of Public Prosecutions may make an application.
(5) An application for an order under subsection (1) may only be commenced within 6 years of the contravention or failure referred to in paragraph (1)(a).
(6) In hearing and determining an application for an order under subsection (1), the Court is to apply the rules of evidence and procedure that it applies in hearing and determining civil matters. A reference in this section to the Court being satisfied of a matter is a reference to the Court being satisfied of the matter on the balance of probabilities.
(7) An order under subsection (1) may be enforced as if it were a judgment of the Court.
(8) A registered organization must not:
(a) permit money of the organization to be used for the payment of a pecuniary penalty imposed on an officer by an order under subsection (1); or
(b) reimburse the officer in respect of a pecuniary penalty imposed on the officer by an order under subsection (1).
(9) The Court has jurisdiction to hear and determine applications under this section and to make any necessary orders in respect of those applications.
(10) In this section:
Court means the Federal Court of Australia.
officer, in relation to a registered organization, includes:
(a) if the registered organization is a company under the Corporations Law—a director of the company; and
(b) if the registered organization is a friendly society (within the meaning of Part VIA)—a director of the society; and
(c) if the registered organization is an incorporated association—a member of the management committee of that association; and
(d) if the registered organization is an unincorporated entity—a member of the governing body of the entity; and
(e) if a person has been appointed as a receiver of the property of the registered organization and manages, or has, under the terms of the receiver’s appointment, power to manage, the affairs of the registered organization—that receiver.
27 Subsection 78(3)
Omit “or (2)”, substitute “, (2) or (7)”.
28 At the end of section 78
Add:
(7) After receiving notification from the Secretary that the Minister has not made a declaration under subsection (4) in relation to a notification by an organization, a registered organization must take all reasonable steps to notify each affected contributor, explaining (in plain English) the change before the change takes effect.
29 At the end of section 78
Add:
(8) The Minister must cause a report of changes in the rates of contribution by contributors of registered organizations to be laid before each House of the Parliament within 15 sitting days after the end of a quarter.
(9) The report shall relate only to changes in rates of contribution by contributors:
(a) that have been notified by the registered organization to the Secretary in accordance with subsection (1); and
(b) in respect of which the Minister has not made a declaration under subsection (4).
(10) If, during any quarter, there has been no notification by a registered organization of a change relating to rates of contribution by contributors, to which paragraphs (9)(a) and (b) apply, there is no requirement for a report under subsection (8) to be provided to the Minister in respect of that quarter.
(11) In this section:
quarter means a period of 3 months beginning on 1 January, 1 April, 1 July or 1 October of any year.
30 Subsections 79(3) and (4)
Omit “Minister” (wherever occurring), substitute “Council”.
31 Subsection 79(5)
Omit “The Minister must cancel the registration of a registered organization if he or she”, substitute “The Council must cancel the registration of a registered organization if the Council”.
32 Subsection 79(6)
Omit “Minister” (wherever occurring), substitute “Council”.
33 At the end of section 79
Add:
(7) The Council may cancel the registration of a registered organization if the Council is satisfied:
(a) that the organization has repeatedly contravened an obligation imposed on the organization by or under this Act or has contravened a number of such obligations; or
(b) that a contravention by the organization of such an obligation has serious implications for the interests of contributors to the health benefits fund conducted by the organization.
(8) For the purposes of subsection (7), and without limiting the generality of that subsection, any contravention of an obligation imposed by or under this Act on that organization that substantially and adversely affects:
(a) the non‑discriminatory nature of the health benefits fund conducted by the organization; or
(b) the financial management of the organization or of the health benefits fund conducted by it;
has a serious implication for contributors to the fund.
(9) If the Council revokes the registration of an organization, the Council must, as soon as practicable, and not later than 7 days after the revocation, inform the Secretary of that revocation.
34 Subsection 81(1)
Omit “Secretary”, substitute “Council”.
35 Subsection 81(2)
Omit “Minister”, substitute “Council”.
36 Section 82A (definition of deputy)
Repeal the definition.
37 After subsection 82D(1)
Insert:
(1A) One of the members of the Council may be appointed in writing by the Minister, in accordance with the guidelines (if any) under subsection 82F(1), to be the Deputy Commissioner.
38 At the end of section 82D
Add:
(4) If a member is appointed as Deputy Commissioner, that appointment is on a part‑time basis.
39 Paragraph 82F(1)(a)
Omit “other members and deputies”, substitute “of the other members, and of a member as Deputy Commissioner”.
40 After section 82PC
Insert:
82PCA Deputy Commissioner to act as Commissioner in certain circumstances
(1) The Deputy Commissioner is to act as Commissioner:
(a) during a vacancy in the office of Commissioner (whether or not an appointment has been made to the office) if no‑one has been appointed to act as Commissioner; or
(b) during any period, or during all periods, when the Commissioner, and any person appointed to act as Commissioner, are absent from duty or from Australia or are, for any other reason, unable to perform the duties of the Commissioner.
(2) The Deputy Commissioner must not act as Commissioner during a vacancy in the office of Commissioner for more than 12 months.
(3) Anything done by or in relation to a person purporting to act as Commissioner under this section is not invalid because the occasion for the person to act as Commissioner had not arisen or had ceased.
82PCB Powers and duties of persons acting as Commissioner
(1) Subject to any direction by the Commissioner, an acting Commissioner, or the Deputy Commissioner when acting as Commissioner, has all the powers and functions of the Commissioner under this Act.
(2) A power or function of the Commissioner under this Act or any other Act, when exercised or performed by an acting Commissioner, or by the Deputy Commissioner when acting as Commissioner, is to be taken, for the purposes of this Act or any other Act, to have been exercised or performed by the Commissioner.
(3) The exercise of a power or the performance of a function of the Commissioner under this Act or any other Act by an acting Commissioner, or by the Deputy Commissioner when acting as Commissioner, does not prevent the exercise of the power or the performance of the function by the Commissioner.
(4) If, under this Act or any other Act:
(a) the exercise of a power or the performance of a function by the Commissioner; or
(b) the operation of a provision of this Act or that other Act, as the case requires;
is dependent on the opinion, belief or state of mind of the Commissioner in relation to a matter:
(c) that power or function may be exercised or performed by an acting Commissioner, or by the Deputy Commissioner when acting as Commissioner; and
(d) that provision may operate;
on the opinion, belief or state of mind in relation to that matter of the acting Commissioner, or of the Deputy Commissioner when so acting.
41 Section 82PD
Repeal the section.
42 Section 82PF
Omit “or a deputy”.
43 Subsections 82PG(1) and (2)
Omit “or a deputy”.
44 Subsection 82PG(2)
Omit “or deputy”.
45 Subsections 82ZP(1), (2) and (4)
Omit “Minister” (wherever occurring), substitute “Council”.
46 Subsection 82ZP(1A)
Repeal the subsection, substitute:
(1A) Subject to this section, the Council must, in writing signed by the Commissioner, approve the transfer, unless action is being taken, or proposed to be taken, under Part VIA, in relation to all or any of those organizations.
47 Subsection 105AB(1A)
Omit “Minister”, substitute “Council”.
48 Subsection 105AB(2)
Omit “Minister”, substitute “Council”.
49 After subsection 105AB(2)
Insert:
(2A) An application may be made to the Tribunal for review of a decision of the Minister:
(a) to specify a particular time, in a notice under paragraph 73AA(1)(a), for the transfer of the health insurance business of a registered organization; or
(b) to allow a particular further time under paragraph 73AA(1)(b) for such a transfer, or to refuse to allow further time under that paragraph for such a transfer.
The application can only be made within 28 days after the Minister makes the decision.
(2B) An application may be made to the Tribunal for review of:
(a) a decision of the Council under section 73ABD imposing a term or condition of registration of an organization; or
(b) a decision of the Council under section 73ABD varying a term or condition of registration of an organization.
50 Paragraph 105AB(3)(b)
Omit “, or a further term or condition,”.
51 Saving provision pending establishment of new prudential standards
(1) In this item:
new prudential standards day has the same meaning as in subsection 4(1) of the Principal Act as amended by this Act.
Principal Act means the National Health Act 1953.
(2) Despite the insertion of paragraph 72A(ca) of the Principal Act by item 11, the Principal Act continues to have effect until the new prudential standards day as if that insertion had not been made.
52 Other saving and transitional provisions
(1) The registration of a registered organization that was in force immediately before the commencement of this Schedule continues in force, subject to the provisions of the National Health Act 1953, on and after that commencement, as if that registration had been granted by the Council under the National Health Act 1953 as amended by this Schedule.
(2) If, before the commencement of this Schedule:
(a) an application by an organization for registration as a health benefits organization had been lodged with the Secretary; but
(b) the application had not been referred to the Registration Committee as constituted in accordance with the National Health Act 1953 as in force before that commencement;
the Secretary must refer the application and all supporting documents and information to the reconstituted Registration Committee to be considered and dealt with as if it were an application made after the commencement of this Schedule.
(3) If, before the commencement of this Schedule:
(a) an application by an organization for registration as a health benefits organization had been referred to the old Registration Committee; but
(b) the Committee had not made a report under section 72 of the National Health Act 1953;
the Secretary must arrange for the application to be transferred to the reconstituted Registration Committee for the purpose of preparation of a report as if the application were an application made after the commencement of this Schedule and the reconstituted committee may, for that purpose, undertake such further inquiry (if any) as it considers necessary.
(4) If, before the commencement of this Schedule:
(a) a report had been made to the Minister concerning the application by an organization for registration as a health benefits organization by the old Registration Committee; but
(b) the Minister had not considered that report;
the Minister must refer the report to the Council and the Council must deal with the matter as if it were a report duly made to the Council by the reconstituted Registration Committee.
(5) In this item:
old Registration Committee means the registration committee constituted in accordance with the National Health Act 1953 as in force before the commencement of this Schedule.
reconstituted Registration Committee means the registration committee constituted in accordance with the National Health Act 1953 as in force after the commencement of this Schedule.
Schedule 2—The prudential regulation of registered organizations
Part 1—Main amendments
National Health Act 1953
1 Subsection 4(1)
Insert:
new prudential standards day means the day on which the Council establishes:
(a) a solvency standard for the purposes of Division 3A of Part VI of this Act; and
(b) a capital adequacy standard for the purposes of Division 3B of that Part.
2 After section 6A
Insert in Part I:
7 Application of provisions of Corporations Law—general matters
(1) For the purposes of this section:
(a) an application provision is a provision of this Act:
(i) that provides for the application of a provision, or a group of provisions (including a Chapter, Part, Division or Subdivision), of the Corporations Law; or
(ii) that refers to a provision, or group of provisions, of the Corporations Law as so applied; and
(b) an applied Corporations Law provision is a provision, or a provision in a group of provisions, of the Corporations Law that is applied as mentioned in subparagraph (a)(i).
(2) A reference in an application provision to an applied Corporations Law provision, or a group of applied Corporations Law provisions, includes (unless the contrary intention appears) a reference to any regulations or other instruments in force for the purposes of that provision, or any of those provisions, of the Corporations Law.
Note: So, for example, a provision of this Act that applies a particular provision of the Corporations Law also applies any regulations that have effect for the purposes of that provision (unless a contrary intention appears).
(3) If an application provision contains a power for regulations to modify an applied Corporations Law provision:
(a) the power extends to modifying any regulations or other instruments in force for the purposes of that provision of the Corporations Law, being regulations or other instruments that are applied as a result of subsection (2); and
(b) the modifications (whether of the applied Corporations Law provision or of regulations or instruments referred to in paragraph (a)) that may be made include omissions, additions and substitutions.
(4) The fact that provision is made in this Act for a specific modification of one or more applied Corporations Law provisions does not imply that further modifications of that provision, or any of those provisions, consistent with that specific modification, should not be made by the regulations.
(5) An applied Corporations Law provision, or a provision of regulations or another instrument that is applied as a result of subsection (2), is (as so applied) to be interpreted in accordance with the same definitions and interpretation principles that apply to the provision as it has effect in or under the Corporations Law, unless a contrary intention appears in an application provision or in modifying regulations.
(6) If an applied Corporations Law provision allows something to be done in or by regulations, then:
(a) regulations may be made under this Act to do that thing for the purposes of the applied Corporations Law provision; and
(b) if regulations are so made, any regulations or instruments that are applied as a result of subsection (2) are ineffective, for the purposes of this Act, to the extent that they are inconsistent with the regulations so made.
3 Sections 73BAB and 73BAC
Repeal the sections.
4 After Division 3 of Part VI
Insert:
Division 3A—The solvency standard for registered organizations
73BCA Purpose of Division
The purpose of this Division is to establish, and require registered organizations to comply with, standards of solvency in order to ensure that the health benefits fund conducted by each such organization remains solvent.
73BCB Council to establish solvency standards
(1) The Council must, as soon as practicable but, in any case, not later than 1 January 2001, establish, in writing, a solvency standard for the purposes of this Division.
(2) The solvency standard may be expressed:
(a) to set different standards of solvency:
(i) for health benefits funds conducted by different registered organizations; or
(ii) for different classes of health benefits funds; or
(b) to apply to a health benefits fund only in circumstances specified in the standard.
(3) The Council must, before establishing a solvency standard, consult with the Australian Government Actuary concerning that standard.
(4) If, in establishing a standard, the Council decides:
(a) not to adopt advice concerning a standard from the Australian Government Actuary; or
(b) to adopt advice concerning a standard from the Australian Government Actuary with variations;
the Council must publish in the Gazette a statement that sets out the Council’s reasons for not adopting, or for varying, that advice.
(5) A solvency standard is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
73BCC Purpose of solvency standard
The purpose of the solvency standard is to ensure, as far as practicable, that at any time the financial position of the health benefits fund conducted by a registered organization is such that the organization will be able, out of the assets of the fund, to meet all liabilities referable to the health insurance business of the organization as those liabilities become due.
73BCD Registered organizations to comply with solvency standards
(1) Subject to subsection (2), every registered organization must comply with the solvency standard as it applies in respect of that organization.
(2) The Council may declare, by notice in writing, that the solvency standard does not apply to a particular registered organization, or does not apply in particular circumstances, or for a particular period, specified in the notice.
(3) The Council may:
(a) in a declaration under subsection (2); or
(b) by a separate notice in writing;
impose conditions to be complied with by any organization that is to get the benefit of the declaration.
(4) If an organization fails to comply with a condition referred to in subsection (3), the declaration is taken to cease to apply to the organization.
(5) If the Council is satisfied that a declaration under subsection (2), or a condition referred to in subsection (3), is no longer required or should be varied, the Council must, by notice in writing, revoke or vary the declaration or condition accordingly.
(6) If a registered organization requests the Council, in writing, to revoke or vary a declaration under subsection (2), or a condition referred to in subsection (3), the Council must, within 28 days after receiving the request:
(a) if the Council is satisfied that the declaration or condition is no longer necessary or should be varied—revoke or vary the declaration or condition; or
(b) in any other case—refuse to revoke or vary the declaration or condition.
(7) If the Council does not, within the 28 days referred to in subsection (6), either revoke or vary or refuse to revoke or vary the declaration or condition concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the declaration or condition at the end of that period.
(8) The Council must give to the registered organization written notice of a decision made under subsection (6) and, if the Council refuses to revoke or vary the declaration or condition concerned, provide a statement of reasons for so refusing.
(9) In this section, a reference to a declaration or condition includes a reference to a declaration or condition as varied.
73BCE Council may give solvency directions
(1) If, having regard to:
(a) the nature and value of the assets in the health benefits fund of a registered organization; or
(b) the nature and extent of the liabilities that are referable to that health benefits fund; or
(c) any other matters that the Council considers relevant;
the Council is satisfied that there are reasonable grounds for believing that the organization may not be able to meet, out of the assets of the fund, all liabilities referable to the business of the fund as they become due, the Council may give written directions (solvency directions) to the organization.
(2) Solvency directions are directions that, in the opinion of the Council, are reasonably necessary to ensure, as far as practicable, that a registered organization will be able to meet the liabilities of the health benefits fund conducted by the organization out of the assets of the fund as they become due.
(3) The Council may give a solvency direction to a registered organization even if, when the direction is given, the organization meets the requirements of the solvency standard applicable to that organization in respect of the fund and there are reasonable grounds to believe that the organization will meet that standard at all times while the direction is in force.
(4) A registered organization must comply with a solvency direction given to it under subsection (1).
(5) Subject to subsections (6) and (7), a solvency direction remains in force for a period specified in the direction, not exceeding 3 years, commencing on the day when the direction is given. However, nothing prevents the Council from issuing a further solvency direction in the same terms to take effect immediately after the expiration of a previous direction.
(6) If the Council is satisfied that a particular solvency direction is no longer required or should be varied, the Council must, by written notice given to the registered organization, revoke or vary the direction accordingly
(7) If a registered organization to which a solvency direction has been given requests the Council, in writing, to revoke or vary the direction, the Council must, within 28 days after receiving the request:
(a) if the Council is satisfied that the direction is no longer necessary or should be varied—revoke or vary the direction; or
(b) in any other case—refuse to revoke or vary the direction.
