Document ID: chunk:federal_register_of_legislation:F2020L01668:body:0:p6
Version: federal_register_of_legislation:F2020L01668
Segment Type: other
Provision Reference: 
Character Range: 13858–16806

administrator or their staff in the course of providing debt agreement services, including negligence, misleading or deceptive conduct or breaches of professional, fiduciary or statutory duties.

Adequate and appropriate fidelity insurance

3.20 An administrator should seek professional advice as to what is adequate and appropriate fidelity insurance for their business. This policy may form part of the requisite PI insurance. If an administrator does not have any employees then they will be exempted from the requirement to hold fidelity insurance as it is not necessary or possible to obtain this type of insurance when no staff are employed. If however, an administrator's circumstances change and they commence to employ any staff at all, the exemption will cease and this insurance will become an immediate requirement of registration.

Assessment of ability to satisfactorily perform the duties of an administrator

3.21 The Inspector-General's decision will focus on determining whether a person has the required level of ability (including knowledge) to properly perform the duties of a debt agreement administrator. The following discussion deals with the level of knowledge and business systems required to be demonstrated by an applicant for registration as a debt agreement administrator, consistent with the type of duties expected of an administrator. The duties of an administrator have been generally categorised under the following headings.

(a) Duties to ensure certificate is correct and properly administer the agreement

3.22 These duties refer to the administrator's certificate which must accompany the debt agreement proposal under sub-section 185C(2D) of the Act. At the time the debt agreement proposal is lodged with the Official Receiver, an administrator will have to certify that:

       * they have consented to deal with the identified property in the way specified in the proposal

       * the debtor has been given the information prescribed by the Regulations, including about alternative means of dealing with financial difficulty

       * having regard to the circumstances in existence at the time when the debtor's statement of affairs was signed by the debtor, they have reasonable grounds to believe that the debtor is likely to be able to discharge the obligations created by the agreement as and when they fall due

       * they have reasonable grounds to believe that all information required to be set out in the debtor's statement of affairs and proposal explanatory statement, has been set out.

3.23 An administrator will also be required to certify that they have reasonable grounds to believe that a debtor is likely to discharge any obligations that arise under a proposed variation to the proposal as and when they fall due. Where sub-section 185M(1DB) of the Act applies to a variation, an administrator will also need to certify that there are reasonable grounds to believe