Government guarantee (Part A policies—general insurance)
18 Government guarantee (Part A policies—general insurance)
The Treasurer guarantees the liability of a designated transferee company under a Part A policy if—
the policy was issued before the transferee company's date of divestiture; and
a written demand for payment is made within 12 months after the liability falls due (but if the liability falls due on the making of a written demand for payment, no further demand is required under this paragraph).
This guarantee does not apply to a liability—
that arises under a policy after its renewal or reinstatement after the company's date of divestiture; or
that arises under a policy from an event occurring after an extension or variation of the policy after the company's date of divestiture.
A payment or transfer of money under a Part A policy that diminishes a transferee company's liability under the policy is taken to diminish a liability guaranteed under this section before it diminishes any other liability.
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