(8) If the Council does not, within the 28 days referred to in subsection (7), either revoke or vary or refuse to revoke or vary the solvency direction concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the direction at the end of that period.
(9) The Council must give to the registered organization written notice of a decision made under subsection (7) and, if the Council refuses to revoke or vary the direction concerned, provide a statement of reasons for so refusing.
(10) In this section, a reference to a solvency direction includes a reference to a solvency direction as varied.
Division 3B—The capital adequacy standard for registered organizations
73BCF Purpose of Division
The purpose of this Division is to establish, and require registered organizations to comply with, a standard in order to maintain the capital adequacy of the health benefits funds they conduct.
73BCG Council to establish capital adequacy standard
(1) The Council must, on the same day as it establishes a solvency standard under section 73BCB, establish, in writing, a capital adequacy standard for the purposes of this Division.
(2) The capital adequacy standard may be expressed:
(a) to set different standards of capital adequacy:
(i) for health benefits funds conducted by different registered organizations; or
(ii) for different classes of health benefits funds; or
(b) to apply to a health benefits fund only in circumstances specified in the standard.
(3) The Council must, before establishing a capital adequacy standard, consult with the Australian Government Actuary concerning that standard.
(4) A capital adequacy standard is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
73BCH Purpose of capital adequacy standard
The purpose of the capital adequacy standard is to ensure, as far as practicable, that there are sufficient assets in the health benefits fund conducted by each registered organization to provide adequate capital for the conduct of the health insurance business in accordance with this Act and in the interests of the contributors to the fund.
73BCI Registered organization to comply with capital adequacy standard
(1) Subject to subsection (2), every registered organization must comply with the capital adequacy standard as it applies in respect of that organization.
(2) The Council may declare, by notice in writing, that the capital adequacy standard does not apply to a particular registered organization, or does not apply in particular circumstances, or for a particular period, specified in the notice.
(3) The Council may:
(a) in a declaration under subsection (2); or
(b) by a separate notice in writing;
impose conditions to be complied with by any organization that is to get the benefit of the declaration.
(4) If an organization fails to comply with a condition referred to in subsection (3), the declaration is taken to cease to apply to the organization.
(5) If the Council is satisfied that a declaration under subsection (2), or a condition referred to in subsection (3), is no longer required or should be varied, the Council must, by notice in writing, revoke or vary the declaration or condition accordingly.
(6) If a registered organization requests the Council, in writing, to revoke or vary a declaration under subsection (2), or a condition referred to in subsection (3), the Council must, within 28 days after receiving the request:
(a) if the Council is satisfied that the declaration or condition is no longer necessary or should be varied—revoke or vary the declaration or condition; or
(b) in any other case—refuse to revoke or vary the declaration or condition.
(7) If the Council does not, within the 28 days referred to in subsection (6), either revoke or vary or refuse to revoke or vary the declaration or condition concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the declaration or condition at the end of that period.
(8) The Council must give to the registered organization written notice of a decision made under subsection (6) and, if the Council refuses to revoke or vary the declaration or condition concerned, provide a statement of reasons for so refusing.
(9) In this section, a reference to a declaration or condition includes a reference to a declaration or condition as varied.
73BCJ Council may give capital adequacy directions
(1) If, having regard to:
(a) the nature of the business of a health benefits fund conducted by a registered organization; or
(b) the nature or value of the assets of the fund; or
(c) any other matter that the Council considers relevant;
the Council is satisfied that there are reasonable grounds for believing that the assets of the fund will not provide adequate capital for the conduct of the health insurance business in accordance with this Act and in the interests of the contributors to the fund, the Council may give written directions (capital adequacy directions) to the organization.
(2) Capital adequacy directions are directions that, in the opinion of the Council, are reasonably necessary to ensure, as far as practicable, that the assets of the health benefits fund conducted by a registered organization will provide adequate capital for the purposes described in subsection (1).
(3) The Council may give a capital adequacy direction to a registered organization even if, when the direction is given, the organization meets the requirements of the capital adequacy standard applicable to that organization in respect of the fund and there are reasonable grounds to believe that the organization will meet that standard at all times while the direction is in force.
(4) A registered organization must comply with a capital adequacy direction given to it under subsection (1).
(5) Subject to subsections (6) and (7), a capital adequacy direction remains in force for a period specified in the direction, not exceeding 3 years, commencing on the day on which the direction is given. However, nothing prevents the Council from giving a further direction in the same terms to take effect immediately after the expiry of a previous direction.
(6) If the Council is satisfied that a particular capital adequacy direction is no longer required or that it should be varied, the Council must, by written notice given to the registered organization, revoke or vary the direction accordingly.
(7) If a registered organization to which a capital adequacy direction has been given requests the Council, in writing, to revoke or vary the direction, the Council must, within 28 days after receiving the request:
(a) if the Council is satisfied that the direction is no longer necessary or should be varied—revoke or vary the direction; and
(b) in any other case—refuse to revoke or vary the direction.
(8) If the Council does not, within the 28 days referred to in subsection (7), either revoke or vary or refuse to revoke or vary the direction concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the direction at the end of that period.
(9) The Council must give to the registered organization written notice of its decision under subsection (7) and, if the Council refuses to revoke or vary the direction concerned, provide a statement of the reasons for so refusing.
(10) In this section, a reference to a capital adequacy direction includes a reference to a capital adequacy direction as varied.
5 Subsection 73BEB(1)
Omit “or served under subsection 73BAC(2)”.
6 After section 82B
Insert:
82BA Purposes of Council
(1) The Council is established for the following purposes:
(a) to regulate registered organizations in accordance with this Act, other laws of the Commonwealth and any directions given by the Minister;
(b) to develop policies about the performance of its regulatory functions.
(2) In carrying out its purposes, the Council must take all reasonable steps to achieve an appropriate balance between the following objectives:
(a) the objective of fostering an efficient and competitive health insurance industry;
(b) the objective of protecting the interests of consumers;
(c) the objective of minimising the level of health insurance premiums;
(d) the objective of ensuring the prudential safety of individual registered organizations.
7 At the end of section 82D
Add:
(4) A person cannot be appointed as a member of the Council if that person is a director, officer or employee of a body regulated by the Council.
8 Paragraph 82G(1)(c)
Repeal the paragraph, substitute:
(c) to establish standards of the following kinds to be complied with by registered organizations:
(i) solvency standards;
(ii) capital adequacy standards;
(iii) uniform standards for reporting to the Council;
9 Before paragraph 82G(1)(e)
Insert:
(db) to appoint, under section 82R, inspectors for the purpose of investigating the affairs of registered organizations under Part VIA and to exercise other related powers and functions under that Part;
10 Paragraphs 82G(1)(f) and (g)
Repeal the paragraphs, substitute:
(f) to appoint, on the basis of a report of an inspector or otherwise, persons as administrators of health benefits funds or of registered organizations and to terminate such appointments;
(g) to receive, under section 82XZC, reports of administrators of health benefits funds or registered organizations concerning the administration of those funds or organizations and to deal with such reports in accordance with section 82XZD;
(ga) to give approvals related to the voluntary winding up of health benefit funds or registered organizations in the circumstances set out in Subdivision 3 or 4 of Division 4 of Part VIA, as the case requires;
(gb) to apply to a court for the winding up of insolvent health benefits funds or insolvent registered organizations in accordance with Subdivision 5 or 6 of Division 4 of Part VIA, as the case requires;
11 Paragraph 82G(1)(q)
Repeal the paragraph.
12 After paragraph 82G(1)(s)
Insert:
(sa) to cooperate with other regulatory agencies on matters affecting registered organizations and the private health insurance industry generally;
13 Before section 82Q
Insert:
Division 1—Preliminary
82QA Outline of Part
(1) Division 1 sets out the purpose of Part VIA and defines concepts used in the Part.
(2) Division 2 provides that the Minister or the Council may appoint an inspector to investigate and report on the affairs of a registered organization and sets out the powers and duties of an inspector.
(3) Division 3 describes the circumstances in which, and the legal basis on which, a fund or a registered organization can be placed under administration and sets out the duties and powers of an administrator.
(4) Division 4 describes the circumstances in which, and the legal basis on which, a fund or a registered organization can be wound up and, to the extent that Commonwealth law affects those circumstances or that manner, sets out the relevant Commonwealth law.
(5) Division 5 contains provisions dealing with miscellaneous matters.
82QB Purpose of the Part
The purpose of this Part is:
(a) to provide for the supervision of the business, affairs and property of funds and of registered organizations conducting funds, so as to ensure that the business and affairs are carried on, and the property is managed, in the interests of the contributors to these funds and in accordance with applicable laws, terms and conditions, and directions; and
(b) to provide, either as a consequence of that supervision, or as a voluntary measure instituted by the directors of such funds or organizations, for the administration of such funds or organizations in a manner consistent with the interests of those contributors; and
(c) to provide, as a consequence either of that supervision or administration or as a voluntary measure, for the orderly winding up of such funds or organizations in a manner that:
(i) if it arises out of that supervision or administration—is consistent with the interests of those contributors; or
(ii) if it is a voluntary winding up—is not materially detrimental to the interests of those contributors.
82QC Limitation on administration and winding up of health benefits funds and registered organizations
(1) Despite the provisions of any other law of the Commonwealth or of any law of a State or Territory, the fund conducted by a registered organization, or a registered organization itself, can only be placed under administration, or dealt with as a fund or organization under administration, in accordance with Division 3.
(2) Despite the provisions of any other law of the Commonwealth or any other law of a State or Territory, the fund conducted by a registered organization, or a registered organization itself, can only be wound up in accordance with Division 4.
14 Subsection 82Q(1) (definition of affairs)
Repeal the definition.
15 Subsection 82Q(1)
Insert:
appointing authority, in relation to the appointment of an inspector, means the Minister or the Council.
16 Subsection 82Q(1)
Insert:
assets, in relation to the fund, or to the health insurance business, conducted by a registered organization, means the assets of the organization that are, in whole or in part, referable to the fund or business.
17 Subsection 82Q(1)
Insert:
conducting organization, in relation to a fund under administration or being wound up, means the registered organization that conducts that fund.
18 Subsection 82Q(1)
Insert:
contributor, in relation to a fund under administration or being wound up, or to a fund conducted by an organization under administration or being wound up, includes the dependants of the contributor.
19 Subsection 82Q(1)
Insert:
Court means:
(a) subject to paragraph (b), the Federal Court of Australia; or
(b) in relation to an application for, or any proceedings concerning, the winding up of a registered organization (including a registered organization under administration)—the Court that is identified for the purpose in the applicable law referred to in section 82YB as the law governing the winding up of that organization.
20 Subsection 82Q(1)
Insert:
friendly society means a body that is, or is taken to be, registered or incorporated as a friendly society under the law of a State or internal Territory relating to the registration or incorporation of friendly societies.
21 Subsection 82Q(1) (definition of fund)
Repeal the definition, substitute:
fund means a health benefits fund conducted by a registered organization.
22 Subsection 82Q(1)
Insert:
fund under administration means a fund in respect of which an administrator is performing duties under Division 3.
23 Subsection 82Q(1)
Insert:
liabilities, in relation to the fund, or to the health insurance business, conducted by a registered organization, means the liabilities of the organization that are, in whole or in part, referable to the fund or business.
24 Subsection 82Q(1)
Insert:
organization under administration means a registered organization in respect of which an administrator is performing duties under Division 3.
25 Subsection 82Q(1)
Insert:
voluntary deed of arrangement, means:
(a) a deed of arrangement agreed on by creditors in a meeting convened under section 82XZ; or
(b) such a deed as varied in accordance with the terms of a variation agreed on by creditors in a meeting convened in accordance with Subdivision 7 of Division 3.
26 Before section 82R
Insert:
Division 2—Investigations into affairs of registered organizations
27 Subsection 82R(1)
Omit all the words before paragraph (aa), substitute “If the appointing authority has reason to suspect that:”.
28 Subsection 82R(1)
Omit all the words after paragraph (c), substitute “the appointing authority may, by notice specifying the matter referred to in paragraph (aa), (b) or (c) that the appointing authority suspects and the ground on which the appointing authority suspects the matter, appoint an inspector to investigate the affairs of the registered organization”.
29 Subsection 82R(2)
Repeal the subsection, substitute:
(2) The appointment must be in writing and:
(a) if the Minister is the appointing authority—be signed by the Minister; or
(b) if the Council is the appointing authority—be signed by the Commissioner.
30 Subsection 82R(4)
Omit “The Minister”, substitute “The appointing authority”.
31 Subsections 82W(1), (5), (6) and (7)
Omit “Minister” (first occurring), substitute “appointing authority”.
32 Subsection 82W(1)
Omit “Minister” (second and third occurring), substitute “authority”.
33 After subsection 82W(1)
Insert:
(1A) If an inspector makes a report to the appointing authority under subsection (1), the inspector must:
(a) if the authority is the Minister—send a copy of the report to the Council; or
(b) if the authority is the Council—send a copy of the report to the Minister.
34 Subsection 82W(3)
Omit “Minister”, substitute “appointing authority”.
35 Subsection 82W(4)
Repeal the subsection.
36 Subsection 82W(5)
Omit “Minister” (second occurring), substitute “authority”.
37 Subsection 82W(6)
Omit “Minister” (second occurring), substitute “authority”.
38 Subsection 82W(7)
Omit “Minister” (second and third occurring), substitute “authority”.
39 After subsection 82W(9)
Insert:
(9A) No action or proceeding, either civil or criminal, lies against an inspector:
(a) in respect of the publication to the appointing authority of a report under this section; or
(b) in respect of the inspector’s opinion given to the appointing authority in accordance with subsection (3);
so long as the inspector has acted in good faith.
40 Subsection 82W(10)
After “subsection (9)”, insert “or (9A)”.
41 After section 82W
Insert:
82WA Minister and Council to inform each other about action taken
(1) If, on receipt of a report under subsection 82W(1) or a copy of a report under subsection 82W(1A), the Minister proceeds to take any action under this Act in respect of the registered organization, the Minister must inform the Council of such action.
(2) If, on receipt of a report under subsection 82W(1) or a copy of a report under subsection 82W(1A), the Council proceeds to take any action under this Act in respect of the registered organization, the Council must inform the Minister of such action.
42 Section 82X
Renumber as section 82WB.
43 Transitional provision
Any delegation in force under section 82X of the National Health Act 1953 immediately before the commencement of Part 1 of this Schedule has effect, on and after that commencement, as if it were a delegation in force under that section as renumbered.
44 Section 82Y
Renumber as section 82WC.
45 Transitional provision
Any proceedings commenced but not completed under section 82Y of the National Health Act 1953 as in force before the commencement of Part 1 of this Schedule have effect, on and after that commencement, as if they were proceedings that had been commenced under that section as renumbered.
46 Sections 82Z to 82ZM
Repeal the sections, substitute:
Division 3—Administration of funds and registered organizations
Subdivision 1—Preliminary
82XA Purpose of Division
The purpose of this Division is to permit the business, affairs and property of a fund or organization under administration to be administered in a way:
(a) that maximises the chance that the persons who are contributors to the fund under administration, or to the fund of the organization under administration, as the case requires, to continue to be covered for health insurance either by the fund to which they contribute or by another fund to which the business of the fund is transferred; or
(b) if it is not possible for that coverage to be maintained—that, to the extent possible, safeguards the financial interests of those contributors in the event of an eventual winding up of the fund or organization under administration.
82XB The basis of the law relating to administration
(1) Subject to this Act, the provisions of the law of each State or Territory that, but for this section, would relate to the administration of a registered organization, whether it is a company, a friendly society, an incorporated association or an unincorporated entity, cease, by force of this section, to apply to that registered organization.
(2) The administration of a registered organization is regulated instead, and the administration of a fund conducted by a registered organization is also regulated:
(a) by the provisions of this Division; and
(b) by the provisions of Divisions 6, 7, 8, 10, 11, 13 and 16 of Part 5.3A of Chapter 5 of the Corporations Law and of Division 7A of Part 5.6 of that Chapter, all applying, so far as they are capable of so doing, subject to such modifications as are set out in this Act or as are prescribed, as a law of the Commonwealth.
(3) For the purposes of subsection (2), the reference, in relation to a particular registered organization, to provisions of the Corporations Law that are to be applied, subject to modifications, as a law of the Commonwealth is a reference to those provisions of the Corporations Law of the particular State or internal Territory that is applicable to that registered organization as those provisions are in force from time to time.
(4) In the application of the provisions of the Corporations Law referred to in subsection (2) in relation to the administration of a fund, those provisions apply as if:
(a) a reference to the company were a reference to the fund; and
(b) a reference to the administrator were a reference to the administrator of the fund appointed under this Act; and
(c) a reference to the Court were a reference to the Federal Court of Australia.
