Insurance Companies (Ratings and Inspections) Act 1994

1: Short Title and commencement
1: This Act may be cited as the Insurance Companies (Ratings and Inspections) Act 1994.
2: This Act shall come into force on the day on which it receives the Royal assent.
2: Interpretation
1: In this Act, unless the context otherwise requires,— approved agency section 17 arrange company
a: section 2 of the Companies Act 1955; or
b: section 2 as the case may be, and includes an overseas company within the meaning of section 2 continuous disability insurance contract
a: that forms part of a life insurance policy; and
b: that is for a term of not less than a year; and
c: by the terms of which a person is entitled to a benefit in the event, during the term of the contract, of the death of a person by accident or by another cause specified in the contract or of injury to or the disability of a person as the result of accident or sickness court credit watch warning current rating director
a: in relation to a company, a person occupying the position of a director of the company by whatever name called:
b: in relation to a partnership, other than a special partnership or limited partnership
c: in relation to a special partnership or limited partnership
d: in relation to a body corporate or unincorporate, other than a company or a partnership or a special partnership or limited partnership
e: in relation to any other person, that person disaster insurance general insurance insurance company Insurance Council insurance intermediary
a: who, for reward, arranges contracts of insurance in New Zealand or elsewhere; and
b: who does so as the employee of or agent for 1 or more insurers or as the agent of the insured insured insurer life insurance
a: an instrument that evidences a contract that is subject to the payment of premiums for a term dependent on the termination or continuance of human life; and
b: an instrument securing the grant of an annuity for a term dependent on the continuance of human life Minister rating
a: claims that the insurer is liable to pay at the time of the assessment, including an estimate of unreported claims; and
b: claims likely to arise in the future at the time that they arise Registrar Companies Act 1993 working day
a: Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, the Sovereign’s birthday, Labour Day, and Waitangi Day; and
b: a day in the period commencing with 25 December in any year and ending with 2 January in the following year; and
c: if 1 January in any year falls on a Friday, the following Monday; and
d: if 1 January in any year falls on a Saturday or a Sunday, the following Monday and Tuesday.
2: For the purposes of this Act, a person carries on insurance business in New Zealand, if the person is—
a: a body corporate or an association of persons incorporated or formed in New Zealand; or
b: an overseas company that is required to be registered or deemed to be registered under the Companies Act 1993
c: ordinarily resident in New Zealand;— and acts, or has at any material time acted, as an insurer in New Zealand or elsewhere, and is liable as an insurer under a contract of insurance to an insured in New Zealand.
3: A person does not carry on insurance business in New Zealand within the meaning of subsection (2) by reason only of the fact that the person is an underwriting member of the society known as Lloyds of London.
4: Where the last day of the period prescribed under section 6
5: For the purposes of subsection (2)(c), a person is ordinarily resident in New Zealand if that person—
a: is domiciled in New Zealand; or
b: is living in New Zealand and the place where that person usually lives is, and has been for the immediately preceding 12 months, in New Zealand, whether or not that person has on occasions been away from New Zealand during that period. Section 2(1) director amended 2 May 2008 section 121(2) Limited Partnerships Act 2008 Section 2(1) director amended 2 May 2008 section 121(2) Limited Partnerships Act 2008 Section 2(1) director amended 2 May 2008 section 121(2) Limited Partnerships Act 2008 Section 2(1) Minister substituted 1 October 1995 section 10(3) Department of Justice (Restructuring) Act 1995
3: Public notice
1: Where, pursuant to Part 1
a: in at least 1 issue of the Gazette
b: in at least 1 issue of a newspaper circulating in the area in which is situated—
i: the insurer’s place of business; or
ii: if the insurer has more than 1 place of business, the insurer’s principal place of business.
2: Where, pursuant to Part 1
a: in at least 1 issue of the Gazette
b: in at least 1 issue of a newspaper circulating in the area in which is situated—
i: the place of business in New Zealand of the insurer; or
ii: if the insurer has more than 1 place of business in New Zealand, the principal place of business in New Zealand of the insurer.
