Life Insurance Act 1995 (Cth)

Life Insurance Act 1995

No. 4, 1995

Compilation No. 69

Compilation date: 21 February 2025

Includes amendments: Act No. 14, 2025

About this compilation

This compilation

This is a compilation of the Life Insurance Act 1995 that shows the text of the law as amended and in force on 21 February 2025 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents Part 1—Preliminary 1 Short title 2 Commencement 3 Objects of Act 4 Additional operation of Act 5 Exclusion of certain State insurance 6 Extension of Act to Norfolk Island 7 General administration of Act 7A Determination that certain provisions do not apply 7B Breach of condition of a determination under section 7A 8 Dictionary 8A Approved manner and form of applications and notices Part 2—Explanation of key concepts 9 Life policy 9A Continuous disability policy 10 Issue and ownership of policies 11 Life insurance business 12 Classes of life insurance business 12A Declarations that insurance or annuity business is life insurance business 12B Declarations that other financial business is life insurance business 13 Business of a statutory fund 14 Investment account benefits, investment‑linked benefits 15 Participating, non‑participating benefits 15A Relevant group of bodies corporate 16 Related bodies corporate and subsidiaries Part 2A—Special provisions relating to life companies that are friendly societies Division 1—Preliminary 16A Overview 16B Definitions Division 2—Friendly societies and how this Act applies to them 16C What is a friendly society? 16D Act applies to friendly societies in accordance with this Part 16E Restriction on use of expression friendly society Division 3—Modified operation of key concepts 16F Issue, ownership etc. of policies Division 4—Modified operation of provisions relating to statutory funds Subdivision 1—Modifications 16G Act generally applies as if references to a statutory fund were references to an approved benefit fund 16GA Modification of section 30 16H Modification of section 34 16HA Modification of section 35 16HB Modification of section 36 16I Modification of section 38 16J Modification of section 43 16K Modification of section 45 16KA Other modifications of Part 4 Subdivision 2—Approved benefit fund rules 16L Approval of benefit fund rules 16N When benefit fund rules approved by APRA come into force 16O Benefit fund rules approved by APRA and in force form part of company's constitution 16P Amendment of approved benefit fund rules not effective unless approved by APRA 16Q Amendment of approved benefit fund rules on initiative of friendly society 16R Amendment of approved benefit fund rules as required by APRA 16T When amendment of benefit fund rules approved or determined by APRA come into force 16U Approval of consequential amendments of company's constitution 16V Consequential amendments of constitution as required by APRA 16X When consequential amendments approved or determined by APRA come into force 16Y Consequential amendments approved by APRA and in force take effect as amendments of company's constitution 16Z Contractual effect of approved benefit fund rules and policies Division 5—Modified operation of provisions relating to financial management 16ZAA Modification of Part 6 Division 6—Modified operation of provisions relating to policies 16ZAB Modification of section 198 16ZA Assignment of an interest in a benefit fund that is, because of section 16F, taken to be a policy 16ZAAA Modification of section 201 16ZAAB Modification of section 213 16ZAAC Modification of Division 7 of Part 10 16ZAAD Modification of section 226 16ZAAE Modification of section 227 16ZAAF Modification of section 229 Division 7—Other modifications 16ZAAG Modification of section 242 16ZB Certain friendly societies may continue to carry on health insurance business—modified operation of this Act 16ZC Other modifications Part 2B—Special provisions relating to Australian branches of foreign life insurance companies 16ZD Eligible foreign life insurance company 16ZE Limited application of Act to eligible foreign life insurance companies 16ZF Compliance Committee of eligible foreign life insurance company 16ZG Address for service of eligible foreign life insurance companies Part 3—Registration of life companies and their NOHCs Division 1—Registration of life companies 17 When registration is required 18 Certain activities not regarded as carrying on life business 19 Certain persons taken to carry on life business etc. 20 Application for registration 21 Decision on application for registration 22 Conditions on registration 23 Breach of registration conditions 26 When APRA may revoke registration 27 Voluntary deregistration 27A Assignment of liabilities to enable revocation Division 2—Registration of NOHCs of life companies 28A Registration as a NOHC 28B Conditions on a NOHC registration 28BA Breach of conditions on a NOHC registration 28C When APRA may revoke a NOHC registration 28D When APRA must revoke a NOHC registration 28E Continuation of body corporate's NOHC registration 28 Continuation of effect of company's registration 28AA APRA may give notice to ensure that life company has a registered NOHC Part 4—Statutory funds of life companies Division 1—General requirements 29 What is a statutory fund? 30 Outline of requirements regarding statutory funds 31 Requirement that company have statutory funds 32 Duty of company in relation to statutory funds 33 Notice to APRA when fund established 34 Assets of statutory fund 35 Identification of policies referable to statutory fund 36 Payments to