(5) In the application of the provisions of the Corporations Law referred to in subsection (2) in relation to the administration of a registered organization, those provisions apply as if:
(a) a reference to the company were a reference to the registered organization (whether the registered organization is a company under the Corporations Law or not); and
(b) a reference to the administrator were a reference to the administrator of the registered organization appointed under this Act; and
(c) a reference to the Court were a reference to the Federal Court of Australia.
(6) The regulations may provide for different modifications according to the nature of the fund or registered organization that is to be, or that is being, administered.
82XC Definitions
In this Division:
administrator, in relation to a fund or a registered organization, means a person appointed as administrator of the fund or organization under section 82XD.
Subdivision 2—Appointment of an administrator
82XD Council may appoint administrator
Subject to sections 82XE and 82XF, the Council may, by written instrument, appoint a person as the administrator:
(a) of the fund conducted by a registered organization; or
(b) of a registered organization;
with effect from a date specified in the instrument of appointment.
82XE Qualifications for appointment as administrator
(1) The Council must not appoint a person as administrator of a fund or of a registered organization unless:
(a) the person is registered, or taken to be registered, as an official liquidator under the Corporations Law; and
(b) the person is not related:
(i) if appointed as administrator of the fund—to the fund; or
(ii) if appointed as administrator of the registered organization—to the organization or to the fund of the organization.
(2) Without limiting the generality of the circumstances in which a person will be taken to be related to a fund, a person will be taken to be so related if the person is:
(a) a contributor to the fund; or
(b) an auditor of the fund; or
(c) a chargee of property of the fund; or
(d) an officer of a body corporate that is a chargee of property of the fund.
(3) Without limiting the generality of the circumstances in which a person will be taken to be related to a registered organization, a person will be taken to be so related if the person is:
(a) an officer of the organization; or
(b) an auditor of the organization; or
(c) an officer of a body corporate that is related to the organization; or
(d) a chargee of property of the organization; or
(e) an officer of a body corporate that is a chargee of the property of the organization.
(4) The question whether a body corporate is related to a registered organization that is itself a body corporate is to be determined in accordance with the principles set out in section 50 of the Corporations Law.
(5) A person is not to be taken to be an officer of a registered organization for the purposes of this section simply because a person is appointed as administrator of that organization.
82XF Grounds of appointment of an administrator
(1) The Council may appoint an administrator to a fund if, and only if, the Council believes that the appointment of an administrator to the fund is, in the circumstances, in the interests of the contributors to the fund, and:
(a) the Council is satisfied, on reasonable grounds, that:
(i) on or after the new prudential standards day there has been a breach of section 73BCD by the conducting organization in its conduct of the fund; or
(ii) on or after the new prudential standards day there has been a breach of section 73BCI by the conducting organization in its conduct of the fund; or
(iii) the conducting organization has, in its conduct of the fund, contravened any applicable rule, condition or direction within the meaning of subsection (2); or
(b) a request for administration of the fund is made to the Council:
(i) if the conducting organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or
(ii) if the conducting organization is a friendly society—by a resolution of the board of directors of the friendly society; or
(iii) if the conducting organization is an incorporated association—by a resolution of the members of the committee of management of the association; or
(iv) if the conducting organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or
(c) a report has been received from a liquidator under section 82YJ; or
(d) a ground specified in regulations made for the purpose of this subsection applies in respect of the fund.
(2) For the purposes of subparagraph (1)(a)(iii), an applicable rule, condition or direction, in relation to the conducting organization of a fund, means:
(a) a provision of this Act or of the regulations that applies to that organization; or
(b) a term or condition of registration imposed upon that organization by or under this Act; or
(c) a direction given to that organization by the Minister under section 73BE or, on or after the new prudential standards day, by the Council under section 73BCE or 73BCJ; or
(d) a rule of the Council made under paragraph 82G(1)(r).
(3) The Council may appoint an administrator of a registered organization if, and only if:
(a) grounds exist under subsection (1) for the appointment of an administrator of the fund conducted by the organization, and the Council is satisfied, on reasonable grounds, that:
(i) the conduct of that fund is the primary business of the organization; or
(ii) property of the fund conducted by the organization may have been invested in, or transferred to, any other business conducted by the organization; or
(iii) because of the nature of, or the manner of conducting, either the business or affairs of the fund conducted by the organization or the business or affairs of the organization generally, or because of the ownership of the property of the fund conducted by the organization and of the other property of the organization, it is necessary or convenient for the administrator to administer all of the business, affairs and property of the registered organization; or
(b) a request for administration of the organization is made to the Council:
(i) if the organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or
(ii) if the organization is a friendly society—by a resolution of the board of directors of the friendly society; or
(iii) if the organization is an incorporated association—by a resolution of the members of the committee of management of the association; or
(iv) if the organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or
(c) a report has been received from a liquidator under section 82YN; or
(d) a ground specified in regulations made for the purpose of this subsection applies in respect of the registered organization.
(4) In forming the requisite state of mind for the purpose of paragraph (1)(a) or subparagraph (3)(a)(i), (ii) or (iii), or of any regulations made for the purposes of subsection (1) or (3) that require a particular mental state, the Council can have regard:
(a) to any information in its own records; and
(b) to any report or return made to it, including any report received from an inspector under section 82W.
82XG Council may give directions to administrator
(1) The Council may give an administrator written directions concerning the exercise of the powers that are vested in the administrator.
(2) The directions given to the administrator will ordinarily be of a general nature but may, where appropriate, take into account specific circumstances relevant to the particular fund or organization under administration.
(3) The Council may also give directions to the administrator concerning the provision to the Council, from time to time, of interim reports relating to the business of the fund or organization under administration.
82XH Remuneration of administrator
(1) The Council may, by written instrument, determine:
(a) the remuneration and allowances that the administrator is to receive; and
(b) who is to pay that remuneration and those allowances, if they are not to be paid as mentioned in subsection (2).
(2) Unless the Council determines otherwise, the remuneration and allowances are to be paid out of the assets of the fund under administration or the organization under administration, as the case requires.
82XI Administrator to displace management of fund or registered organization
(1) If a person is appointed as administrator of a fund, then, for so long as the fund is under administration:
(a) the management of the fund vests in the administrator; and
(b) any officer of the conducting organization vested with the management of the fund immediately before the appointment of the administrator is, by force of this subsection, divested of that management; and
(c) the administrator is taken to be the public officer of the conducting organization in relation to the fund; and
(d) the person who was the public officer of the conducting organization immediately before that appointment ceases to be the public officer of that organization.
(2) If a person is appointed as administrator of a registered organization, then, for so long as the organization is under administration:
(a) the management of the organization vests in the administrator; and
(b) any person vested with the management of the organization immediately before the appointment of the administrator is, by force of this subsection, divested of that management; and
(c) the administrator is taken to be the public officer of the organization in relation to the fund of the organization; and
(d) the person who was the public officer of the organization immediately before that appointment ceases to be the public officer of the organization.
82XJ Administrator of fund may recommend whole organization be placed under administration
(1) A person appointed as the administrator of a fund may, at any time while that person is so appointed, recommend to the Council that an administrator should be appointed instead to administer the business, affairs and property of the conducting organization.
(2) A recommendation under subsection (1) must be in writing and must indicate the reasons why, in the opinion of the administrator, it is advisable to place the conducting organization under administration.
(3) If, having regard to the recommendation of the administrator and to the terms of subsection 82XF(3), the Council considers it appropriate to do so, the Council may appoint a person under section 82XD as administrator of the conducting organization.
(4) If a person who was appointed as administrator of a fund is subsequently appointed, in accordance with this section, as administrator of the conducting organization, all things properly done, and all decisions properly made, by the person in his or her capacity as administrator of the fund continue to have effect as if they had been done or made by the person in his or her capacity as administrator of the conducting organization.
82XK Termination of appointment of administrator
(1) The Council may, at any time, by written notice given to an administrator, terminate the appointment of the administrator with effect from a date specified in the instrument of termination.
(2) If the Council terminates the appointment of an administrator, it may appoint another administrator (the replacement administrator) to carry on the administration.
(3) Subject to subsection (4), the replacement administrator is taken to be appointed on the same terms and conditions, and to be subject to the same directions, as the previous administrator.
(4) Subsection (3) does not imply that the Council may not vary the remuneration or other terms and conditions applicable, or vary or add to the directions applicable, to the replacement administrator.
(5) If the Council terminates the appointment of an administrator of a fund or registered organization but does not appoint a replacement administrator, then, with effect from the termination:
(a) the first‑mentioned administrator is divested of the power:
(i) to control the business, affairs and property of the fund or organization; and
(ii) to carry on the business, and to manage the affairs and property, of the fund or organization;
and those powers vest once again in the officers of the conducting organization, or of the organization under administration, as the case requires; and
(b) the administrator ceases to be the public officer of the conducting organization or of the organization under administration, as the case requires, and that responsibility vests again in the public officer of that organization; and
(c) all of the other powers of the administrator in relation to the fund or organization cease.
(6) The Council must not, on the termination of the appointment of an administrator, fail to appoint a replacement administrator unless the Council is satisfied that it is, in the circumstances, in the interests of the contributors to the fund that was under administration, or the contributors to the health benefits fund of the organization that was under administration, not to appoint a replacement administrator.
Subdivision 3—Duties and powers of the administrator
82XL Main duties of administrator
The main duties of the administrator of a fund or of a registered organization are:
(a) to examine the business, affairs and property of the fund or organization; and
(b) to form an opinion as to which course of action referred to in section 82XZC is, in the circumstances, in the best interests of contributors to the fund, or to the fund conducted by the organization; and
(c) to make a final written report to the Council, in accordance with Subdivision 6, recommending that course of action.
82XM Day‑to‑day duties of administrator
(1) In the day‑to‑day administration of a fund or of a registered organization, it is the duty of the administrator to administer the fund or organization as efficiently and economically as possible.
(2) If the administrator has been appointed to administer a fund, it is the duty of the administrator, as part of the administration:
(a) to ascertain the assets and liabilities of the fund; and
(b) if the business of the fund has been mixed with other business of the conducting organization—to apportion the assets and liabilities as between the fund and that other business; and
(c) to determine, as between themselves, the respective rights and interests of the contributors to the fund.
(3) If the administrator has been appointed to administer a registered organization, it is the duty of the administrator, as a part of the administration:
(a) to ascertain the assets and liabilities of the fund of the organization and of the other business of the organization; and
(b) if the other business of the organization has been mixed with the business of the fund—to apportion the assets and liabilities as between the fund and that other business; and
(c) to determine, as between themselves, the respective rights and interests of the contributors to the fund.
82XN Powers of administrator
(1) While a fund or organization is under administration, the administrator has power, in the interests of the contributors to the fund under administration or of contributors to the fund conducted by the organization under administration, as the case requires:
(a) to control the business, affairs and property of the fund or of the organization, as the case requires; and
(b) to carry on the business of the fund or of the organization, and to manage the affairs and property of the fund or of the organization, as the case requires; and
(c) to terminate or dispose of all or any part of the business, and to dispose of all or any part of the property, of the fund or of the organization, as the case requires; and
(d) to perform any other function and exercise any other power:
(i) if it is the fund under administration—that the conducting organization or any of its officers could perform or exercise in relation to the conduct of the fund; or
(ii) if it is the organization under administration—that the organization or any of its officers could perform or exercise;
if the fund or organization, as the case requires, were not under administration.
(2) Without limiting subsection (1), the administrator of a fund also has the power to execute a document, bring or defend proceedings, or do any other thing, in the name of the conducting organization, for the purposes of the business of the fund.
(3) Without limiting subsection (1), the administrator of a registered organization also has power to do any of the following:
(a) to remove from office an officer of the organization;
(b) to appoint a person as an officer of the organization;
(c) to execute a document, bring or defend proceedings, or do any other thing, in the name of the organization, for the purposes of the business of the organization.
82XO Powers of other officers of registered organization suspended
(1) If, while a fund is under administration, a person (other than the administrator) performs or exercises, or purports to perform or exercise, a function or power of an officer of the conducting organization, without the administrator’s written approval, that person is guilty of an offence against this subsection.
Maximum penalty: Imprisonment for 6 months.
(2) If, while a registered organization is under administration, a person (other than the administrator) performs or exercises, or purports to perform or exercise, a function or power of an officer of the organization, without the administrator’s written approval, that person is guilty of an offence against this subsection.
Maximum penalty: Imprisonment for 6 months.
(3) Neither subsection (1) nor (2) implies that an officer of the organization is removed from his or her office.
(4) Section 82XI does not limit the generality of subsection (1) or (2).
(5) In this section:
officer includes:
(a) in relation to a fund under administration—a receiver, or receiver and manager, of any of the assets of the fund; and
(b) in relation to an organization under administration—a receiver, or receiver and manager, of any of the assets of the organization.
(6) A person is not an officer of a registered organization for the purposes of this section merely because he or she is an employee of the registered organization.
82XP Administrator taken to act as agent of organization
(1) When exercising a power as administrator of a fund, the administrator is taken to be acting as the agent of the conducting organization.
(2) When exercising a power as administrator of a registered organization, the administrator is taken to be acting as the agent of the organization.
82XQ Additional powers of the administrator
(1) In the application of the provisions of Division 8 of Part 5.3A of Chapter 5 of the Corporations Law, for the purpose of conferring further powers on the administrator of a fund or of a registered organization and, where appropriate, qualifying the exercise of those powers, the provisions of that Division are taken not to include section 442A or subsection 442D(1).
(2) For the purposes of section 442F of the Corporations Law as so applying, sections 128 and 129 of that Law are also taken to apply, subject to such modifications as are prescribed, as a law of the Commonwealth.
Subdivision 4—Information concerning, and records and property of, funds or organizations under administration
82XR Directors to help administrator
(1) As soon as practicable after the administration of a fund or registered organization begins, each director of the conducting organization or of the organization under administration, as the case requires, must:
(a) deliver to the administrator all records in the director’s possession that relate:
(i) to the health insurance business of the fund under administration; or
(ii) to any business conducted by the organization under administration;
as the case requires, other than records that the director is entitled to retain as against the administrator and either the conducting organization or the organization under administration, whichever is appropriate; and
(b) if the director knows of the locality of other records relating to the business of the fund or organization under administration—tell the administrator of that locality.
(2) Within 7 days after the administration of a fund or registered organization begins, or such longer period as the administrator allows, the directors of the conducting organization or of the organization under administration, as the case requires, must give to the administrator a statement about the business, property, affairs and financial circumstances of the fund or registered organization. The statement must comply with any requirements of the administrator as to its form and contents.
(3) A director of the conducting organization or of the organization under administration, as the case requires, must:
(a) attend on the administrator at such times; and
(b) give the administrator such information about the business, property, affairs and financial circumstances of the fund or organization under administration;
as the administrator reasonably requires.
(4) A person who fails, without reasonable excuse, to comply with the requirements of subsection (1), (2) or (3) is guilty of an offence against this section.
Maximum penalty: Imprisonment for 12 months.
(5) In this section:
director, in relation to a conducting organization or an organization under administration, means:
(a) if the organization is a company or friendly society—a director of the company or society; and
(b) if the organization is an incorporated association—a member of the committee of management of that association; and
(c) if the organization is an unincorporated entity—a member of the governing body of that entity.
82XS Administrator’s rights to certain records
(1) A person is not entitled, as against the administrator of a fund or organization under administration:
(a) to retain possession of records of the conducting organization relating to the fund or of records of the organization under administration, as the case requires; or
(b) to claim or enforce a lien on such records;
but such a lien is not otherwise prejudiced.
(2) Paragraph (1)(a) does not apply in relation to records of which a secured creditor of the conducting organization of a fund under administration, or of the registered organization under administration, is entitled to possession otherwise than because of a lien, but the administrator is entitled to inspect, and make copies of, such records at any reasonable time.
(3) The administrator of a fund or organization under administration may give to a person written notice requiring the person to deliver to the administrator, as specified in the notice, records so specified that are in the person’s possession.
(4) A notice under subsection (3) must specify a period of at least 3 days as the period within which the notice must be complied with.
(5) A person is guilty of an offence if:
(a) the person receives a notice under subsection (3) from the administrator of a fund or organization under administration; and
(b) the person does not comply with the notice;
except if, in relation to records to which the notice under subsection (3) relates, the person is entitled to retain possession of the records, as against the administrator and also as against either the conducting organization or the organization under administration, whichever is appropriate.
Maximum penalty: Imprisonment for 12 months.
(6) In a prosecution for an offence against subsection (5), the defendant bears the evidential burden of proving the exception set out in that subsection.
82XT Only administrator can deal with property of fund or organization under administration
(1) This section applies where:
(a) in relation to a fund under administration:
(i) the conducting organization purports to enter into; or
(ii) a person purports, on behalf of the fund or the conducting organization, to enter into;
a transaction or dealing affecting the property of the fund; or
(b) in relation to an organization under administration;
(i) the organization purports to enter into; or
(ii) a person purports, on behalf of the organization, to enter into;
a transaction or dealing affecting the property of the organization.