3: For the purposes of this section, newspaper
1: Rating of insurance companies
4: Application
1: Section 5
a: in relation to the business of life insurance carried on by the insurer:
b: to an insurer that carries on, or did at all material times carry on, insurance business only with members of a group of companies of which the insurer is, or was, also a member.
2: For the purposes of subsection (1),— group of companies holding company sections 5 6 subsidiary sections 5 6
5: Insurers to have current rating
1: Subject to section 9
2: A rating given to an insurer by an agency at a time when the agency was an approved agency does not cease to be a rating from an approved agency for the purposes of this Act by reason of the fact that the approval of that agency has expired or has been terminated under section 18
3: If an insurer to which this section applies carries on business in New Zealand without having a current rating, the insurer and every director of the insurer commits an offence and is liable on summary conviction to a fine not exceeding $100,000.
4: This section shall commence to apply to an insurer that is carrying on business on the coming into force of this Act on the date that is 12 months after the coming into force of this Act.
6: Registration of ratings
1: Every insurer must, within 5 working days after receiving notice in writing that a rating has been given by an approved agency in respect of that insurer, deliver to the Registrar for registration—
a: a certificate by the approved agency of the rating that also states the date on which the rating was given:
b: if it has not previously been delivered for registration, a copy of the rating scale of which the rating referred to in paragraph (a) forms part:
c: if it has not previously been delivered for registration, an explanation by the approved agency of the rating scale referred to in paragraph (b).
2: Every insurer must, within 5 working days after receiving notice in writing that a credit watch warning has been given by an approved agency in respect of that insurer, deliver to the Registrar for registration a certificate by the approved agency of the credit watch warning that also states the date on which it was given and the reasons for it.
3: The insurer must pay the prescribed registration fee.
4: Without limiting subsection (5), where an insurer delivers a document to the Registrar for registration under this section after the expiry of the period referred to in subsection (1) or subsection (2), as the case may be, the Registrar may require the insurer to pay by way of penalty, in addition to the prescribed fee, such amount as may be prescribed.
5: Where an insurer fails to comply with subsection (1) or subsection (2), the insurer and every director of the insurer commits an offence and is liable on summary conviction to a fine not exceeding $50,000.
7: Inspection of current ratings
The documents registered under section 6
8: Public notice to be given where rating downgraded
1: Where, for the purposes of this Act, an insurer is given a rating by an approved agency that is lower in value than the immediately preceding rating given to the insurer, the insurer must, within 10 working days after the lower rating is given, give public notice of the fact that the rating has been downgraded.
2: Any notice given by an insurer under subsection (1) may include any additional matter that the insurer considers is relevant to a proper understanding of the reasons for the downgrading of the rating.
3: Where an insurer fails to comply with subsection (1), the Registrar may give the notice required and any costs incurred by the Registrar in doing so shall be recoverable from the insurer as a debt due to the Crown.
4: Where an insurer fails to comply with subsection (1), the insurer and every director of the insurer commits an offence and is liable on summary conviction to a fine not exceeding $50,000.
9: Certain insurers not required to have current rating
1: Notwithstanding section 5
a: the insurer is not a party, in its capacity as an insurer, to a contract for any form of disaster insurance or general insurance; and
b: the insurer has delivered to the Registrar for registration a notice in the prescribed form of election by the insurer not to be rated under this Act; and
c: the election has not been revoked.
2: An insurer may at any time deliver to the Registrar for registration a notice in the prescribed form of the revocation of an election not to be rated and, if it does so, the insurer becomes subject to section 5
3: A notice under this section takes effect—
a: on the date specified in the notice, not being a date that is earlier than the date on which the notice is delivered to the Registrar for registration; or
b: if no date is specified, on the date on which the notice is registered.