statutory fund 37 Capital payments to statutory funds 38 Expenditure and application of statutory fund 38A Charges relating to derivatives 38B Friendly societies mortgaging and charging assets of approved benefit funds 39 Prohibition of reinsurance between funds 40 Mortgages etc. of assets 41 Effect of non‑compliance with section 38general 41A Effect of non‑compliance with section 38certain classes of transactions 42 Investment performance guarantee—limit of certain liabilities 43 Investment of statutory funds 43A Investment of statutory funds—investment in subsidiaries of life company 45 Transfer of assets between funds 46 Restriction on restructure or termination of statutory funds 47 Ascertainment of income and outgoings of a statutory fund Division 2—Duties and liabilities of directors etc. 48 Duty of directors in relation to statutory funds 49 APRA may give notice 50 Liability of directors 51 APRA's power to sue in the name of a company Division 3—Restructure and termination of statutory funds 52 Restructure of statutory funds 53 Termination of statutory funds Division 4—Additional requirements for transfer of policies between statutory funds by endorsement 55 Additional requirements for transfer of policies between statutory funds by endorsement Division 5—Allocation of profits and losses and capital payments 56 Interpretation 57 Obligation to allocate operating profit or loss 58 Operating profit etc. 59 Allocation of operating profit etc. 60 Basis of allocation of operating profit etc. Division 6—Distribution of retained profits and shareholders' capital 61 Interpretation 62 Distribution of retained profits 63 Distribution of shareholders' capital Part 6—Financial management of life companies etc. Division 1—Preliminary 74 Interpretation Division 2—Financial records and statements 75 Financial records—Australian and Australian/overseas funds 76 Financial records—overseas funds 76A Keeping records 77 Financial year of a life company 78 Treatment of income and outgoings relating to mixed business 79 Treatment of income or outgoings relating to 2 or more categories of business etc. 80 Basis of apportionment 81 Treatment of appreciation and depreciation of assets 83 Requirement for life company to have an auditor 83A Additional auditors 83B Compliance with prudential standards 84 Appointment of auditor 85 Ending an appointment as auditor 86 Life company must enable auditors 87 Notification of appointment etc. of auditor 88 Obligations of auditors of certain bodies to report to bodies and APRA 88A Auditor may give information to APRA 88B Duty of auditor to give information when required 89 Qualified privilege of auditors 90 Auditor must notify APRA of attempts to unduly influence etc. the auditor 91 Giving auditor false or misleading information Division 3—Appointed actuaries 93 Appointment 94 Ending an appointment as actuary 95 Notification of appointment etc. 96 Compliance with prudential standards 97 Role of actuary 98 Actuary's obligation to report to APRA 98A Appointed actuary may give information to APRA 98B Duty of appointed actuary to give information when required 99 Qualified privilege of appointed actuary Division 8—Miscellaneous 114 Method of valuing policy liabilities 124 Policy owner's right to copy of reporting documents 125 Referring matters to professional associations for auditors and actuaries 125A APRA may direct removal of auditor or actuary Part 7—Monitoring and investigation of life companies and registered NOHCs Division 1—Preliminary 126 Interpretation 127 Appointment of authorised persons 128 Associated body corporate 129 Related bodies corporate Division 2—Monitoring life companies and registered NOHCs 130 Purpose of Division 131 Requirement to give information to Regulator 132 Requirement to produce records 132A Requirement to notify APRA of certain matters 133 Access to premises 133A Enforceable undertakings Division 3—Investigation by APRA 135 Giving of show cause notice 136 Grounds for giving of show cause notice 137 Decision to investigate 138 Investigation of associated body corporate 139 Investigation procedure 140 Access to premises for purposes of investigation 141 Requirement to produce records 142 Regulator's power to require assistance 143 Application for warrant to seize records not produced 144 Grant of warrant 145 Powers if records produced or seized 146 Powers if records not produced 147 Offences related to investigations 149 Regulator must give body corporate written summary of conclusions 151 Identity cards Division 4—Special provisions relating to the execution of warrants 152 Interpretation 153 Use of equipment to examine or process things 154 Use of electronic equipment at premises 155 Compensation for damage to electronic equipment 156 Copies of seized things to be provided Division 5—Protections in relation to information 156F Self‑incrimination Part 8—Judicial management, other external administration and winding up Division 1—Judicial management 157 Application for order for judicial management 158 Order for judicial management after investigation 159 Order for judicial management on other grounds 160 Commencement of judicial management 161 Moratorium—effect of judicial management on court and tribunal proceedings 161A Moratorium—effect of judicial management on enforcement process regarding property 161B Moratorium—effect of judicial management on disposal of property 161C Moratorium—Restrictions on exercise of third party property rights 161D Moratorium—effect of judicial management on supply of essential services 161E Moratorium—effect