Who does this affect?

Insurers caught by the DOFI reforms that are carrying on insurance business up to 1 July 2008.

What do you need to do?

Make an application to APRA for authorisation as a general insurer on or before 31 May 2008 to attract the benefit of the transitional arrangements contained in the draft regulations.

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Philip Ward  
Partner
T +61 2 9296 2213

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Sydney
Peter Stockdale  

Brisbane
Justin McDonnell  

Canberra
John Topfer  

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On Monday 28 April 2008 Treasury released draft regulations detailing the exemption arrangements for direct offshore foreign insurers (DOFIs). Under the draft regulations and the related amendments to the Insurance Act 1973, DOFIs that are not APRA authorised, do not fall within a proposed exemption, or do not come within the transitional arrangements, will not be able to carry on insurance business in Australia after 1 July 2008.

Assuming the draft regulations are implemented in their current form, they make available limited transitional arrangements for DOFIs that:

• are body corporates
• are carrying on insurance prior to 1 July 2008, and
• make a substantially complete application for an authorisation under section 12(1) of the Insurance Act 1973 on or before 31 May 2008.

Such DOFIs will not be required to be APRA authorised to carry on insurance business from 1 July 2008. The transitional arrangements will continue until the earliest of:

• the date the DOFI is authorised by APRA or the date APRA decides not to authorise the DOFI (whichever applies) and
• 31 December 2008,

at which time the DOFI will be required to be APRA authorised to carry on insurance business in Australia, subject to any further transitional arrangements.

DOFIs should review the draft regulations to determine whether they will fall within any of the proposed exemptions. If not, DOFIs should endeavour to apply to APRA for authorisation by 31 May 2008 to come within the transitional arrangements.

Treasury has requested submissions on the draft regulations by 19 May 2008.