10: Disclosure of current rating to insured
1: Subject to subsection (5), an insurer that is required to comply with section 5
a: the insurer’s current rating and the date on which it was given; and
b: the rating scale of which the rating referred to in paragraph (a) forms part; and
c: any credit watch warning relating to the rating referred to in paragraph (a), together with the date on which it was given and the reasons for it.
2: Where an insurance intermediary, in arranging a contract of insurance or the renewal of a contract of insurance, discloses to the insured in writing and before the contract is entered into or renewed the matters referred to in subsection (1) in relation to the proposed insurer, the insurer is deemed to have complied with that subsection.
3: Where it is not reasonably practicable for an insurer or an intermediary, as the case may be, to disclose the matters referred to in subsection (1) in writing and before the contract is entered into or renewed, that subsection shall be deemed to have been complied with if—
a: the matters referred to in that subsection (other than the rating scale) are disclosed to the insured orally before the contract is entered into or renewed; and
b: the matters referred to in that subsection are disclosed to the insured in writing as soon as it becomes practicable to do so.
4: For the purposes of this section, a matter is not to be taken as having been disclosed unless it is disclosed clearly and prominently.
5: This section shall commence to apply to an insurer that is carrying on business in New Zealand on the coming into force of this Act on the date that is 12 months after the coming into force of this Act.
11: Cancellation of insurance if current rating not disclosed
1: Where a contract of insurance is entered into or renewed, as the case may be, and the provisions of section 10
2: Where a contract of insurance is cancelled under subsection (1), the insured ceases to be liable for the payment of any premiums relating to the period commencing on the date on which the contract is cancelled and ending on the date on which the contract would have terminated, and any premiums paid by the insured to the insurer or any intermediary that relate to that period must be repaid to the insured by the insurer.
12: Disclosure by insurers not required to be rated
1: Subject to subsection (3), an insurer that is not required to have a current rating must, before entering into a contract of insurance or renewing a contract of insurance, not being a contract solely of life insurance, disclose to the insured in writing that, as a result of an election by the insurer, the insurer is not required to have a current rating.
2: Where an insurance intermediary, in arranging a contract of insurance or the renewal of a contract of insurance, discloses, in writing and before the contract is entered into or renewed, to the insured that the proposed insurer has, in accordance with this Act, elected not to have a current rating and accordingly is not required to have such a rating, that insurer shall be deemed to have complied with subsection (1).
3: Where it is not reasonably practicable for an insurer or an intermediary, as the case may be, to disclose in writing and before the contract is entered into or renewed that the insurer has, in accordance with this Act, elected not to have a current rating and accordingly is not required to have such a rating, subsection (1) shall be deemed to have been complied with if that fact is disclosed to the insured—
a: orally before the contract is entered into or renewed; and
b: in writing as soon as it becomes practicable to do so.
4: For the purposes of this section, a matter is not to be taken as having been disclosed unless it is disclosed clearly and prominently.
5: This section shall commence to apply to an insurer that is carrying on business in New Zealand on the coming into force of this Act on a date that is 12 months after the coming into force of this Act.
13: Cancellation of insurance if section 12 not complied with
1: Where a contract of insurance is entered into or renewed, as the case may be, and the provisions of section 12
2: Where a contract of insurance is cancelled under subsection (1), the insured ceases to be liable for the payment of any premiums relating to the period commencing on the date on which the contract is cancelled and ending on the date on which the contract would have terminated, and any premiums paid by the insured to the insurer or any intermediary that relate to that period must be repaid to the insured by the insurer.
14: Disclosure by insurance intermediaries effecting insurance outside New Zealand
1: Subject to subsections (2) and (3), where an insurance intermediary arranges a contract of insurance or the renewal of a contract of insurance, not being a contract solely of life insurance, between an insured and an insurer that does not carry on business in New Zealand, the insurance intermediary must, before the contract is entered into or renewed,—
a: disclose to the insured in writing—
i: the most recent rating of the insurer given by an agency generally recognised by the insurance industry in New Zealand and overseas as competent to assess the claims paying ability of insurers and the date on which it was given; and
ii: the rating scale of which the rating referred to in subparagraph (i) forms part; and
iii: any credit watch warning relating to the rating given under subparagraph (i), together with the date on which it was given and the reasons for it; or
b: disclose to the insured in writing that no such rating is available and the reasons for the fact that it is not available.