(2) The transaction or dealing referred to in subsection (1) is void unless:
(a) the transaction or dealing has been entered into by the administrator of the fund or organization under administration on behalf of the conducting organization, or of the organization under administration, as the case requires; or
(b) the administrator consented to the transaction or dealing before it was entered into; or
(c) the transaction or dealing was entered into by order of the Court or of the Supreme Court of a State or Territory.
(3) Subsection (2) does not apply to a payment made:
(a) by an Australian ADI out of an account kept with the ADI:
(i) by the conducting organization; or
(ii) by the organization under administration; and
(b) in good faith and in the ordinary course of the ADI’s banking business; and
(c) after the administration began but on or before the day on which:
(i) the administrator gives to the ADI written notice of the appointment that began the administration; or
(ii) the administrator notifies the appointment in a national newspaper, or in a newspaper circulating in each jurisdiction where the conducting organization or organization under administration has its registered office or carries on business;
whichever first happens.
(4) Subsection (2) has effect subject to any order that the Court makes after the purported transaction or dealing.
(5) An officer of the conducting organization of a fund under administration, or of an organization under administration, is guilty of an offence if:
(a) the officer:
(i) purported to enter into a transaction or dealing on behalf of the conducting organization or organization under administration; or
(ii) was in any way, by act or omission, directly or indirectly concerned in, or party to, a transaction or dealing; and
(b) the transaction or dealing referred to in paragraph (a) is, because of the operation of subsection (2), void, or would be void apart from subsection (4).
Maximum penalty: Imprisonment for 6 months.
(6) In this section:
Australian ADI means an authorised deposit‑taking institution within the meaning of the Banking Act 1959.
officer includes:
(a) in relation to a fund under administration—a receiver, or receiver and manager, of any of the assets of the fund; and
(b) in relation to an organization under administration—a receiver, or receiver and manager, of any of the assets of the organization.
82XU Order for compensation where officer involved in void transaction
(1) If:
(a) a court finds a person guilty of an offence constituted by a contravention of subsection 82XT(5) (including such an offence that is taken to have been committed because of section 5 of the Crimes Act 1914); and
(b) the court is satisfied that:
(i) in the case of a fund under administration—the fund or another person; or
(ii) in the case of an organization under administration—the organization or another person;
has suffered loss or damage because of the act or omission constituting the offence, the court may (whether or not it imposes a penalty) order the first‑mentioned person to pay compensation of such amount as the order specifies to the conducting organization, the organization under administration, or the other person, as the case requires.
(2) An order under subsection (1) may be enforced as if it were a judgment of the court.
(3) If, in proceedings against a person under subsection 82XT(5), it appears to the court that the person is, or might be, liable to pay compensation under subsection (1), but that:
(a) the person has acted honestly; and
(b) having regard to all the circumstances of the case, the person ought fairly to be excused from paying compensation;
the court may relieve the person either wholly or partly from a liability to pay compensation under subsection (2) to which the person would otherwise be subject, or that might otherwise be imposed on the person.
(4) If a person thinks that proceedings under subsection 82XT(5) will, or might be, begun against him or her, he or she may apply to the Court for relief.
(5) On an application under subsection (4), the Court may grant relief under subsection (3) as if proceedings under subsection 82XT(5) had been begun in the Court.
(6) For the purposes of subsection (3) as applying for the purposes of a case tried by a judge with a jury:
(a) a reference in that subsection to the court is a reference to the judge; and
(b) the relief that may be granted includes withdrawing the case in whole or in part from the jury and directing judgment to be entered for the defendant on such terms as to costs as the judge thinks appropriate.
82XV Effect of administration on the members of a registered organization
A transfer of shares in the conducting organization of a fund under administration, or in an organization that is itself under administration, or an alteration in the status of the members of such an organization, that is made during the administration of the fund or organization is void except so far as the Court otherwise orders.
82XW Protection of property during administration
(1) In the application of the provisions of Division 6 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the protection, during the administration of a fund or of a registered organization, of the property of the fund or organization, the provisions of that Division are taken not to include section 440A.
(2) In determining, for the purposes of section 440D of the Corporations Law as so applying, whether the administrator should consent to, or the Court should give leave for, a person’s beginning or continuing legal proceedings, the administrator or the Court must have regard to whether:
(a) the proceedings do, or do not, relate to any property of the fund under administration or of the fund of the organization under administration, as the case requires; and
(b) the proceedings would, or would not, be materially detrimental to the interests of contributors to the fund referred to in paragraph (a).
82XX Rights of chargee, owner or lessor of property of fund or organization under administration
(1) In the application of the provisions of Division 7 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the property of a fund or organization under administration:
(a) the provisions of that Division are taken not to include section 441A; and
(b) subsection 441D(1) is taken not to include the words following paragraph 441D(1)(b).
(2) Nothing in that Division as so applying prevents:
(a) the administrator of a fund or organization under administration giving written consent; or
(b) the Court giving leave;
for the enforcement of a charge, subject to any condition specified by the administrator or by the Court, as the case requires, if the administrator or the Court is satisfied:
(c) that the charge does not relate to the property of the fund under administration, or of the fund of the organization under administration, as the case requires; and
(d) that the enforcement of the charge will not be materially detrimental to the interests of the contributors to the fund referred to in paragraph (c).
Subdivision 5—Procedure for considering whether to execute voluntary deeds of arrangement
82XY Definitions
In this Subdivision:
creditor, in relation to a fund or organization under administration, includes a contributor to the fund under administration, or to the fund conducted by the organization under administration, as the case requires.
82XZ Administrator may convene meeting and inform creditors
(1) The administrator of a fund or organization under administration may convene a meeting of the creditors of the fund or organization to consider the possibility of the registered organization concerned executing a voluntary deed of arrangement.
(2) If the administrator decides to convene such a meeting, the administrator must:
(a) give written notice of the meeting to as many of the creditors of the fund or organization as reasonably practicable; and
(b) cause notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the business of the fund or organization under administration is carried on—in a daily newspaper that circulates generally in that jurisdiction;
at least 5 business days before the meeting.
(3) The notice given to creditors under paragraph (2)(a) must be accompanied by:
(a) a report by the administrator about the business, property, affairs and financial circumstances of the fund or organization under administration; and
(b) a statement setting out details of a proposed voluntary deed of arrangement for the fund or organization under administration; and
(c) a statement setting out the administrator’s opinion as to why it would be in the creditor’s interests for the registered organization concerned to execute such a voluntary deed of arrangement.
(4) The regulations may specify particular details that are required to be included in any statement made for the purposes of paragraph (3)(b).
(5) Without limiting, by implication, the generality of the matters that may be dealt with in a deed of arrangement, such a deed may:
(a) make provision for the continuance, on terms or conditions set out in the deed, of the business of the fund or organization under administration; or
(b) provide for the transfer to another registered organization, on terms set out in the deed, of the fund under administration or of the health benefits fund conducted by the organization under administration.
82XZA Conduct of the meeting
(1) The administrator is to preside at a meeting convened under section 82XZ.
(2) Such a meeting may be adjourned from time to time at the discretion of the administrator but may not be adjourned to a day more than 30 days after the first day on which the meeting was held.
82XZB What creditors may decide
(1) At a meeting convened under section 82XZ, the creditors must resolve whether the conducting organization of a fund under administration, or the registered organization under administration, should or should not execute the deed of arrangement specified in the resolution.
(2) The deed specified in the resolution may differ from the deed of arrangement as originally proposed by the administrator.
Subdivision 6—Administrator to report to Council
82XZC Administrator to give report to Council
(1) Subject to subsection (2), as soon as practicable, but not more than 3 months after being appointed as administrator of a fund or registered organization, the administrator must conclude the examination of the business, affairs and property of the fund or organization and make a final written report to the Council.
(2) If, on application in writing by the administrator, the Council is satisfied that there exist special circumstances justifying an extension of time, it may notify the administrator, in writing, that subsection (1) has effect as if there were substituted for 3 months (or for any other period taken to be substituted because of a previous application of this subsection) a longer period specified in the notice, and subsection (1) has effect accordingly.
(3) If the creditors of the fund or organization under administration have resolved that the conducting organization or the organization under administration execute:
(a) a voluntary deed of arrangement proposed by the administrator; or
(b) a voluntary deed of arrangement in different terms that, in the opinion of the administrator, is, in the circumstances, still protective of the interests of the contributors to the fund concerned;
the administrator must, in the report to the Council and subject to subsection (7), recommend to the Council that it approve the execution of the deed.
(4) The administrator must not recommend to the Council the approval of the execution of a deed that limits the rights of a creditor or creditors unless, in the opinion of the administrator, the fund or the organization under administration is insolvent or likely to become insolvent at some future time.
(5) For the purposes of subsection (4), and without limiting the generality of circumstances where a deed is taken to limit the rights of a creditor, a deed will be taken to limit those rights if it involves:
(a) removing or limiting the right of a creditor to the payment of a debt or other liability, or removing or limiting a creditor’s entitlement to an asset; or
(b) delaying the right of a creditor to make or enforce a claim for the payment of a debt or other liability, or delaying the right of a creditor to make or enforce the creditor’s entitlement to an asset.
(6) For the purposes of subsection (4), and without limiting the generality of circumstances where a fund or registered organization is insolvent, the fund or organization will be taken to be insolvent in any circumstances prescribed by the regulations for the purposes of this section.
(7) If:
(a) the administrator has not proposed a voluntary deed of arrangement; or
(b) the administrator has proposed such a deed but:
(i) the creditors of the fund or organization under administration have resolved to reject the deed; or
(ii) the creditors of the fund or organization under administration have resolved to vary it and the administrator is not satisfied that, as so varied, it is, in the circumstances, still protective of the interests of the contributors to the fund concerned; or
(c) the administrator has proposed such a deed but, because of the operation of subsection (4), the administrator must not recommend that the Council approve the execution of the deed;
the administrator must, in the report to the Council:
(d) recommend a course of action listed in subsection (8) that, in the opinion of the administrator, is, in the circumstances, in the best interests of contributors to the fund concerned; and
(e) set out the reasons for that recommendation.
(8) The courses of action that the administrator might recommend that the Council approve are:
(a) subject to the Court’s making an order or orders in relation to the matter:
(i) that the conducting organization or the registered organization, as the case requires, implement a scheme of arrangement (which may involve the execution of a deed in the same terms as the voluntary deed that the creditors rejected) concerning the business of the fund or organization under administration; or
(ii) that the fund or organization under administration be wound up; or
(b) that the administration cease and that the business of the fund or organization under administration be resumed by the conducting organization or the registered organization, as the case requires.
(9) Without limiting, by implication, the generality of the matters that may be dealt with in a scheme of arrangement referred to in subparagraph (8)(a)(i), such a scheme may:
(a) make provision for the continuance, on terms or conditions set out in the scheme, of the business of the fund or organization under administration; or
(b) provide for the transfer to another registered organization, on terms set out in the scheme, of the fund under administration or of the fund conducted by the organization under administration.
82XZD Dealing with the report given to the Council
(1) In deciding whether or not to approve a voluntary deed of arrangement recommended under subsection 82XZC(3), or a course of action recommended under subsection 82XZC(7), the Council may:
(a) request the administrator to provide further information on any matter; and
(b) engage any person to assist it in evaluating assessments made, or projections relied on, by the administrator in relation to matters dealt with in the report.
(2) If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is satisfied that the execution of a voluntary deed of arrangement recommended by the administrator under subsection 82XZC(3) will, in the circumstances, be in the interests of the contributors to the fund, the Council must, by written notice:
(a) inform the administrator that it approves the execution of the deed; and
(b) request the administrator to prepare the deed for execution.
(3) If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is not satisfied that the execution of a voluntary deed of arrangement recommended by the administrator under subsection 82XZC(3) will, in the circumstances, be in the interests of the contributors to the fund, the Council must, by written notice:
(a) inform the administrator to that effect; and
(b) request that the administrator:
(i) seek another meeting of the creditors to consider a further voluntary deed of arrangement; or
(ii) examine the possible courses of action outlined in subsection 82XZC(8);
and, on the basis of that further meeting or of that examination, to make a further report to the Council within a time specified by the Council.
(4) If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is satisfied that a course of action recommended by the administrator under subsection 82XZC(7) will, in the circumstances, be in the best interests of the contributors to the fund, the Council must, by written notice:
(a) inform the administrator to that effect; and
(b) either:
(i) if the course of action is of a kind specified in subparagraph 82XZC(8)(a)(i)—direct the administrator to make an application in accordance with subsection 82XZE(1) to give effect to the course of action concerned; or
(ii) if the course of action is of a kind specified in subparagraph 82XZC(8)(a)(ii)—direct the administrator to make an application in accordance with subsection 82YP(1) or 82YU(1), as the case requires, to give effect to the course of action concerned.
(5) If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is not satisfied that a course of action recommended by the administrator under subsection 82XZC(7) will, in the circumstances, be in the best interests of the contributors to the fund, the Council must, by written notice:
(a) inform the administrator to that effect; and
(b) request that the administrator:
(i) seek a meeting of the creditors to consider a voluntary deed of arrangement; or
(ii) examine other possible courses of action outlined in subsection 82XZC(8);
and, on the basis of that further meeting or of that examination, to make a further report to the Council within a time specified by the Council.
(6) If the administrator provides a further report to the Council under subsection (3) or (5), this section applies in respect of that report as if it were the original report of the administrator.
82XZE Administrator to seek order of Court in respect of certain courses of action
(1) If the Council informs the administrator that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(i) is, in the circumstances, in the best interests of contributors to the fund concerned, the administrator must apply to the Court for an order or orders to give effect to the course of action.
Note: For what is to happen if the Council informs the administrator that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(ii) is, in the circumstances, in the best interests of contributors to the fund concerned, see subsections 82YP(1) and 82YU(1).
(2) On an application for such an order or orders:
(a) the Council and any other person interested are entitled to be heard; and
(b) the Court may make such order or orders in respect of the course of action the subject of the application as it considers to be, in all the circumstances, in the interests of persons who are contributors to the fund concerned.
(3) An order under this section:
(a) is binding on all persons; and
(b) takes effect despite anything in the constitution or other rules of the registered organization concerned.
(4) For the avoidance of doubt, an order of the Court is not required:
(a) in order to give effect to a voluntary deed of arrangement—if the Council approves the execution of the deed; or
(b) in order to effect a termination of an administration that is recommended under paragraph 82XZC(8)(b)—if the Council accepts the recommendation.
Subdivision 7—Execution, variation, termination and avoidance of voluntary deeds of arrangement
82XZF Execution of voluntary deeds of arrangement
(1) In the application of the provisions of Division 10 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the execution and effect of a voluntary deed of arrangement, those provisions have effect subject to the modifications set out in this section.
(2) If the creditors, by resolution under subsection 444A(2) of that Law as so applying, appoint a person other than the administrator to be the administrator of the deed, that resolution has effect only if the Council, by notice in writing, approves the resolution.
(3) The obligations:
(a) under subsection 444A(3) of the Corporations Law as so applying, to prepare an instrument setting out the terms of the deed; and
(b) under subsection 444B(2) of that Law as so applying, to execute the deed;
have effect only if, after consideration of the report to it under section 82XZC, the Council, by notice in writing, has approved the execution of the deed.
82XZG Variation, termination and avoidance of voluntary deeds of arrangement
(1) In the application of the provisions of Division 11 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the variation, termination and avoidance of a voluntary deed of arrangement, the provisions of that Division are taken not to include section 445E.
(2) At a meeting of creditors convened under section 445F of the Corporations Law as so applying, a resolution may be passed either to terminate or to vary a voluntary deed of arrangement.
Note 1: If the resolution is to terminate the deed, the deed terminates in accordance with the resolution (see section 445C of the Corporations Law as so applying).
Note 2: If the resolution is to vary the deed, subsections (3) to (6) apply.
(3) If the resolution is a resolution to vary the voluntary deed of arrangement, that resolution takes effect only if:
(a) the administrator recommends to the Council that the Council approve the variation agreed at the meeting of creditors; and
(b) the Council approves the variation accordingly.
(4) For the purposes of subsection (3), the administrator must not recommend to the Council the approval of the variation unless the administrator is satisfied that the variation is, in the circumstances, in the interests of the contributors to the fund concerned.
(5) The Council must not approve the variation unless it is similarly so satisfied, having regard to the recommendation and to any additional information provided by the administrator, or by any person engaged to assist the Council, under subsection (6).
(6) In deciding whether to approve the variation, the Council may:
(a) request the administrator to provide further information relating to the variation or the recommendation; and
(b) engage any person to assist it in evaluating assessments made, or projections relied on, by the administrator in relation to the recommendation.
82XZH Effect of termination of voluntary deeds of arrangement
(1) If a voluntary deed of arrangement is terminated:
(a) by resolution of the creditors in accordance with subsection 82XZG(2); or
(b) by order of the Court under section 445D of the Corporations Law applying as a law of the Commonwealth; or
(c) because it is declared void by the Court in accordance with section 445G of the Corporations Law as so applying; or
(d) in circumstances specified in the deed as circumstances in which the deed is to terminate;
the administration of the fund or organization in place immediately before the deed took effect revives, unless the Council makes a determination under subsection (2).
