Insurance Act 1973

Before determining terms for an act under subsection 62ZOF(1), the Insurance Act statutory manager must:

obtain a report meeting the requirements in subsection (2) of this section on the fair value of the shares or rights concerned from an expert who is not an associate of the statutory manager, or of the company, under Division 2 of Part 1.2 of the Corporations Act 2001; and

consider the report;

The report must set out:

the amount that is, in the expert’s opinion, the fair value for each share or right concerned; and

the reasons for forming the opinion; and

any relationship between the expert and any of the following persons:

the Insurance Act statutory manager;

a person who is an associate of the Insurance Act statutory manager under Division 2 of Part 1.2 of the Corporations Act 2001;

the body corporate;

a person who is an associate of the body corporate under Division 2 of Part 1.2 of the Corporations Act 2001;

any financial or other interest of the expert that could reasonably be regarded as being capable of affecting the expert’s ability to give an unbiased opinion in relation to the matter being reported on.

In determining for the purposes of paragraph (2)(a) the amount that is, in the expert’s opinion, the fair value for each share concerned, the expert must:

first, assess the value of the company as a whole, in accordance with the assumptions (if any) notified to the expert by the Minister for the valuation of the company; and

then allocate that value among the classes of shares in the company that either have been issued or that the Insurance Act statutory manager proposes to issue (taking into account the relative financial risk, and voting and distribution rights, of the classes); and

then allocate the value of each class pro rata among the shares in that class that either have been issued or that the Insurance Act statutory manager proposes to issue (without allowing a premium or applying a discount for particular shares in that class).

The Minister may give the expert written notice of assumptions for the valuation of the company. The Minister may, by further written notice given to the expert, revoke, but not vary, notice of the assumptions. A notice under this subsection is not a legislative instrument.

In determining for the purposes of paragraph (2)(a) the amount that is, in the expert’s opinion, the fair value for each right concerned, the expert must act in accordance with the assumptions (if any) notified to the expert by the Minister for the valuation of the right.

The Minister may give the expert written notice of assumptions for the valuation of the rights concerned. The Minister may, by further written notice given to the expert, revoke, but not vary, notice of the assumptions. A notice under this subsection is not a legislative instrument.

A contravention of subsection (1), (2), (3), (5) or (9) does not affect the validity of anything done under section 62ZOF.

APRA may determine in writing that subsection (1) does not apply in relation to an act relating to shares or rights if APRA is satisfied that delaying the act to enable compliance with that subsection in relation to the act would detrimentally affect:

policyholders with:

if the company is a general insurer—the general insurer; or

if the company is not a general insurer—the relevant general insurer mentioned in subsection 62ZOA(3); and

financial system stability in Australia.

APRA must:

publish a copy of a determination under subsection (8) in the Gazette; and

give a copy of a determination under subsection (8) to the Insurance Act statutory manager concerned (unless that manager is APRA).

A determination made under subsection (8) is not a legislative instrument.