2: Where it is not reasonably practicable for an insurance intermediary to disclose the matters referred to in subsection (1) in writing and before the contract is entered into or renewed, that subsection shall be deemed to have been complied with if,—
a: in any case to which paragraph (a) of that subsection applies,—
i: the matters referred to in that paragraph (other than the rating scale) are disclosed to the insured orally before the contract is entered into or renewed; and
ii: the matters referred to in that paragraph are disclosed to the insured in writing as soon as it becomes practicable to do so; or
b: in any case to which paragraph (b) of that subsection applies,—
i: the fact that no rating is available is disclosed to the insured orally before the contract is entered into or renewed; and
ii: the matters referred to in that paragraph are disclosed in writing as soon as it becomes practicable to do so.
3: An insurance intermediary who arranges contracts of insurance or renews contracts of insurance in respect of the same risk with 2 or more insurers, is not required to comply with subsection (1) if, before the contracts are entered into or renewed, the insurance intermediary discloses to the insured in writing that, on account of the number of insurers, the matters referred to in that subsection are not being disclosed.
4: For the purposes of this section, a matter is not to be taken as having been disclosed unless it is disclosed clearly and prominently.
15: Cancellation of insurance if section 14 not complied with
1: Where a contract of insurance is entered into or renewed, as the case may be, and the provisions of section 14
2: Where a contract of insurance is cancelled under subsection (1), the insured ceases to be liable for the payment of any premiums relating to the period commencing on the date on which the contract is cancelled and ending on the date on which the contract would have terminated, and any premiums paid by the insured to the insurer or the intermediary that relate to that period must be repaid to the insured by the intermediary.
16: Restraining orders
1: The court may, on the application of a person referred to in subsection (2), make an order restraining an insurer that is carrying on insurance business in New Zealand in contravention of section 5
2: The persons who may make an application are—
a: the Registrar:
b: any other insurer:
c: a director of the insurer:
d: a person who is insured under a contract of insurance with the insurer:
e: the Insurance Council:
f: with the leave of the court, any other person.
3: If the court makes an order under subsection (1), it may make any other ancillary order it thinks fit.
4: The court may, on the application of the insurer, rescind an order made under subsection (1) if it is satisfied that the insurer has taken steps to comply and is complying with section 5
17: Approval of rating agency
1: Subject to this section, the Registrar shall, on the recommendation of the Insurance Council, approve a person or organisation as an approved agency for the purposes of this Act and more than 1 person or organisation may be so recommended or approved.
2: An approval under this section shall be for a term not exceeding 3 years.
3: The power conferred by subsection (1) is exercisable—
a: on or before or after the date on which this Act comes into force; or
b: from time to time thereafter on or before or after the expiry or termination of an existing approval.
4: Before approving a person or organisation as an approved agency for the purposes of this Act, the Registrar must be satisfied—
a: that the person or organisation has entered into a deed of agreement with the Insurance Council as to the method to be adopted and the criteria to be used in determining ratings to be given to insurers under this Act; and
b: that insurers that are required to have ratings under this Act but that are not members of the Council have been consulted about the terms of the agreement.
5: The Registrar shall keep a copy of the agreement available for inspection, without fee, by any insurer that is required to have a rating under section 5
18: Revocation of approval
1: Subject to subsection (2), the Registrar may, if satisfied that an approved agency has, without sufficient cause, failed to provide a current rating for an insurer under section 5
2: The Registrar shall not revoke the approval of an approved agency unless he or she first gives the agency notice in writing that he or she is considering revoking the approval, together with reasons, and gives the agency a proper opportunity to make representations to him or her.