(2) If a voluntary deed of arrangement is terminated in a circumstance referred to in paragraph (1)(a), (b), (c) or (d), the Council may make a determination, in writing, that the administration of the fund or organization in place immediately before the deed took effect does not revive.
(3) For the purposes of subsection (1), a revived administration is to be undertaken:
(a) if the administrator of the fund or organization under administration before the deed took effect is available—by that administrator; and
(b) in any other case—by a new administrator appointed by the Council in accordance with Subdivision 2.
(4) Section 82XZC applies to an administrator referred to in subsection (3) as if the administrator had been appointed as an administrator of the fund, or of the organization, as the case requires, when the deed was terminated. In particular, the administrator must, in accordance with subsection 82XZC(1), conclude the examination and make the report referred to in that subsection.
(5) The requirements of section 82XF are taken to have been satisfied in relation to the appointment of an administrator referred to in paragraph (3)(b).
Subdivision 8—Additional powers of the Court in relation to administration
82XZI Court may make orders to protect interests of contributors during administration
In the application of the provisions of Division 13 of Part 5.3A of Chapter 5 of the Corporations Law, section 447B applies as if:
(a) the power in subsection 447B(1) to make application to the Court were a power conferred on the Council; and
(b) the reference in subsections 447B(1) and (2) to such orders as the Court thinks necessary to protect the interests of creditors while the company is under administration were references to such orders as the Court thinks necessary, in all the circumstances, to protect the interests;
(i) in the case of the fund under administration—of contributors to the fund while the fund is under administration; and
(ii) in the case of an organization under administration—of contributors to the fund conducted by the organization while the organization is under administration.
Subdivision 9—Miscellaneous
82XZJ When an administration begins and ends
(1) The administration of a health benefits fund begins when an administrator is appointed under section 82XD to administer the fund.
(2) The administration of a registered organization occurs when an administrator is appointed under section 82XD to administer the organization (whether or not that administration arises out of a consideration of the issues referred to in section 82XJ).
(3) The administration of a fund or of an organization under administration ends when:
(a) a voluntary deed of arrangement is executed under section 82XZF; or
(b) the Council, under section 82XK terminates the appointment of the administrator and does not appoint a replacement administrator; or
(c) the Council notifies the administrator, under subsection 82XZD(4), that it has accepted the administrator’s recommendation, made under subsection 82XZC(7), that the administration cease; or
(d) a liquidator is appointed:
(i) in relation to the fund under administration—under section 82YQ; or
(ii) in relation to the organization under administration—under section 82YV; or
(e) the Court makes an order or orders under section 82XZE for a course of action approved by the Council and incorporated in a scheme of arrangement.
82XZK Indemnity
The administrator of a fund or of a registered organization is not subject to any action, claim or demand by, or liable to, any person in respect of anything done or omitted to be done in good faith in, or in connection with, the exercise of the powers conferred on the administrator by this Act.
82XZL Effect of things done during administration of fund or registered organization
A payment made, transaction entered into, or other act or thing done, in good faith, by, or with the consent of, the administrator of a fund or organization under administration:
(a) is valid and effectual for the purposes of this Act and for the purposes of the Corporations Law as it applies in relation to the fund or organization; and
(b) is not liable to be set aside in a winding up of the fund or organization.
82XZM Time for doing act does not run while act prevented by this Division
If:
(a) for any purpose (for example, the purposes of a law, agreement or instrument) an act must or may be done within a particular period or before a particular time; and
(b) this Division prevents the act from being done within that period or before that time;
the period is extended, or the time is deferred, because of this section, according to how long this Division prevented the act from being done.
82XZN Disclaimer of onerous property
(1) In the application of the provisions of Division 7A of Part 5.6 of Chapter 5 of the Corporations Law for the purpose of determining the power of an administrator of a health benefits fund to disclaim property of the fund, those provisions have effect as if:
(a) the administrator were the liquidator of the company that the fund is taken to constitute; and
(b) the references in subsections 568B(3) and 568E(5) to the company’s creditors were references to the contributors to the fund.
(2) In the application of the provisions of Division 7A of Part 5.6 of Chapter 5 of the Corporations Law for the purpose of determining the power of an administrator of a registered organization to disclaim property of the organization, those provisions have effect as if:
(a) the administrator were the liquidator of the company that the organization is taken to constitute; and
(b) the references in subsections 568B(3) and 568E(5) to the company’s creditors were a reference to the contributors to the fund conducted by the organization under administration.
(3) A disclaimer by an administrator has the same effect, and the administrator is under the same obligations, for the purposes of this Act, as if the disclaimer had been made under Division 7A of Part 5.6 of Chapter 5 of the Corporations Law.
Division 4—Winding up of funds and registered organizations
Subdivision 1—Preliminary
82YA Purpose of Division
The purpose of this Division is to permit the business, affairs and property either of a fund or of a registered organization to be wound up in an orderly manner that is, in the circumstances:
(a) in the case of a voluntary winding up under Subdivision 3 or 4 of this Division—not materially detrimental to the interests of contributors to the fund being wound up or conducted by the organization being wound up; and
(b) in the case of a winding up on application to the Court under Subdivision 5 or 6 of this Division—in the interests of those contributors.
82YB The basis of the law relating to winding up
(1) The winding up of the fund conducted by a registered organization that is not itself to be wound up is to be carried out in accordance with this Division.
(2) The law governing the winding up of a registered organization varies according to the nature of the registered organization concerned.
(3) If a registered organization is a company incorporated, or taken to be incorporated, under the Corporations Law of a particular State or internal Territory, the winding up of the registered organization is, subject to this Division, to be conducted in accordance with the Corporations Law of that State or internal Territory.
(4) If a registered organization is, or is taken to be, registered or incorporated as a friendly society under the law of a particular State or internal Territory relating to the registration or incorporation of friendly societies, the winding up of the registered organization is, subject to this Division, to be conducted in accordance with the provisions applicable under that law (including, to the extent that the law applies provisions of the Corporations Law, those provisions as so applied).
(5) If a registered organization is, or is taken to be, an association incorporated under the law of a particular State or internal Territory providing for the incorporation of associations, the winding up of that registered organization is, subject to this Division, to be conducted in accordance with the provisions applicable under that law (including, to the extent that the law applies provisions of the Corporations Law, those provisions as so applied).
(6) If a registered organization is an unincorporated entity:
(a) it cannot be dissolved except by order of the Court as a part of the procedure for the winding up of the organization; and
(b) the winding up of the organization is, subject to this Division, to be conducted in accordance with Part 5.7 of Chapter 5 of the Corporations Law of a State or internal Territory, being a law under which the entity may be wound up.
82YC Regulations may modify provisions of this Division for certain purposes
(1) If the provisions of this Division do not, in any particular matter, override the law of a State or internal Territory in any matter where it is necessary or convenient to do so, the regulations may provide for modification of those provisions to the extent necessary for that purpose.
(2) Modifications set out in regulations for the purposes of subsection (1) cannot:
(a) modify a provision of this Division that creates an offence; or
(b) include new provisions that create offences.
(3) This Division has effect subject to any modifications set out in regulations for the purposes of subsection (1).
(4) In this section:
modifications includes omissions, additions and substitutions.
82YD Definitions
(1) In this Division:
director, in relation to a registered organization, means:
(a) if the organization is a company or a friendly society—a director of the company or society; and
(b) if the organization is an incorporated association—a member of the committee of management of that association; and
(c) if the organization is an unincorporated entity—a member of the governing body of the entity.
(2) A reference in this Act to this Division, or to the provisions of this Division, includes a reference to any regulations that are made for the purposes of this Division.
Subdivision 2—The circumstances in which winding up can occur
82YE When winding up of funds can occur
(1) The fund of a registered organization may be wound up only in the following ways:
(a) by order of the Court on application made to the Court by the Council under secton 82YO;
(b) by order of the Court on application made to the Court by the administrator of the fund under section 82YP;
(c) on the passing of a resolution by the directors of the organization for the voluntary winding up of the fund, and the approval of that resolution by the Council, in accordance with section 82YH.
(2) If the Council or an administrator applies to the Court for the winding up of a fund, the Court may make the necessary order or orders for the winding up of that fund or organization only if it considers that such an order or orders are, in the circumstances, in the interests of the contributors to the fund.
82YF When winding up of registered organizations can occur
(1) A registered organization may be wound up only in the following ways:
(a) by order of the Court on application made to the Court by the Council under section 82YT;
(b) by order of the Court on application made to the Court by the administrator of the organization under section 82YU;
(c) in the case of a registered organization other than an unincorporated entity—on the passing of a special resolution of the members of the organization for the voluntary winding up of the organization, and the approval of that resolution by the Council, in accordance with section 82YL.
(2) If the Council or an administrator applies to the Court for the winding up of a registered organization, the Court may make the necessary order or orders for the winding up of that organization only if it considers that such an order or orders are, in the circumstances, in the interests of the contributors to the fund conducted by the organization.
(3) For the avoidance of doubt, Division 3 of Part 5.5 of Chapter 5 of the Corporations Law, or that Division as applied by another law of a State or internal Territory, does not apply in relation to the winding up of a registered organization.
Subdivision 3—Starting the voluntary winding up of health benefits funds
82YG Resolution for the voluntary winding up of fund cannot be passed in certain circumstances
A registered organization cannot resolve that the fund conducted by it be wound up voluntarily if:
(a) an application for the fund to be wound up has been made to the Court by the Council under section 82YO or by an administrator of the fund under section 82YP; or
(b) an application for the registered organization to be wound up has been made to the Court by the Council under section 82YT or by an administrator of the organization under section 82YU.
82YH Resolution for the voluntary winding up of fund
(1) Subject to section 82YG, the fund of a registered organization may be wound up voluntarily if:
(a) a majority of the directors of the organization resolve that the fund should be voluntarily wound up; and
(b) any additional approval required for the winding up of the fund under or in accordance with:
(i) the fund’s rules (if applicable); and
(ii) the organization’s rules (if applicable); and
(iii) the organization’s constitution (if applicable);
has been obtained; and
(c) the Council approves the winding up of the fund.
(2) The directors may resolve that the fund be voluntarily wound up only if they are satisfied that:
(a) the assets of the fund will be sufficient to meet the liabilities of the fund within 12 months after the commencement of the winding up; and
(b) the contributors to the fund will not suffer any material detriment, financial or otherwise, as a result of the winding up.
(3) If the directors so resolve, as soon as practicable after the resolution has been made, they must provide a copy of that resolution to the Council accompanied by:
(a) a statement as to any additional approval required for the winding up of the fund under or in accordance with:
(i) the fund’s rules (if applicable); and
(ii) the organization’s rules (if applicable); and
(iii) the organization’s constitution (if applicable);
in order for the fund of the organization to be lawfully wound up; and
(b) a declaration that states that the directors have satisfied themselves of the matters referred to in paragraphs (2)(a) and (b) and the reasons for their being so satisfied; and
(c) a statement of the affairs of the fund showing, in the prescribed form, the assets of the fund, the total amount expected to be realised from the liquidation of those assets, the liabilities of the fund and the estimated expenses of the winding up.
(4) If:
(a) additional approval is required for the winding up of the fund; and
(b) such approval involves a resolution by the members of the organization at a meeting;
the directors must, as soon as practicable, provide those members with a copy of the same information that, in accordance with subsection (3), has been given to the Council.
(5) An instrument of appointment of a liquidator setting out the terms and conditions of appointment and such other matters as are prescribed must be provided to the Council:
(a) if no additional approval is required for the winding up of the fund—by the directors as soon as practicable after the resolution referred to in subsection (2); or
(b) if additional approval is required for the winding up of the fund and that additional approval has been obtained—by the directors as soon as practicable after that additional approval is obtained.
(6) If the Council:
(a) has satisfied itself in relation to the matters referred to in paragraphs (2)(a) and (b); and
(b) has considered the information provided by directors in accordance with subsection (3); and
(c) has satisfied itself that any additional approval required for the winding up of the fund has been obtained in accordance with:
(i) the fund’s rules (if applicable); and
(ii) the organization’s rules (if applicable); and
(iii) the organization’s constitution (if applicable); and
(d) has considered the instrument of appointment entered into in accordance with subsection (5);
the Council may, by notice in writing, approve the winding up of the fund.
(7) With effect from the date of the Council’s approval of the winding up of the fund, or such later date as is specified in the notice, the appointment of the liquidator takes effect and the winding up of the fund commences.
(8) For the avoidance of doubt, any delay in the payment of a liability or debt owed to a contributor of the fund does not constitute material detriment for the purpose of paragraph (2)(b).
(9) In this section:
winding up, in relation to a fund, includes the dissolution, termination or winding up of the fund.
82YI Effect of appointing liquidator of fund
(1) On the appointment of a liquidator of a fund, the conducting organization must cease to carry on any health insurance business related to the activities of the fund except so far as is, in the opinion of the liquidator, required for the beneficial disposal or winding up of that business.
(2) Any transaction that is made without the sanction of the liquidator after the approval of the resolution is void.
(3) Subject to subsection (4), on the appointment of a liquidator of a fund, all of the powers of the directors in relation to the health insurance business of the conducting organization cease, except so far as the liquidator approves the continuance of any of those powers.
(4) If a vacancy occurs by death, resignation or otherwise, in the office of the liquidator of a fund conducted by a registered organization, the directors may, with the written approval of the Council, fill the vacancy by appointment of a liquidator and fix the remuneration to be paid to him or her.
82YJ Duty of liquidator where fund turns out to be insolvent
(1) If, at any time, the liquidator of a fund forms the opinion that the assets of the fund will not be sufficient to meet the liabilities of the fund within the period of 12 months after the commencement of the winding up, the liquidator must provide a written report to the Council stating that the liquidator is of that opinion, setting out the reasons for that opinion and recommending that the Council either:
(a) apply to the Court for the winding up of the fund; or
(b) appoint a person as administrator of the fund.
(2) The report must include a statement of the assets and liabilities of the fund.
(3) On receipt of a report by the liquidator under this section, the Council must, having regard to the matters raised in the report and to the interests of the contributors to the fund, either take the action that was recommended in the report or the alternative action that might have been so recommended.
Subdivision 4—Starting the voluntary winding up of registered organizations
82YK Resolution for the voluntary winding up of organization cannot be passed in certain circumstances
Despite section 490 of the Corporations Law, or that section as it is applied in relation to a particular registered organization, a registered organization cannot resolve that it be wound up voluntarily if an application for the organization to be wound up has been made to the Court by the Council under section 82YT or by an administrator of the organization under section 82YU.
82YL Resolution for the voluntary winding up of registered organization
(1) Subject to section 82YK, a registered organization may be wound up voluntarily if:
(a) a majority of the directors of the organization resolve that the question whether it should be voluntarily wound up should be put to its members; and
(b) upon the question being put to the members, those members resolve by special resolution that it should be voluntarily wound up; and
(c) the Council approves the special resolution of the members.
(2) The directors may resolve that the question whether the organization should be voluntarily wound up be put to members only if they are satisfied that:
(a) the assets of the organization will be sufficient to meet the liabilities of the organization within 12 months after the commencement of the winding up; and
(b) the contributors to the fund conducted by the organization will not suffer any material detriment, financial or otherwise, as a result of the winding up.
(3) If the directors so resolve, they must, in such manner and at such time as the regulations prescribe, invite the members to a meeting to vote on a proposed resolution for the voluntary winding up of the organization and, for the purposes of that meeting, give each member a copy of the proposed resolution accompanied by:
(a) a declaration that states that they have satisfied themselves of the matters referred to in paragraphs (2)(a) and (b) and that sets out the reasons for their being so satisfied; and
(b) a statement of the affairs of the organization showing, in the prescribed form, the assets of the organization, the total amount expected to be realised from the liquidation of those assets, the liabilities of the organization and the estimated expenses of the winding up; and
(c) a proposal for the appointment of a liquidator on specified terms and conditions of appointment, to take effect only if, and when, the members resolve to support the winding up and the Council approves their resolution.
(4) The directors must ensure that, as soon as practicable after the invitation to the meeting of members is made, a copy of the proposed resolution for the voluntary winding up of the organization and of the accompanying documents is given to the Council.
(5) The members of the organization may, by special resolution, after having regard to the proposed resolution of the directors and to the accompanying documents, resolve that the organization should be voluntarily wound up and, if they do so, may also, by ordinary resolution, appoint a liquidator on the terms proposed by the directors or on such other terms as they consider appropriate.
(6) If, having regard to the special resolution of the members and to the documents in support of the proposal for winding up provided by the directors, the Council is satisfied of the matters referred to in paragraphs (2)(a) and (b), the Council may, by notice in writing, approve the special resolution and the ordinary resolution appointing the liquidator.
(7) With effect from the date of the Council’s notice in writing, or such later date as is specified in the notice, the appointment of the liquidator takes effect and, in accordance with section 82YZD, the winding up of the organization commences.
(8) For the avoidance of doubt, any delay in the payment of a liability or debt owed to a contributor of the fund does not constitute material detriment for the purpose of paragraph (2)(b).
