Document ID: chunk:federal_register_of_legislation:F2019L00648:body:0:p4
Version: federal_register_of_legislation:F2019L00648
Segment Type: other
Provision Reference: 
Character Range: 8478–11367

or real property of a locally incorporated insurer is excluded from being an asset in Australia if it is located outside Australia.

Loans and amounts due (including debentures)

13.         Subject to subsection 116A(1) and subsection 116A(5) of the Act, an asset of a locally incorporated insurer is excluded from being an asset in Australia if:

Debt assets, not being debt assets held through a depository

       (a)          the asset is a debt owed by another person (including, but not limited to, a debenture or a bond), not being an asset that is held through a depository, and:

           (i)            the debt is payable outside Australia;

           (ii)         the debt is not recoverable in an Australian court;

           (iii)       the debtor does not reside in Australia;

           (iv)        the debtor is a foreign government or foreign government authority; or

           (v)          the debt is not readily transferable in Australia;

Interests held on Australian depositories

       (b)          the asset is an interest held on an Australian depository, being an interest that derives from, or relates to, an underlying asset that is in the nature of a debt owed by another person, and:

           (i)            the underlying asset would be excluded from being an asset in Australia under paragraph (a) if held directly by the locally incorporated insurer (rather than through a depository); and

           (ii)         APRA has not determined, in writing, to waive the exclusion of the asset or a class of assets of which the asset is a member; or

Interests held on foreign depositories

       (c)          the asset is an interest held on a foreign depository, being an interest that derives from or relates to an asset in the nature of a debt owed by another person.

14.         Paragraph 13 does not exclude an interest of a locally incorporated insurer in a kangaroo bond from being an asset in Australia if all the following conditions are complied with:

       (a)          the underlying bond is legally owned by Austraclear Ltd or a nominee for Austraclear Ltd and is lodged in the Austraclear system;

       (b)          the register recording legal ownership of the underlying bond is kept in Australia;

       (c)          the bond is created by a deed poll that is sealed, or deemed by its governing law to be sealed, and the deed poll is governed by Australian law and kept in Australia; and

       (d)          the debt under the bond is expressed to be payable in Australia, except where payment in Australia is prohibited by law (provided that if, at any time, such payment in Australia is prohibited by law, the debt under the bond shall be excluded from being an asset in Australia for so long as that payment is prohibited).

   Note: If a locally incorporated insurer holds an interest in a kangaroo