19: Agreement to govern ratings
1: Every agreement referred to in section 17
a: must set out in a schedule to the agreement the method to be adopted and the criteria to be used by the approved agency in determining ratings to be given to insurers under this Act; and
b: may set out in that schedule terms applying to the provision of ratings by the approved agency.
2: The provisions of every such schedule shall be deemed to form part of every agreement entered into by an insurer and an approved agency and, in the event of any inconsistency between the provisions of the schedule and other terms of the agreement, the provisions of the schedule prevail.
20: Advertising of ratings
1: No advertisement that refers to the rating, or to any part of the rating, of an insurer shall be distributed unless the advertisement also states prominently—
a: the rating; and
b: the name of the agency by which the rating was given and whether the agency is an approved agency; and
c: the date on which the rating was given; and
d: any credit watch warning relating to the rating; and
e: that any scale of which the rating forms part is available for inspection at any office in New Zealand of the insurer or, if the insurer does not carry on insurance business in New Zealand, at any office in New Zealand of an insurance intermediary named in the advertisement.
2: Where an advertisement is distributed in contravention of subsection (1), the insurer and every director of the insurer commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
3: For the purposes of this section, an advertisement is distributed if it is communicated to the public by newspaper, magazine, brochure, pamphlet, notice, circular, radio or television broadcast, cinematograph film, computer network, or other means.
21: Registers
1: The Registrar shall cause to be kept in such office or offices of the Registrar as he or she determines such registers as are necessary for the purposes of this Part.
2: Part 20
a: every register kept under subsection (1); and
b: the registration and inspection of documents under this Part.
22: Defences
1: It is a defence to an insurer or a director charged with an offence against section 5(3) section 9(1)
2: It is a defence to a director charged with an offence against section 5(3) section 6(5) section 8(4)
a: the insurer took all reasonable and proper steps to comply; or
b: he or she took all reasonable and proper steps to ensure that the insurer complied; or
c: in the circumstances, he or she could not reasonably have been expected to ensure that the insurer complied.
3: It is a defence to an insurer or a director, as the case may be, charged with an offence against section 20(2)
a: the advertisement was distributed without the knowledge of the insurer or the director; or
b: in all the circumstances, the insurer or director should be excused from liability.
23: No contracting out
This Part has effect despite—
a: any provision to the contrary in any agreement; and
b: the proper law of any contract of insurance being the law of a country other than New Zealand.
24: Review of this Part and Insurance Companies’ Deposits Act 1953
The Minister shall, within 6 months after the expiry of the period of 2 years following the first approval of an approved agency under section 17 Insurance Companies’ Deposits Act 1953
25: Regulations
The Governor-General may from time to time, by Order in Council, make regulations—
a: prescribing the fee payable under subsection (3) of section 6
b: prescribing the fee payable under section 7
c: prescribing amounts payable under subsection (4) of section 6
d: prescribing the form of notice under subsection (1)(b) or subsection (2) of section 9
2: Inspection of insurance companies
26: Registrar’s powers of inspection
1: The Registrar or a person authorised by the Registrar may, for the purpose of determining whether an insurance company is unable to pay its debts, do any of the following:
a: require the company or an employee of the company to produce for inspection relevant documents within the possession or control of the company or that officer; or
b: require any other person, including a person carrying on the business of banking, to produce for inspection relevant documents within that person’s possession or control; or
c: inspect and take copies of relevant documents; or
d: take possession of relevant documents and remove them from the place where they are kept, and retain them for a reasonable time, for the purpose of taking copies of them.
2: Nothing in this section limits or affects the Inland Revenue Department Act 1974 or the Statistics Act 1975
3: A person must not obstruct or hinder the Registrar or a person authorised by the Registrar while exercising a power conferred by subsection (1).