of judicial management on annual general meeting 163 Appointment of judicial manager 164 Remuneration of judicial manager 165 Effect of judicial management on powers of officers etc. 165A Effect on external administrator of judicial manager managing company 165B Judicial management not ground for denial of obligations 166 Continued application of other Parts of Act 167 Court's control of judicial manager 168 Powers of judicial manager 168A Judicial manager's additional powers to facilitate recapitalisation 168B Considering report before acting under section 168A 168C Act under section 168A not ground for denial of obligations 169 Application by APRA for instructions to judicial manager 170 Request by APRA for information 171 Duration of judicial management 172 Cancellation of judicial management 173 Judicial manager must conduct management efficiently and economically 174 Disclaimer of onerous property 175 Report by judicial manager 176 Order of Court on report of judicial manager 177 Transfer of business to another company 178 Resignation 179 Immunity 179A Exceptions to Part IV of the Competition and Consumer Act 2010 Division 1AA—Statutory management of life company Subdivision A—General provisions relating to statutory management 179AA Consequences of inability or failure of life company etc. to meet certain requirements 179AB Start of control of body corporate's business by Life Insurance Act statutory manager 179AC Life Insurance Act statutory managers—termination of control Subdivision B—Provisions dealing with control of a body corporate's business by a Life Insurance Act statutory manager 179AD Life Insurance Act statutory manager's powers and functions 179AE Safeguards on exercise of Life Insurance Act statutory manager's powers and functions 179AF Life Insurance Act statutory manager's additional powers to facilitate recapitalisation 179AG Considering report before acting under section 179AF 179AH Act under section 179AF not ground for denying obligation 179AI APRA may require a person to give information etc. for the purposes of this Division 179AJ Administrator in control—additional powers to recommend action by APRA 179AK Life Insurance Act statutory manager's liabilities and duties 179AL Transaction by Life Insurance Act statutory manager not voidable under section 588FE of the Corporations Act 2001 179AM Administrator in control—additional duties 179AN Administrator in control—additional duties where action may affect financial system stability in Australia 179AO Termination of Life Insurance Act statutory manager's appointment 179AP Effect on directors of Life Insurance Act statutory manager taking control of a body corporate's business 179AQ Effect on external administrator of Life Insurance Act statutory manager taking control of a body corporate's business 179AR Moratorium—effect of Life Insurance Act statutory management on court and tribunal proceedings 179AS Moratorium—effect of Life Insurance Act statutory management on enforcement process regarding property 179AT Moratorium—effect of Life Insurance Act statutory management on disposal of property 179AU Moratorium—Restrictions on exercise of third party property rights 179AV Moratorium—effect of Life Insurance Act statutory management on supply of essential services 179AW Moratorium—effect of Life Insurance Act statutory management on annual general meeting 179AX Life Insurance Act statutory manager being in control not grounds for denial of obligations 179AY Application of other provisions 179AZ Costs of statutory management 179AZA APRA must report to Minister and publish information about statutory management 179AZB Exceptions to Part IV of the Competition and Consumer Act 2010 Division 1A—Other external administration 179B Relationship of this Division with Chapter 5 of the Corporations Act 2001 179C Involving APRA in proposed appointment of external administrators of life companies and NOHCs Division 2—Winding‑up 180 Winding‑up of life companies 181 Order on application by APRA 182 Operation of Corporations Act 183 Notification to APRA regarding applications by liquidator 183A Application by liquidator for directions—voluntary winding up of friendly society 183B Application by APRA—voluntary winding up of friendly society 184 Application by APRA for directions 185 APRA's power to ask for information 186 Determination of amounts to be treated as liabilities of life company 187 Application of statutory fund assets 188 Liability of directors for loss to statutory fund Part 9—Transfers and amalgamations of life insurance business 189 Interpretation 190 Transfer or amalgamation of life insurance business 191 Steps to be taken before application for confirmation 192 Actuarial report on scheme 193 Application to Court 194 Confirmation of scheme 195 Effect of confirmation etc. 196 Costs of actuary's report 197 Documents to be given to APRA in case of transfer or amalgamation Part 10—Provisions relating to policies Division 1—Issue of policies 198 Alteration of proposal and policy forms 199 Capacity of young persons to insure etc. Division 2—Assignments and mortgages 200 Assignment of policy 201 Mortgages and trusts 202 Effect of notice of trust etc. 203 Transfer of policy after change of trustee Division 2A—Restriction on assignment or commutation of payments under structured settlements and structured orders 203A Definitions 203B Application of Division to tax‑exempt annuities and lump sums 203C Assignments or commutations of tax‑exempt annuities are generally not effective 203D Assignments or commutations of tax‑exempt