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AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY AMENDMENT REGULATIONS 2001 (NO. 2) 2001 NO. 256

STATUTORY RULES 2001 No. 256

Issued by the Authority of the Minister for Financial Services and Regulation

Australian Prudential Regulation Authority Act 1998

Australian Prudential Regulation Authority Amendment Regulations 2001 (No. 2)

Section 60 of the Australian Prudential Regulation Authority Act 1998 (the Act) provides that the Governor-General may make regulations prescribing matters, required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Act.

These Regulations allow the Australian Prudential Regulation Authority (APRA) to voluntarily disclose confidential information in its possession to the Commonwealth Commission of Inquiry, established under the Royal Commissions Act 1902 by letters patent dated 29 August 2001, into certain matters relating to the failure of HIH Insurance Group (HIH Royal Commission).

The Terms of Reference of the HIH Royal Commission require the Commissioner to inquire into the reasons for and the circumstances surrounding the failure of HIH Insurance Group, including the regulatory and prudential supervision environment relating to general insurance. This is very likely to mean that the HIH Royal Commission will require relevant information on these issues from APRA, which is the agency primarily responsible for prudential regulation.

APRA's ability to disclose information to the HIH Royal Commission is mainly governed by the secrecy provisions in section 56 of the Act, which authorises APRA to disclose information in circumstances including where:

(a)       the disclosure is for the purposes of the Act or other Acts referred to subsection 56(1), including other Acts prescribed for the purposes of subsection 56(1); and

(b)        pursuant to paragraph 56(5)(a) of the Act, a person from APRA is satisfied that the disclosure of the information, or the production of the document, will assist any agency specified in the regulations to perform its functions or exercise its powers and the disclosure or production is to that agency.

On 29 August 2001, the APRA regulations were amended to prescribe the Royal Commissions Act 1902 for the purposes of subsection 56(1).

The regulations prescribe the HIH Royal Commission for the purpose of paragraph 56(5)(a) of the Act, so that it is absolutely clear that APRA can voluntarily disclose information and produce documents to the HIH Royal Commission. This should greatly assist the HIH Royal Commission in effectively addressing its Terms of Reference.

Details of the Regulation are in the Attachment.

The Regulations commence on gazettal.

ATTACHMENT

Australian Prudential Regulation Authority Amendment Regulations 2001 (No. 2)

Regulation 1 - Name of Regulations

Regulation 1 provides for the name of the regulations.

Regulation 2 - Commencement

Regulation 2 provides that the regulations commence on gazettal.

Regulation 3 Amendment of Australian Prudential Regulation Authority Regulations 1998

Regulation 3 provides that Schedule 1 amends the Australian Prudential Regulation Authority Regulations 1998.

Schedule 1

Item 1 in Schedule 1 in paragraph 5(h) omits "Treasury." and inserts "Treasury;"

Item 2 in Schedule 1 inserts the following after paragraph 5(h)

(i) the Commission of Inquiry, established under the Royal Commissions Act 1902 by letters patent dated 29 August 2001, into certain matters relating to the failure of HIH Insurance Group.