4: A person, not being a company, who fails to comply with a requirement of paragraph (a) or paragraph (b) of subsection (1) commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
5: If an insurance company fails to comply with a requirement of paragraph (a) of subsection (1) or a company fails to comply with a requirement of paragraph (b) of that subsection, as the case may be,—
a: the company commits an offence and is liable on summary conviction to a fine not exceeding $10,000:
b: every director of the company commits an offence and is liable on summary conviction to a fine not exceeding $10,000 unless the director proves that—
i: the company took all reasonable and proper steps to ensure that the requirement would be complied with; or
ii: he or she took all reasonable steps to ensure that the company complied with the requirement; or
iii: in the circumstances, he or she could not reasonably have been expected to take steps to ensure that the company complied with the requirement.
6: Every person who contravenes subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
7: In this section, relevant document
a: the company; or
b: money or other property that is, or has been, managed, supervised, controlled or held in trust by or for the company. 1993 No 105 s 365
27: Disclosure of information and reports
1: A person authorised by the Registrar for the purposes of section 26
a: obtained a document or information in the course of making an inspection under that section; or
b: prepared a report in relation to an inspection under that section— must, if directed to do so by the Registrar, give the document, information, or report to—
c: the Minister; or
d: the chief executive of the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act; or
e: any person authorised by the Registrar to receive the document, information, or report for the purposes of this Part or in connection with the exercise of powers conferred by this Part; or
f: a liquidator for the purposes of the liquidation of the company; or
g: any person authorised by the Registrar to receive the document, information, or report for the purposes of detecting offences against any Act.
2: A person authorised by the Registrar for the purposes of section 26
a: obtained a document or information in the course of making an inspection under that section; or
b: prepared a report in relation to an inspection under that section— must give the document, information, or report to the Registrar, a Deputy Registrar of Companies, a District Registrar of Companies, or an Assistant Registrar of Companies, when directed to do so by any person holding any of those offices.
3: A person authorised by the Registrar for the purposes of section 26
a: obtained a document or information in the course of making an inspection under that section; or
b: prepared a report in relation to an inspection under that section— must not disclose that document, information, or report except—
c: in accordance with subsection (1) or subsection (2); or
d: subject to the approval of the Registrar, with the consent of the person to whom it relates; or
e: subject to the approval of the Registrar, for the purposes of this Part or in connection with the exercise of powers conferred by this Part; or
f: to the extent that the information, or information contained in the document or report, is available under any Act or in a public document; or
g: in the course of criminal proceedings; or
h: subject to the approval of the Registrar, for the purpose of detecting offences against any Act.
4: A person who fails to comply with this section commits an offence and is liable on summary conviction to a fine not exceeding $10,000. 1993 No 105 s 366 Section 27(1)(d) substituted 1 October 1995 section 10(3) Department of Justice (Restructuring) Act 1995
28: Application of Official Information Act 1982 and Privacy Act 1993
1: This section applies to—
a: the Minister; and
b: the chief executive of the department of State that is for the time being responsible for the administration of this Act; and
c: the Registrar; and
d: a Deputy Registrar of Companies; and
e: a District Registrar of Companies; and
f: an Assistant Registrar of Companies.