(9) For the purposes of this section, special resolution, in relation to the members of a registered organization, means a special resolution made in accordance with:
(a) if the registered organization is a company incorporated, or taken to be incorporated, under the Corporations Law of a particular State or internal Territory—the Corporations Law of that particular State or internal Territory; or
(b) if the registered organization is, or is taken to be, registered or incorporated as a friendly society under the law of a particular State or internal Territory relating to the registration or incorporation of friendly societies—the provisions applicable under that law; or
(c) if the registered organization is, or is taken to be, an association incorporated under the law of a particular State or internal Territory providing for the incorporation of associations—the provisions applicable under that law.
82YM Effect of appointing liquidator of registered organization
(1) On the appointment of a liquidator of a registered organization, the organization must cease to carry on any business of the organization except so far as is, in the opinion of the liquidator, required for the beneficial disposal of the business or the winding up of that organization.
(2) Any transaction that is made without the sanction of the liquidator after the approval of the resolution is void.
(3) Subject to subsection (4), on the appointment of a liquidator of a registered organization, all of the powers of the directors in relation to the business of the organization cease, except so far as the liquidator approves the continuance of any of those powers.
(4) If a vacancy occurs by death, resignation or otherwise in the office of the liquidator of a registered organization, any of the members may convene a general meeting for the purpose of appointing a replacement liquidator and, at that meeting, the members may, with the written approval of the Council, fill the vacancy and fix the remuneration to be paid to the replacement liquidator.
82YN Duty of liquidator where registered organization turns out to be insolvent
(1) If, at any time, the liquidator forms the opinion that the assets of a registered organization will not be sufficient to meet its liabilities within the period of 12 months after the commencement of the winding up, the liquidator must provide a written report to the Council stating that the liquidator is of that opinion, setting out the reasons for that opinion and recommending that the Council either:
(a) apply to the Court for the winding up of the organization; or
(b) appoint a person as administrator of the organization.
(2) The report must include a statement of the assets and liabilities of the registered organization.
(3) On receipt of a report by the liquidator under this section, the Council must, having regard to the matters raised in the report and to the interests of the contributors to the fund conducted by the organization, either take the action that was recommended in the report or the alternative action that might have been so recommended.
(4) This section applies to the exclusion of any duties imposed on the liquidator by section 496 of the Corporations Law or that section as it is applied in relation to a particular registered organization.
Subdivision 5—Starting the winding up of insolvent funds
82YO Application by Council to the Court for winding up a fund
(1) The Council may apply to the Court for the winding up of a fund if, and only if, the Council believes that such an application is, in the circumstances, in the interests of contributors to the fund, and:
(a) the Council is satisfied, on reasonable grounds, that:
(i) on or after the new prudential standards day there has been a breach of section 73BCD by the conducting organization in its conduct of the fund; or
(ii) on or after the new prudential standards day there has been a breach of section 73BCI by the conducting organization in its conduct of the fund; or
(iii) the conducting organization has, in its conduct of the fund, contravened any applicable rule, condition or direction within the meaning of subsection (2); or
(b) a request for the winding up of the fund is made to the Council:
(i) if the conducting organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or
(ii) if the conducting organization is a friendly society—by a resolution of the board of directors of the friendly society; or
(iii) if the conducting organization is an incorporated association—by a resolution of the members of the committee of management of the association; or
(iv) if the conducting organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or
(c) a report has been received from a liquidator under section 82YJ; or
(d) a ground specified in regulations made for the purpose of this subsection applies in respect of the fund.
(2) For the purposes of subparagraph (1)(a)(iii), an applicable rule, condition or direction, in relation to the conducting organization of a fund, means:
(a) a provision of this Act or of the regulations that applies to that organization; or
(b) a term or condition of registration imposed upon that organization by or under this Act; or
(c) a direction given to that organization by the Minister under section 73BE or, on or after the new prudential standards day, by the Council under section 73BCE or 73BCJ; or
(d) a rule of the Council made under paragraph 82G(1)(r).
(3) In forming the requisite state of mind for the purpose of paragraph (1)(a), or of any regulations made for the purposes of subsection (1) that require a particular mental state, the Council can have regard:
(a) to any information in its own records; and
(b) to any report or return made to it, including any report received:
(i) from an inspector under section 82W; or
(ii) from an administrator under section 82XZC or subsection 82XG(3).
(4) The conducting organization and any other person likely to be affected by the winding up of the fund are entitled to be heard on the application.
82YP Application by administrator to the Court for winding up of a fund under administration
(1) If the Council informs the administrator of a fund, in writing, that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(ii) is, in the circumstances, in the best interests of contributors to the fund concerned, the administrator must apply to the Court for the winding up of the fund.
(2) The Council and any other person likely to be affected by the winding up of the fund are entitled to be heard on such an application.
82YQ Orders made on applications for winding up
The Court may make an order for the winding up of a fund on an application under this Subdivision, and any related orders, only if it considers the orders to be, in the circumstances, in the interests of contributors to the fund.
82YR Scheme for winding up of fund to be prepared by liquidator
(1) If an order for the winding up of a fund is made by the Court on an application under section 82YO or 82YP, the liquidator appointed by the Court must:
(a) prepare a scheme for the winding up of the fund; and
(b) when the scheme has been prepared—apply to the Court for orders to give effect to the scheme.
(2) The conducting organization, the Council and any other person likely to be affected by the winding up of the fund are entitled to be heard on an application made by the Court under this section.
82YS Binding nature of Court orders
Any orders made by the Court under section 82YQ or 82YR:
(a) are binding on all persons; and
(b) take effect despite anything in the constitution or rules of the conducting organization.
Subdivision 6—Starting the winding up of insolvent registered organizations
82YT Application by Council to the Court for winding up of a registered organization
(1) The Council may apply to the Court for the winding up of a registered organization if, and only if:
(a) grounds exist under paragraph 82YO(1)(a) or (c) for an application to be made to the Court for the winding up of the fund conducted by that organization and the Council is satisfied, on reasonable grounds, that:
(i) the conduct of the fund is the primary business of the organization; or
(ii) property of the fund may have been invested in, or transferred to, any other business conducted by the organization; or
(iii) because of the nature of, or the manner of conducting, either the business or affairs of the fund or the business or affairs of the organization generally, or because of the ownership of the property of the fund and of the other property of the organization, it is necessary or convenient to wind up the registered organization; or
(b) a request for the winding up of the organization is made to the Council:
(i) if the organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or
(ii) if the organization is a friendly society—by a resolution of the board of directors of the friendly society; or
(iii) if the organization is an incorporated association—by a resolution of the members of the committee of management of the association; or
(iv) if the organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or
(c) a report has been received from a liquidator under section 82YN; or
(d) a ground specified in regulations made for the purpose of this subsection applies in respect of the registered organization.
(2) In forming the requisite state of mind for the purpose of subparagraph (1)(a)(i), (ii) or (iii), or of any regulations made for the purposes of subsection (1) that require a particular mental state, the Council can have regard:
(a) to any information in its own records; and
(b) to any report or return made to it, including any report received:
(i) from an inspector under section 82W; or
(ii) from an administrator under section 82XZC or subsection 82XG(3).
(3) The organization and any other person likely to be affected by the winding up of the organization are entitled to be heard on the application.
82YU Application by administrator to the Court for winding up of a registered organization under administration
(1) If the Council informs the administrator of a registered organization, in writing, that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(ii) is, in the circumstances, in the best interests of contributors to the fund conducted by the organization, the administrator must apply to the Court for the winding up of the organization.
(2) The Council and any other person likely to be affected by the winding up of the organization are entitled to be heard on such an application.
82YV Orders made on applications for winding up
The Court may make an order for the winding up of a registered organization on an application under this Subdivision, and any related orders, only if it considers the orders to be, in the circumstances, in the interests of contributors to the fund concerned.
82YW Scheme for winding up of a registered organization to be prepared by liquidator
(1) If an order for the winding up of a registered organization is made by the Court on an application under section 82YT or 82YU, the liquidator appointed by the Court must:
(a) prepare a scheme for the winding up of the organization; and
(b) when the scheme has been prepared—apply to the Court for orders giving effect to the scheme.
(2) The registered organization, the Council or any other person likely to be affected by the winding up of the organization are entitled to be heard on an application made under this section.
82YX Binding nature of orders
Orders of the Court made for the purposes of section 82YV or 82YW:
(a) are binding on all persons; and
(b) take effect despite anything in the constitution or other rules of the registered organization concerned.
Subdivision 7—Procedural provisions relating to winding up of funds or registered organizations
82YY Notification provisions
(1) If the liquidator of a fund or of a registered organization proposes to make an application to the Court for a direction in relation to the winding up of that fund or of that organization, the liquidator must give the Council written notice specifying:
(a) its intention to make that application; and
(b) the details of the proposed application.
(2) The Council may appear before the Court and be heard on the liquidator’s application.
(3) Subject to subsection (4), the Council may, at any time during the winding up of a fund or registered organization, apply to the Court for directions in relation to any matter relating to the winding up.
(4) Before the Council makes such an application, it must give the liquidator of the fund or organization concerned written notice specifying:
(a) its intention to make that application; and
(b) the details of the proposed application.
(5) The liquidator is entitled to appear before the Court and be heard on the Council’s application.
82YZ Council may require liquidator to provide information
(1) The Council may, at any time, by notice in writing given to the liquidator of a fund or of a registered organization, require the liquidator to provide information in writing about any aspect of the winding up of the fund or organization.
(2) The information required to be provided in a notice under subsection (1) must be provided by the liquidator within the period that is specified for the purpose in the notice or such longer period as the Council, in special circumstances, allows.
82YZA Liquidator of fund or registered organization to determine amounts owed to contributors
(1) For the purposes both of this Act in respect of a winding up of a fund or a registered organization and of the provisions of the Corporations Law as they apply or are applied in relation to the winding up of a fund or a registered organization, the liquidator of a fund or organization is to determine the liability of the fund or of the organization in relation to contributors in accordance with this section.
(2) For the purposes of winding up a fund, the liquidator must, having regard to the records of the registered organization that conducted the fund:
(a) determine the identity of each person who, according to those records, appears to be a contributor to the fund; and
(b) determine whether the registered organization has a liability to that person in his or her capacity as a contributor to the fund; and
(c) if the registered organization has such a liability—determine the amount of that liability.
(3) For the purposes of winding up a registered organization, the liquidator must, having regard to the records of the registered organization:
(a) determine the identity of each person who, according to those records, appears to be a contributor to the fund conducted by the organization; and
(b) determine whether the organization has a liability to that person in his or her capacity as a contributor to that fund; and
(c) if the organization has such a liability—determine the amount of that liability.
(4) A determination by the liquidator under subsection (2) or (3) must be made in accordance with the regulations (if any) that are made for the purpose of this section.
(5) The liquidator must notify each person of an amount determined under this section to be the liability of the registered organization to that person in his or her capacity as a contributor to the fund that is being wound up or that is conducted by an organization that is being wound up.
(6) If the liquidator determines an amount, then, for the purposes of winding up the fund or the registered organization:
(a) the fund or the organization, as the case requires, is taken to have a liability to the person in his or her capacity as a contributor in the amount determined by the liquidator; and
(b) subject to subsection (7), the person is bound by the liquidator’s determination.
(7) A person who is notified of an amount under this section may dispute the amount:
(a) in accordance with the applicable rules of Court; or
(b) as the Court otherwise directs in a particular case.
82YZB Application of the assets of funds in winding up situations
(1) Subject to this section, in the winding up of a fund, section 556 of the Corporations Law applies as a law of the Commonwealth, but subject to such modifications as the regulations provide, and the assets of the fund must first be applied in meeting the debts and claims identified in subsection 556(1) of that Law as so applied that constitute liabilities of the fund, in the order provided for in that subsection.
(2) Subject to this section, in the winding up of a registered organization, the assets of the fund conducted by the organization must first be applied:
(a) if the organization is a company—in accordance with subsection 556(1) of the Corporations Law; or
(b) if the organization is not a company—in accordance with that subsection as it is applied under the applicable law in relation to the organization concerned;
in meeting the debts and claims identified in that subsection, or that subsection as applied, that constitute liabilities of the fund, in the order provided for in that subsection.
(3) If any assets of a fund remain after the application of subsection (1) to the winding up of the fund, or of subsection (2) to the winding up of the registered organization conducting the fund, those assets of the fund must be applied according to the following rules:
(a) those assets are to be applied first in discharging liabilities to contributors to the fund concerned;
(b) if any of those assets remain, they are to be applied in discharging other liabilities of the fund;
(c) if, after the application of those assets according to paragraphs (a) and (b), any of those assets remain, they are to be applied:
(i) if the winding up is a voluntary winding up—in accordance with subsection (4); and
(ii) if the winding up takes place on application to the Court—in such a manner as the Court directs.
(4) For the purposes of the application of any of the assets of the fund that remain in the circumstances set out in subparagraph (3)(c)(i):
(a) if the fund is being wound up:
(i) those assets are to be applied in accordance with the provisions (if any) in the constitution and rules of the registered organization conducting the fund that deal with the application of assets of the fund on the winding up, dissolution or termination of the fund; and
(ii) if any of those assets remain after compliance with subparagraph (i), those remaining assets are to be transferred to the general assets of the registered organization; or
(b) if the registered organization conducting the fund is itself being wound up:
(i) those assets are to be applied in accordance with the provisions (if any) in the constitution and rules of the registered organization conducting the fund that deal with the application of assets of the fund on the winding up of the organization; and
(ii) if any of those assets remain after compliance with subparagraph (i), those remaining assets are to be applied in the discharge of the other liabilities of the organization.
(5) Directions for the application of assets given for the purposes of subparagraph (3)(c)(ii) are to be such directions as the Court considers equitable having regard to:
(a) the interests of contributors to the fund concerned; and
(b) if the registered organization conducting the fund is itself being wound up—the interests of any creditors of the organization whose debts have not been discharged; and
(c) the interests of members of the registered organization.
(6) In the winding up of a registered organization, any assets of the organization that are not assets of the fund of the organization are to be applied in accordance with the applicable law in relation to the organization concerned.
82YZC Liquidator to apportion liabilities between health insurance business and other businesses
(1) If the liabilities:
(a) of the conducting organization of a fund that is being wound up; or
(b) of a registered organization that is being wound up;
are referable in part to the health insurance business conducted by that registered organization and partly to other businesses conducted by that organization, the liquidator must apportion that liability as between the health insurance business and the other business conducted by the organization.
(2) In making an apportionment under subsection (1), the liquidator must comply with any directions of the Court.
Subdivision 8—Miscellaneous
82YZD When winding up of registered organizations taken to have begun
For the purposes of any law of a State or internal Territory that applies, or applies subject to this Division, to the winding up of a registered organization, that winding up is taken to have begun:
(a) if the registered organization, by special resolution, chose to wind itself up in accordance with section 82YL—on the day of the Council’s notice in writing approving the special resolution or such later day as the Council specifies in that notice; and
(b) if the winding up was ordered by the Court in accordance with section 82YT or 82YU—on the day when the order was made.
82YZE Liability of officers of registered organization for loss to health benefits fund
(1) If:
(a) a registered organization contravenes this Act in relation to the health benefits fund conducted by the organization; and
(b) the contravention results in a loss to the fund; and
(c) the Court orders that the fund or the organization be wound up;
the persons who were officers of the organization when the contravention occurred are jointly and severally liable to pay to the organization, for the benefit of the fund, an amount equal to the amount of the loss.
(2) A person is not liable under subsection (1) if the person proves that he or she used due diligence to prevent the occurrence of such a contravention.
(3) On application by the liquidator of the fund or of the registered organization, the Court may order any person liable under subsection (1) to pay to the organization, for the benefit of the fund that is being wound up, or that is conducted by the organization that is being wound up, the whole or any part of the loss.
82YZF Actions etc. to be stayed on application for winding up
If an application has been made to the Court for the winding up of a fund, all actions and the execution of all writs, summons and other processes against the registered organization conducting the fund that might affect the fund:
(a) are, by force of this section, stayed; and
(b) cannot be proceeded with without the leave of the Court or unless the Court otherwise directs.
Division 5—Miscellaneous
82ZA Order of Court to be binding on all persons
An order of the Court made under this Part, whether relating to the implementation of a scheme of arrangement prepared by the administrator of a fund or registered organization, to the winding up of a fund or registered organization or to any other matter, is binding on all persons and has effect notwithstanding anything in the constitution of a registered organization to which the order may relate or to the rules of a fund to which the order may relate.
82ZB Compensation for acquisition of property
(1) If:
(a) apart from this section, the operation of a provision of this Part would result in the acquisition of property from a person otherwise than on just terms; and
(b) the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution;
the Commonwealth is liable to pay compensation of a reasonable amount to the person in respect of the acquisition.
(2) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia for the recovery from the Commonwealth of such reasonable amount of compensation as the Court determines.
(3) In this section:
acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.