lump sums are not effective 203E Relationship with Division 2 Division 3—Protection of policies 204 Protection of interest of insured 205 Protection of policy money on person's death Division 4—Surrender values, paid‑up policies and non‑forfeiture of policies 206 Application of Division 207 Surrender of policies 208 Relaxation of company's obligations to surrender 209 Paid‑up policies 210 Non‑forfeiture of policies in certain cases of non‑payment of premiums Division 5—Payment of policy money 211 Probate or administration not necessary in certain cases—a single policy 212 Probate or administration not necessary in certain cases—2 or more policies 213 Death of policy owner who is not the life insured 214 Company not bound to see to the application of money paid by it 215 Power to pay money into Court 216 Unclaimed money 216AA Publication etc. of information in unclaimed money register 216A Disclosure of information relating to unclaimed money 217 No deduction in respect of other policies Division 6—Children's advancement policies 218 Interpretation 219 Property in child's advancement policy 220 Death or bankruptcy of policy owner Division 7—Lost or destroyed policy documents 221 Lost or destroyed policy—issue of replacement policy document 222 Form of replacement policy document 223 Other matters relating to certain replacement policy documents 224 Claim under policy where policy document lost or destroyed 225 Application of sections 221, 222, 223 and 224 to replacement policy document Division 8—General 226 Registers 227 Registration of policies 228 Effect of suicide on policy 229 Condition as to war risk void 230 Policies not invalidated by contraventions of the Act Part 10A—Prudential standards and directions Division 1—Prudential standards 230A APRA may make prudential standards for life companies, registered NOHCs and subsidiaries 230AAA Obligation to comply with the prudential standards Division 1A—Conversion and write‑off provisions 230AAB Definitions 230AAC Conversion and write‑off provisions 230AAD Conversion or write‑off etc. not grounds for denial of obligations Division 2—Directions Subdivision A—Recapitalisation directions 230AA Who this Subdivision applies to 230AB Recapitalisation direction by APRA 230AC Additional contents of a recapitalisation direction 230AD Compliance with a recapitalisation direction 230AE APRA must obtain expert's report on the fair value of shares etc. 230AF Determination of the fair value of shares by an expert 230AG Determination of the fair value of rights by an expert 230AH Ascertaining the fair value of other capital instruments 230AI Contravention of certain provisions does not affect the validity of recapitalisation direction etc. 230AJ Recapitalisation direction not grounds for denial of obligations 230AK Supply of information about issue and revocation of recapitalisation directions 230AL Non‑compliance with a recapitalisation direction 230AM Exceptions to Part IV of the Competition and Consumer Act 2010 Subdivision B—Other directions 230B APRA may give directions in certain circumstances 230C Direction not grounds for denial of obligations 230D Supply of information about issue and revocation of directions 230F Non‑compliance with a direction Subdivision C—Secrecy and disclosure provisions relating to all directions 231 APRA may determine that a direction is covered by secrecy provision 231A Secrecy relating to directions 231B Disclosure of publicly available information 231C Disclosure allowed by APRA 231D Disclosure to legal representative for purpose of seeking legal advice 231E Disclosure allowed by APRA Act secrecy provision 231F Disclosure in circumstances set out in the regulations 231G Disclosure for purpose 231H Exceptions operate independently Part 11—Miscellaneous 233 Operation of State and Territory laws 233A Transfer by life insurance company to statutory fund 234 Prohibition of mixed insurance business 235 Injunctions 236 Review of certain decisions 237 Constitution and procedure of Tribunal 240 Register of Life Companies and Non‑Operating Holding Companies 241 Inspection of Register etc. 242 Non‑shareholder members of life company—voting by post 245 Disqualified persons not to be directors, principal executive officers etc. of life companies 245A Court power of disqualification 245B Court power to revoke or vary a disqualification etc. 245C Privilege against exposure to penalty—disqualification under section 245A 246 Principal executive officer 246A Protection from liability—general 246B Protection from liability—directions and secrecy 246C Protection from liability—provisions do not limit each other 247 Protection of person who discloses information etc. under compulsion 248 Offences 250 Conduct by directors, employees and agents 251 Compensation for acquisition of property 251AA Act has effect despite the Corporations Act 251A Authorising contracts etc. for protecting policy owners' interests and financial system stability 251B Borrowing funds for payments under authorised contracts etc. 253 Regulations Part 12—How this Act affects existing life companies etc. 254 Companies registered under Life Insurance Act 1945 264 Saving provision: sections 83, 84 and 94 of the Life Insurance Act 1945 265 Transitional provision—industrial policies Schedule 1—Dictionary Schedule 2—Modifications relating to friendly societies Part 1—Modification of Part 4 of this Act 1 Modification of Part 4 of this Act Part 2—Modification of Part 6 of this Act 2 Sections 75 and 76 of this Act Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history