2: Notwithstanding the Official Information Act 1982 Privacy Act 1993 section 26
3: Notwithstanding the Official Information Act 1982 section 26
a: the disclosure of that information would not be likely to prejudice the commercial position of any person; and
b: there is no other good reason for withholding that information under that Act. 1993 No 105 s 367 Section 28(1) substituted 1 October 1995 section 10(3) Department of Justice (Restructuring) Act 1995
29: Appeals from decisions under section 28
1: A person who is aggrieved by a refusal to disclose a document, information, or report under section 28
2: On hearing the appeal, the court may confirm the refusal, or give such directions, or make such determination in the matter as the court thinks fit. 1993 No 105 s 368
30: Inspector’s report admissible in liquidation proceedings
1: Notwithstanding any other Act or rule of law, a report prepared by a person in relation to an inspection carried out by him or her under section 26
a: in the case of a company within the meaning of section 2 of the Companies Act 1955, under section 211 of that Act; or
b: in the case of a company within the meaning of section 2 section 241
c: in the case of an overseas company within the meaning of section 2 section 342
d: in the case of an association, under section 17A
2: At the hearing of the application, evidence that the insurance company was unable to pay its debts at the end of the financial year to which the most recent statement of financial position Life Insurance Act 1908 Insurance Companies’ Deposits Act 1953 Section 30(2) amended 1 October 1997 section 6(1) Financial Reporting Amendment Act 1997
31: Appeals against exercise of powers under section 26
1: A person who is aggrieved by the exercise by the Registrar or a person appointed by the Registrar of a power conferred by section 26
2: On hearing the appeal, the court may approve the exercise of the power or may give such directions or make such determination in the matter as the court thinks fit. 1993 No 105 s 370
32: Exercise of powers under section 26 not affected by appeal
1: Subject to subsection (2), but notwithstanding any other provision of any Act or any rule of law, where a person appeals or applies to the court in relation to the exercise by the Registrar or a person authorised by the Registrar of a power conferred by section 26
a: the Registrar, or that person, may continue to exercise the powers under that section as if no such appeal or application had been made; and
b: no person is excused from fulfilling an obligation under that section by reason of that appeal or application.
2: If the appeal or application is allowed or granted, as the case may be,—
a: the Registrar must ensure that, forthwith after the decision of the court is given, any copy of a document taken or retained by the Registrar, or by a person authorised by the Registrar in respect of the exercise of that power, is destroyed; and
b: no information acquired under that section in relation to the exercise of that power is admissible in evidence in any proceedings unless the court hearing the proceedings in which it is sought to adduce the evidence is satisfied it was not obtained unfairly. 1993 No 105 s 371
3: Miscellaneous
33: Application for shares in, or membership of, company not to be contained in proposal for insurance
1: A form of proposal for insurance that contains or purports to be an application for shares in or membership of a company must not be issued by or on behalf of the company.
2: Where any person makes a proposal for insurance to a company, the company must not allot shares to that person or admit that person to the membership of the company without first receiving an application for shares or membership that is contained in a document separate from the proposal for insurance.
3: If a company contravenes this section,—
a: the company commits an offence and is liable on summary conviction to a fine not exceeding $10,000:
b: every director of the company commits an offence and is liable on summary conviction to a fine not exceeding $10,000 unless the director shows that—
i: the company took all reasonable and proper steps to ensure that the requirements of this section would be complied with; or
ii: he or she took all reasonable steps to ensure that the company complied with the requirements of this section; or
iii: in the circumstances, he or she could not reasonably have been expected to take steps to ensure that the company complied with the requirements of this section.
4: Nothing in this section affects the validity of a policy of insurance or of an allotment of shares or an admission to membership of a company.
5: In this section, the term company section 2(1) 1955 No 63 s 413
34: Part 13 of Companies Act 1955 repealed
Amendment(s) incorporated in the Act(s)
35: Transitional provisions
1: The repeal of Part 13 of the Companies Act 1955 by section 34
a: any notice given to an insurance company under section 422 of that Act, or any investigation of an insurance company commenced under that section, before the commencement of this Act, and sections 421 and 423 of that Act shall apply as if references in those sections to the winding up of an insurance company were references to putting the company into liquidation:
b: the winding up of an insurance company under that Part commenced before the commencement of this Act.
2: In the liquidation of an insurance company under Part 6 of the Companies Act 1955, nothing in any of sections 266 to 273 of that Act shall apply in relation to any transaction entered into by the company, or any matter that arose, before 1 July 1994, but sections 309, 310, 311, 311A, 311B, and 311C of that Act, as in force before that date, shall continue to apply in respect of that transaction or matter as if this Act had not been passed.
3: In the liquidation of an insurance company under Part 16 sections 292 to 299