82ZC Continued application of other provisions of Act
(1) The appointment of a person as administrator of a fund or registered organization does not affect the continued operation of provisions of this Act other than the provisions of Division 3:
(a) in relation to the fund or organization under administration, including, if the organization is under administration, the fund of the organization; or
(b) in relation to the rights and obligations of persons in relation to the conducting organization of the fund under administration or of the organization under administration, as the case requires.
(2) The appointment of a person as liquidator of a fund or registered organization does not affect the continued operation of provisions of this Act other than the provisions of Division 4:
(a) in relation to the fund or organization that is being wound up including, if the organization is being wound up, the fund of the organization; or
(b) in relation to the rights and obligations of persons in relation to the fund or organization that is being wound up.
82ZD Regulations may set out modifications of this Act in relation to funds or organizations under administration or being wound up
(1) The regulations may set out modifications of this Act relating to how either or both of the following:
(a) Division 3 of Part VI;
(b) Schedule 1;
apply in relation to funds or registered organizations that are being;
(c) administered in accordance with Division 3; or
(d) wound up in accordance with Division 4.
(2) The regulations may provide for different modifications according to the nature of the funds or registered organizations that are being administered or wound up.
(3) Modifications set out in regulations for the purposes of subsection (1) cannot:
(a) modify a provision of this Act that creates an offence; or
(b) include new provisions that create offences.
(4) This Act has effect subject to any modifications set out in regulations for the purposes of subsection (1).
(5) In this section:
modifications includes omissions, additions and substitutions.
82ZE Jurisdiction of Federal Court of Australia
The Federal Court of Australia has jurisdiction to hear and determine applications under this Part and to make any necessary orders in respect of those applications.
82ZF Regulations dealing with various matters
The regulations may:
(a) make provision for, or in relation to, any of the following matters in relation to meetings required or permitted to be held by the provisions of Divisions 3 and 4:
(i) the convening, conduct of, and procedure at, a meeting;
(ii) voting at a meeting (including proxy voting);
(iii) the number of persons that constitutes a quorum at a meeting;
(iv) the sending of notices to persons entitled to attend a meeting;
(v) the lodging of copies of notices of, or resolutions passed at, a meeting; and
(b) make provision relating to the form and contents of any document or instrument required or permitted to be given to the Council or an administrator by a provision of Division 3 or 4.
47 After subsection 105AB(3)
Insert:
(3A) An application may be made to the Tribunal for review of:
(a) a decision by the Council to refuse to make a declaration under subsection 73BCD(2); or
(b) a decision by the Council to impose a condition as mentioned in subsection 73BCD(3); or
(c) a decision by the Council under subsection 73BCD(6) to refuse to revoke or vary such a declaration or condition; or
(d) if, under subsection 73BCD(7), the Council is taken to have refused to revoke or vary such a declaration or condition—the decision that the Council is taken to have made.
(3B) An application may be made to the Tribunal for review of:
(a) a decision by the Council under subsection 73BCE(7) to refuse to revoke or vary a solvency direction; or
(b) if, under subsection 73BCE(8), the Council is taken to have refused to revoke or vary such a direction—the decision that the Council is taken to have made.
(3C) An application may be made to the Tribunal for review of:
(a) a decision by the Council to refuse to make a declaration under subsection 73BCI(2); or
(b) a decision by the Council to impose a condition as mentioned in subsection 73BCI(3); or
(c) a decision by the Council under subsection 73BCI(6) to refuse to revoke or vary such a declaration or condition; or
(d) if, under subsection 73BCI(7), the Council is taken to have refused to revoke or vary such a declaration or condition—the decision that the Council is taken to have made.
(3D) An application may be made to the Tribunal for review of:
(a) a decision by the Council under subsection 73BCJ(7) to refuse to revoke or vary a capital adequacy direction; or
(b) if, under subsection 73BCJ(8), the Council is taken to have refused to revoke or vary such a direction—the decision that the Council is taken to have made.
48 Before subsection 105AB(6A)
Insert:
(6) An application may be made to the Tribunal for review of a decision by the Council to cancel the registration of a registered organization under subsection 79(7).
(6AA) An application may be made to the Tribunal for review of a decision of the Council under section 82XK to terminate the appointment of an administrator.
(6AB) An application may be made to the Tribunal for review of a decision by the Council to make, or to refuse to make, a determination under subsection 82XZH(2).
49 Transitional provision relating to persons holding office as administrator under State or Territory law on commencement of item 46
(1) If a person has been appointed as administrator of a registered organization under a law of a State or Territory and holds office as such an administrator immediately before the commencement of Part 1 of this Schedule, then, despite sections 82QC and 82XB of the National Health Act 1953 as in force after that commencement and subject to subitems (2) and (3), that administrator may continue to conduct the administration as if the law of that State or Territory relating to the administration of that registered organization had not ceased.
(2) If the Council appoints a person as administrator of a registered organization while an administration to which subitem (1) applies is continuing, then, with effect from the appointment of that person as administrator, the administration to which subitem (1) applies ceases.
(3) If the Council appoints a person as administrator of a health benefits fund while an administration to which subitem (1) applies is continuing, then, with effect from the appointment of that person as administrator, the administration to which subitem (1) applies has effect as if it were an administration only of such of the business of the conducting organization as relates to matters other than the business of the fund.
50 Transitional provision relating to applications for judicial management or winding up
(1) If an application has been made under section 82Z of the National Health Act 1953 as in force before the commencement of Part 1 of this Schedule for the judicial management of the fund of a registered organization but the Court has not, before that commencement, appointed a judicial manager, that application lapses with effect from that commencement.
(2) If, on an application for the judicial management of the fund of a registered organization made under section 82Z of the National Health Act 1953 as in force before the commencement of Part 1 of this Schedule, a person has, before that commencement, been duly appointed by the Court, sections 82Z to 82ZM of the National Health Act 1953 as so in force continue to apply in relation to that judicial management, and to any orders of the Court that may be sought by that judicial manager, on and after the commencement of Part 1 of this Schedule, as if those sections had not been repealed.
(3) If an application has been made under section 82Z of the National Health Act 1953 as in force immediately before the commencement of Part 1 of this Schedule for the winding up of the fund conducted by a registered organization, sections 82Z to 82ZM of that Act as so in force continue to apply in relation to that winding up, on and after that commencement, as if those sections had not been repealed.
(4) In this item:
Court means the Federal Court of Australia.
51 Saving provisions relating to new prudential standards
(1) In this item:
new prudential standards day has the same meaning as in subsection 4(1) of the Principal Act as amended by this Act.
Principal Act means the National Health Act 1953.
(2) Despite the repeal of section 73BAB of the Principal Act by item 3:
(a) that section is taken to have continued in force in relation to registered organizations until the new prudential standards day as if it had not been so repealed; and
(b) any regulation or other subordinate instrument made under or for the purposes of that section that was in force immediately before the repeal of the section continues in force until the new prudential standards day unless, before that day, that regulation is disallowed, or that regulation or other instrument is revoked or varied in accordance with the section as so continued in force.
(3) Despite the repeal of section 73BAC of the Principal Act by item 3:
(a) that section is taken to have continued in force in relation to registered organizations until the new prudential standards day as if it had not been so repealed; and
(b) any exemption under that section that was in force immediately before the repeal of the section continues to have effect, according to its tenor, until the end of the period specified in the exemption or until the new prudential standards day, whichever first occurs, unless that exemption is earlier revoked under the section as so continued in force; and
(c) any application for such an exemption made before the repeal of the section that had not been dealt with before the repeal is to be dealt with, on and after the repeal, in accordance with the section as continued in force.
(4) Despite:
(a) the amendment of subsection 73BEB(1) of the Principal Act by item 5; and
(b) the repeal of paragraph 82G(1)(c) of the Principal Act by item 8; and
(c) the repeal of paragraph 82G(1)(q) of the Principal Act by item 11;
the Principal Act continues to have effect, until the new prudential standards day, as if that amendment and those repeals had not been made.
(5) Despite the repeal of paragraphs 82G(1)(f) and (g) of the Principal Act by item 10, the Principal Act continues to have effect until the new prudential standards day as if item 10 had not repealed and replaced those provisions but had provided instead solely for the repeal of subparagraph 82G(1)(g)(ii) and the substitution of the following subparagraph:
(ii) to take such action as is appropriate;
Part 2—Amendments omitting references to friendly societies
National Health Act 1953
52 Paragraph 73AAB(b)
Omit “a friendly society (within the meaning of Part VIA) or”.
53 Subsection 74A(10) (paragraph (b) of the definition of officer)
Repeal the paragraph.
54 Subsection 82Q(1) (definition of friendly society)
Repeal the definition.
55 Subsection 82XB(1)
Omit “, a friendly society”.
56 Subparagraph 82XF(1)(b)(ii)
Repeal the subparagraph.
57 Subparagraph 82XF(3)(b)(ii)
Repeal the subparagraph.
58 Subsection 82XR(5) (paragraph (a) of the definition of director)
Repeal the paragraph, substitute:
(a) if the organization is a company—a director of the company; and
59 Subsection 82YB(4)
Repeal the subsection.
60 Subsection 82YD(1) (paragraph (a) of the definition of director)
Repeal the paragraph, substitute:
(a) if the organization is a company—a director of the company; and
61 Paragraph 82YL(9)(b)
Repeal the paragraph.
62 Subparagraph 82YO(1)(b)(ii)
Repeal the subparagraph.
63 Subparagraph 82YT(1)(b)(ii)
Repeal the subparagraph.
64 Regulations dealing with transitional etc. matters
The Governor‑General may make regulations dealing with matters of a transitional, saving or application nature relating to the amendments and repeals made by this Part.
Schedule 3—Private health insurance incentives
Part 1—Private Health Insurance Incentives Act 1998
1 Subsection 4‑5(1)
Repeal the subsection, substitute:
(1) You are entitled to a payment under this Chapter if:
(a) you have paid, or your employer has paid as a *fringe benefit for you, a premium under an *appropriate private health insurance policy for the whole or a part of the financial year that began on 1 July 1998 or a later financial year; and
(b) the policy was issued by a *health fund.
2 After section 4‑5
Insert:
4‑6 Receipt for payment of premiums
(1) Subject to subsection (2), a *health fund to which a premium has been paid as mentioned in subsection 4‑5(1) must, if requested to do so by the person who made the payment, give to the person a receipt for the payment in such form, and containing such information, as are determined in writing by the Managing Director.
(2) Subsection (1) does not apply if the premium to which the payment relates has been reduced under Chapter 3.
3 Subsection 6‑20(1)
Repeal the subsection (including the note), substitute:
(1) The HIC must make a decision granting or refusing the claim within 14 days after the day on which the claim is made.
4 At the end of Division 6
Add:
6‑25 Application for reconsideration of decision refusing a claim
(1) If the claim is refused, you may apply to the HIC for the HIC to reconsider the decision.
(2) The application must:
(a) be in writing; and
(b) set out the reasons for the application.
(3) The application must be made within:
(a) 28 days after the day on which you are notified of the decision; or
(b) if, either before or after the end of that period of 28 days, the HIC extends the period within which the application may be made—the extended period for making the application.
6‑30 Reconsideration by HIC
(1) Upon receiving such an application, the HIC must:
(a) reconsider the decision; and
(b) either affirm or revoke the decision.
(2) If the HIC revokes the decision, the revocation is taken to be a decision granting the claim.
(3) The HIC must give to you a notice stating its decision on the reconsideration together with a statement of the reasons for its decision.
6‑35 Deadline for reconsiderations
(1) The HIC must make its decision on reconsideration of a decision within 28 days after the day on which it received an application for reconsideration.
(2) The HIC is taken, for the purposes of this Division, to have made a decision confirming the original decision if it has not told the applicant of its decision on the reconsideration before the end of the period of 28 days.
Note: A decision confirming the original decision is reviewable under section 19‑10.
5 Subsection 8‑5(1)
Omit “written”.
6 Section 8‑10
Repeal the section.
7 Section 10‑5
Omit “for a financial year”.
8 Paragraph 10‑5(b)
Omit “, for that year,”.
9 Paragraph 10‑5(c)
Omit “for that year”.
10 Subsection 11‑5(1)
Omit “for a financial year”.
11 Subsection 11‑5(1)
Omit “for that year”.
12 Subsection 11‑5(3)
Repeal the subsection, substitute:
(3) On receiving a notice under subsection (2), the HIC must register the applicant in respect of the policy if the HIC is satisfied that the applicant is eligible to participate in the *premiums reduction scheme in respect of the policy.
(3A) If a person who is registered in respect of an *appropriate private health insurance policy becomes eligible to apply for registration under this Division in respect of another appropriate private health insurance policy issued by the *health fund that issued the first‑mentioned policy, the person is taken, by this subsection, to be registered in respect of the other policy.
13 Subsection 11‑5(4)
Omit “for a financial year”.
14 Section 11‑10
Repeal the section, substitute:
11‑10 Eligibility to apply for registration
You are eligible to apply for registration under this Division in respect of an *appropriate private health insurance policy if:
(a) you have paid, or your employer as a *fringe benefit for you has paid, a premium under the policy for the whole or a part of the financial year that began on 1 July 1998 or a later financial year; or
(b) you are covered by the policy (otherwise than as a *dependent child); or
(c) every person covered by the policy is a dependent child and you are a *parent of any one or more of them.
15 Subsection 11‑15(4)
Repeal the subsection.
16 Subsection 11‑20(1)
Repeal the subsection, substitute:
(1) A *health fund that has issued an *appropriate private health insurance policy must notify the HIC, within a period determined by the *Managing Director, if:
(a) an application is given by a person to the fund under section 11‑15 in respect of the policy; or
(b) a person who is registered under this Division in respect of the policy becomes eligible to apply for registration under this Division in respect of another appropriate private health insurance policy issued by the fund.
17 Subsection 11‑25(1)
Repeal the subsection, substitute:
(1) If the HIC refuses to register you in respect of a policy, it must, within 28 days after the day on which the refusal occurs, give to you, and to the *health fund that issued the policy, notice of the refusal together with reasons for the refusal.
18 Subsection 11‑25(2)
Omit “for the financial year”.
19 Paragraph 11‑30(1)(a)
Omit “for a financial year”.
20 Paragraph 11‑30(1)(b)
Omit “for the year”, substitute “for a financial year”.
21 Subsection 11‑30(1)
Omit “written”.
22 Subsection 11‑30(4)
Repeal the subsection, substitute:
(4) You must notify the *health fund if you no longer wish to be registered in respect of the policy.
23 Subsection 11‑40(1)
Omit “for a financial year”.
24 Subsection 11‑40(1)
Omit “for that year”.
25 At the end of section 11‑40
Add:
(3) The HIC must give notice of the revocation of a person’s registration in respect of an *appropriate private health insurance policy to the person, and to the fund that issued the policy, within 28 days after the day on which the revocation occurs.
26 Subsection 12‑5(1)
After “scheme”, insert “for that year”.
27 After subsection 12‑5(3)
Insert:
(3A) If a premium that, apart from this section, would be payable under an *appropriate private health insurance policy in respect of which a person is a *participant in the premiums reduction scheme is payable for part only of a financial year, the amount of the reduction is the amount worked out using the formula:
where:
part of year means the number of days in the part of the financial year.
whole year reduction means the amount that would have been the amount of the reduction if the premium had been payable for the whole of the financial year.
28 Section 12‑10
Repeal the section, substitute:
12‑10 Participant in the premiums reduction scheme
(1) A person is a *participant in the premiums reduction scheme for the financial year that began on 1 July 1998 in respect of an *appropriate private health insurance policy if:
(a) the person was, immediately before 1 January 1999, registered under Division 4 of the Private Health Insurance Incentives Act 1997 in respect of the policy for the year; or
(b) the person is registered under Division 11 in respect of the policy; or
(c) the person has applied to be registered under Division 11 in respect of the policy and the registration has not been refused.
(2) A person is a *participant in the premiums reduction scheme for the financial year beginning on 1 July 1999 or a later financial year in respect of an *appropriate private health insurance policy if:
(a) the person is registered under Division 11 in respect of the policy; or
(b) the person has applied to be registered under Division 11 in respect of the policy and the registration has not been refused.
29 Subsection 14‑5(1)
Omit “for that financial year”.
30 Subsection 14‑5(2)
Omit “for the financial year beginning on 1 July 1998 or a later financial year”, substitute “for the purposes of this Act”.
31 Subsection 14‑5(3)
Repeal the subsection, substitute:
(3) If the Minister approves the application, the *health fund is a participating fund.
32 Paragraph 14‑10(1)(d)
Omit “until the end of the financial year concerned”.
33 After subsection 14‑10(1)
Insert:
(1A) An undertaking given under paragraph 14‑10(1)(d) of the Private Health Insurance Incentives Act 1998 as in force before the day on which Schedule 3 to the Health Legislation Amendment Act (No. 3) 1999 received the Royal Assent is taken to comply with paragraph (1)(d) of this section even if it is expressed to apply only until the end of a financial year.
34 Subsection 14‑10(2)
Repeal the subsection.
35 Subsection 14‑15(1)
Omit “subsections (2) and (3)”, substitute “subsection (2)”.
36 Subsections 14‑15(2) and (3)
Repeal the subsections, substitute:
(2) The Minister must not approve an application by a *health fund made on or after 1 July 2000 unless the health fund provides its members with a choice of one or more of the following types of policies:
(a) a *no gap policy;
(b) a *known gap policy.
37 Subsection 14‑20
Omit “in writing”.
38 After Division 14
Insert:
Division 14A—Revocation of status of health fund as a participating fund
14A‑1 Revocation of status of participating fund
(1) If a *participating fund:
(a) has failed to comply with section 4‑6; or
(b) has failed to comply with a condition of participation in the premiums reduction scheme that is prescribed by the regulations; or
(c) does not, on and after 1 July 2000, provide its members with a choice of one or more of the following types of policies:
(i) a *no gap policy;
(ii) a *known gap policy;
the Minister may, by notice given to the fund, revoke the fund’s status as a participating fund.
(2) Upon the giving of the notice, the fund ceases to be a participating fund.
39 Subsection 15‑5(1)
Omit “a financial year for”.
40 Subsection 15‑5(2)
Omit “The HIC must pay to a *health fund”, substitute “If a *health fund makes a claim that the HIC decides is correct, the HIC must pay to the fund”.
41 Subsection 15‑20(1)
Repeal the subsection, substitute:
(1) If the HIC considers that a claim is incorrect, it may either refuse the claim or pay only such part of the claim as it is satisfied is correct.
(1A) The HIC must notify a *health fund if the HIC makes a decision referred to in subsection (1).
42 Subsection 15‑20(2)
Omit “(1)”, substitute “(1A)”.
43 Subsection 15‑20(3)
Repeal the subsection, substitute:
(3) The HIC is taken, for the purposes of this Act, to have decided that a claim is correct if the HIC does not give notice of its decision that the claim is incorrect on or before the day under subsection 15‑15(2) on or before which, if the claim were correct, it would have been required to have been paid.
44 Subsection 15‑25(1)
Omit “(1)”, substitute “(1A)”.
45 Paragraph 15‑25(2)(a)
Repeal the paragraph.
46 Subsections 15‑25(3), (4) and (5)
Repeal the subsections, substitute:
(3) As soon as practicable after receiving the request, the HIC must reconsider the decision and:
(a) affirm it; or
(b) vary it; or
(c) revoke it and make a fresh decision.
Note: Decisions on reconsideration are reviewable under section 19‑10.
(4) If the HIC varies the decision or revokes the decision and makes a fresh decision, the decision as varied, or the fresh decision, as the case may be, has effect according to its terms and is taken always to have had that effect from the time when the original decision was made.
47 Subsection 16‑5(3)
Omit “in writing”.
48 At the end of section 16‑5
Add:
(7) Without limiting the powers of the HIC under the preceding provisions of this section, the HIC may, by notice given to a *health fund, require the fund to give to the HIC, within a period specified in the notice beginning at the end of a financial year, a certificate in writing by a registered company auditor as to the correctness of the accounts and records of the fund for that year to the extent that those accounts and records deal with matters mentioned in paragraphs (2)(a), (b) and (c).
49 Subsection 16‑10(1)
Omit “written”.
50 After paragraph 18‑5(1)(b)
Insert:
(ba) a payment made to a person under Part 3 in respect of a claim that has been withdrawn under section 6‑15;
51 Paragraph 18‑5(1)(c)
Repeal the paragraph, substitute:
(c) so much of a payment made under section 15‑5 as relates to an *appropriate private health insurance policy that covers a person who was:
(i) a *participant in the premiums reduction scheme for the financial year concerned in respect of the policy; and
(ii) not eligible to participate in that scheme in respect of that policy;
(ca) so much of a payment made under section 15‑5 as relates to a premium for which a reduction was not allowable under section 12‑5;
52 Subparagraph 18‑5(1)(d)(ii)
Repeal the subparagraph, substitute:
(ii) relates to a person whose application under section 11‑15 has not been retained by the health fund as required by section 11‑50; or
53 Subparagraph 18‑5(1)(d)(iii)
Omit “to a financial year and”.
54 Paragraph 18‑5(2)(a)
Omit “or (b)”, substitute “, (b) or (ba)”.
55 Paragraph 18‑5(2)(b)
After “(1)(c),”, insert “(ca),”.
56 After subsection 18-15(1)
Insert:
(1A) Without limiting subsection (1), the *Managing Director may make a determination under paragraph (1)(b) if the Managing Director is of the opinion that information given by or on behalf of:
(a) the Commonwealth; or
(b) a *health fund;
to a person from whom an amount is recoverable about that person’s entitlements under this Act was incorrect or misleading in a material particular.
57 At the end of Division 18
Add:
18‑20 HIC may set off debts against amounts payable
(1) Despite any other provision of this Act, if:
(a) except for this section, an amount would be payable by the HIC to a person or his or her estate, or to a *health fund, under this Act; and
(b) an amount is recoverable under section 18‑5 by the Commonwealth from the person or his or her estate, or from the fund, as the case may be;
the HIC may set off the whole or a part of the amount referred to in paragraph (b) against the amount referred to in paragraph (a).
(2) If the HIC decides to make such a set-off in respect of a person or his or her estate, the *Managing Director must serve on the person or his or her legal personal representative or the legal personal representative of his or her estate a notice of the decision.
(3) If the HIC makes such a set‑off:
(a) it is liable to pay to the person or his or her estate, or to the fund, only the amount remaining after the set‑off; and
(b) the amount referred to in paragraph (1)(b) is reduced by the amount set off.
58 At the end of Division 18
Add:
18-25 Reconsideration of certain decisions under this Division
(1) You may apply to the HIC for the HIC to reconsider the following decisions:
(a) a decision that an amount is recoverable as a debt due to the Commonwealth under:
(i) paragraph 18-5(1)(a) or (b); or
(ii) paragraph 18-5(1)(f) in respect of a payment made to an individual; or
(b) a decision under subsection 18-20(1) to set off a debt against an amount otherwise payable to a person or his or her estate.
(2) The application must:
(a) be in writing; and
(b) set out the reasons for the application.
(3) The application must be made within:
(a) 28 days after the day on which you are notified of the decision; or
(b) if, either before or after the end of that period of 28 days, the HIC extends the period within which the application may be made—the extended period for making the application.
(4) Upon receiving such an application, the HIC must:
(a) reconsider the decision; and
(b) either affirm or revoke the decision.
(5) If the HIC revokes the decision, the revocation is taken to be a decision:
(a) in the case of a decision mentioned in paragraph (1)(a)—to waive the debt; or
(b) in the case of a decision mentioned in paragraph (1)(b)—not to set off a debt against an otherwise payable amount.
(6) The HIC must give you a notice stating its decision on the reconsideration together with a statement of the reasons for its decision.
(7) The HIC must make its decision on reconsideration of a decision within 28 days after the day on which it received an application for reconsideration.
(8) The HIC is taken, for the purposes of this Division, to have made a decision confirming the original decision if it has not told the applicant of its decision on the reconsideration before the end of the period of 28 days.
59 Before section 19‑5
Insert in Division 19:
19‑1 Notification requirements—health funds
(1) The HIC may, by notice given to a *health fund, require the fund to provide information specified in the notice about a person who:
(a) is covered at any time during a financial year specified in the notice by an *appropriate private health insurance policy issued by the fund; or
(b) paid premiums under such a policy.
(2) The information that the HIC may require the *health fund to provide is information relating to any of the following:
(a) the name, residential address and date of birth of each such person;
(b) the fund membership number of the policy;
(c) the name, residential address and date of birth of the person covered by the policy whom the health fund treats as the contributor in respect of the policy;
(d) the name, residential address and date of birth of any person who is a *partner of a person covered by the policy;
(e) whether the policy provides *hospital cover, *ancillary cover or *combined cover;
(f) the date on which the policy was issued;
(g) whether the policy has terminated or been suspended, and, if it has, the date on which it terminated or was suspended;
(h) the amount of the premium under the policy;
(i) the period to which the premium relates;
(j) any increase or decrease in the premium;
(k) whether a payment in respect of a premium that was due within a period specified by the HIC was not paid;
(l) any other information relevant to the operation of Chapter 2 or 3 that is determined in writing by the *Managing Director.
(3) For the purposes of paragraph (2)(l), the *Managing Director must not make a determination requiring the *health fund to provide:
(a) the *tax file number of any person; or
(b) information about the physical, psychological or emotional health of any person.
(4) Determinations under paragraph (2)(l) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
(5) The information required by a notice under subsection (1) is to be provided:
(a) in a form (including an electronic form) approved by the HIC; and
(b) within the period specified in the notice.
(6) A *health fund is guilty of an offence if:
(a) the fund is required by a notice under subsection (1) to provide information within a specified period about a person or matter; and
(b) the fund fails to comply with the requirement.
Maximum penalty: 20 penalty units.
Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Note 2: The obligation to provide information pursuant to a notice under subsection (1) is a continuing obligation and a health fund is guilty of an offence for each day, after the period specified in the notice, until the information is provided (see section 4K of the Crimes Act 1914).
19‑2 Form of notices
(1) A notice under this Act by the Minister or the HIC to a *health fund or a notice, request or application by a health fund to the Minister or the HIC may be given, served or made in writing or in an electronic form.
(2) A notice under this Act by the HIC to a person other than a *health fund or a notice, request or application by a person other than a health fund to the HIC must be in writing.
19‑3 Use of information to determine whether persons covered by private health insurance policies are eligible for medicare benefits
In determining for the purposes of this Act whether a person covered by a *private health insurance policy is an eligible person within the meaning of section 3 of the Health Insurance Act 1973, or is treated as such a person because of section 6 or 7 of that Act, the HIC may use any information that it has obtained under that Act in determining whether the person was eligible to receive medicare benefits.
60 After section 19‑5
Insert:
19‑6 Principles relating to personal information
(1) The Minister may, in writing, make principles relating to:
(a) the acquiring of personal information under or for the purposes of this Act; and
(b) the storage of, security of, access to, correction of, use of and disclosure of such personal information.
(2) A *health fund must comply with the principles.
(3) The principles are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
(4) In this section:
personal information has the same meaning as in the Privacy Act 1988.
61 Paragraph 19‑10(a)
Repeal the paragraph, substitute:
(a) a decision by the HIC under section 6‑30 confirming a decision under section 6‑20 refusing a claim;
62 Paragraph 19‑10(b)
Omit “for a financial year”.
63 Paragraph 19‑10(e)
Repeal the paragraph, substitute:
(da) a decision by the Minister under section 14A to revoke a health fund’s status as a participating fund;
(e) a decision by the HIC under subsection 15‑25(3) on reconsideration of a decision that a claim under section 15‑10 is incorrect;
64 At the end of section 19-10
Add:
; (g) a decision by the HIC under section 18-25 on reconsideration of a decision:
(i) that an amount is recoverable as a debt due to the Commonwealth under:
(A) paragraph 18-5(1)(a) or (b); or
(B) paragraph 18-5(1)(f) in respect of a payment made to an individual; or
(ii) under subsection 18-20(1) to set off a debt against an amount otherwise payable to a person or his or her estate.
65 After paragraph 19‑15(b)
Insert:
(ba) the fund membership number of the policy;
(bb) the identification code of the fund that issued the policy;
(bc) the type of membership provided by the fund in respect of the policy;
(bd) whether the policy has been terminated or is suspended;
(be) if the policy has been terminated or is suspended, the date of the termination or suspension;
66 At the end of section 19‑15
Add:
; (h) the total amounts paid by the HIC under Chapters 2 and 3 for the financial year;
(i) any other information that the Commissioner determines in writing.
(2) For the purposes of paragraph (1)(i), the *Commissioner must not make a determination requiring the HIC to provide:
(a) the *tax file number of any person; or
(b) information about the physical, psychological or emotional health of any person.
(3) Determinations under paragraph (1)(i) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
67 After section 19‑15
Insert:
19‑16 Delegation
(1) The Minister may, by writing, delegate all or any of his or her powers under this Act to:
(a) the Secretary to the Department; or
(b) the Managing Director; or
(c) an officer of, or person employed in, the Department; or
(d) a member of the staff of the HIC.
(2) The HIC may, by writing, delegate all or any of its powers under this Act to the Managing Director or to a member of its staff.
(3) The Managing Director may, by writing, delegate all or any of his or her powers under this Act to a member of the staff of the HIC.
68 Section 20‑5 (paragraph (b) of the definition of appropriate private health insurance policy)
After “6”, insert “or 7”.
69 Section 20‑5 (definition of participating fund)
Repeal the definition, substitute:
participating fund means a *health fund referred to in subsection 14‑5(1) or (3) other than such a fund whose status as a participating fund has been revoked under subsection 14A‑1(1).
Part 2—Health Insurance Commission Act 1973
70 Section 8DA
Repeal the section, substitute:
8DA Administration of the private health insurance incentives legislation
The functions of the Commission include administering the Private Health Insurance Incentives Act 1997 and the Private Health Insurance Incentives Act 1998.
Part 3—National Health Act 1953
71 Section 73ABB
Repeal the section, substitute:
73ABB Registered health benefits organization to comply with requirements of health insurance incentives legislation
It is a condition of registration of a registered organization that it must not contravene a requirement imposed on it by or under the Private Health Insurance Incentives Act 1997 or the Private Health Insurance Incentives Act 1998.
72 Paragraph 82G(1)(bb)
After “1997”, insert “or the incentive payments scheme, or the premiums reduction scheme, within the meaning of the Private Health Insurance Incentives Act 1998”.
73 Paragraph 82L(3)(a)
Repeal the paragraph, substitute:
(a) if that year was the year that commenced on 1 July 1997—persons in respect of whom private health insurance policies issued by the registered organization were in force during that year and who were participants in the incentives scheme for that year;
(aa) if that year was the year that commenced on 1 July 1998 or a later year—persons in respect of whom appropriate private health insurance policies issued by the registered organization were in force during that year;
74 Paragraph 82L(3)(c)
After “1997”, insert “, or the Private Health Insurance Incentives Act 1998,”.
75 Subsection 82L(4)
After “1997”, insert “, or the Private Health Insurance Incentives Act 1998,”.
76 Subsection 82L(5)
Repeal the subsection, substitute:
(5) In this section:
appropriate private health insurance policy means an appropriate private health insurance policy within the meaning of the Private Health Insurance Incentives Act 1998.
participant in the incentives scheme has the same meaning as in the Private Health Insurance Incentives Act 1997.
participant in the premiums reduction scheme has the same meaning as in the Private Health Insurance Incentives Act 1998.
participating fund means a participating fund within the meaning of the Private Health Insurance Incentives Act 1997 or the Private Health Insurance Incentives Act 1998, as the case may be.
private health insurance policy means a private health insurance policy within the meaning of the Private Health Insurance Incentives Act 1997.
77 At the end of subsection 82PA(2A)
Add “or the incentive payments scheme, or the premiums reduction scheme, within the meaning of the Private Health Insurance Incentives Act 1998”.
78 Subsection 82PA(2B)
After “1997”, insert “, or the Private Health Insurance Incentives Act 1998,”.
79 At the end of paragraph 82R(1)(c)
Add “or the Private Health Insurance Incentives Act 1998”.
80 At the end of section 82ZSA
Add:
; or (c) any matter arising out of or connected with the incentive payments scheme, or the premiums reduction scheme, within the meaning of the Private Health Insurance Incentives Act 1998”.
Schedule 4—The professional services review scheme
Health Insurance Act 1973
1 Section 19B
Omit “106T” (wherever occurring), substitute “106TA”.
2 Subsections 106KA(1) to (3)
Repeal the subsections, substitute:
(1) Subject to subsections (2) and (2A), if, during a particular period (the relevant period), the circumstances in which some or all of the referred services were rendered or initiated constituted a prescribed pattern of services, the conduct of the person under review in connection with rendering or initiating services during that period in those circumstances is taken, for the purposes of this Part, to have constituted engaging in inappropriate practice.
(2) If the person under review satisfies the Committee that, on a particular day or particular days during the relevant period, exceptional circumstances existed that affected the rendering or initiating of services by the person, the person’s conduct in connection with rendering or initiating services on that day or those days is not taken by subsection (1) to have constituted engaging in inappropriate practice.
(2A) However, subsection (2) does not affect the operation of subsection (1) in respect of the remaining day or days during the relevant period on which the person rendered or initiated referred services even if the circumstances in which the referred services were rendered or initiated on that day or those days would not, if considered alone, have constituted a prescribed pattern of services.
(3) The regulations may prescribe, in relation to:
(a) a particular profession; or
(b) an identified group or groups of practitioners in a particular profession;
circumstances in which services of a particular kind or description that are rendered or initiated constitute, or do not constitute, a prescribed pattern of services for the purposes of subsection (1).
[Minister’s second reading speech made in—
House of Representatives on 11 March 1999
Senate on 29 March 1999]
(29/99)
