Document ID: chunk:federal_register_of_legislation:C2004A04501:schedule:3:p78
Version: federal_register_of_legislation:C2004A04501
Segment Type: schedule
Provision Reference: sch 3 (pt 78/110)
Character Range: 350093–352830

out of the amount received and in priority to all payments in respect of the debts mentioned in section 556, pay to each person to whom an amount is payable by the company under a relevant contract of insurance an amount calculated in accordance with the formula:

where:

'Particular amount owed' means the amount payable to the person under the relevant contract of insurance;

'Total amount owed' means the total of all the amounts payable by the company under relevant contracts of insurance;

'Reinsurance payment' means the amount received under the contract of reinsurance, less any expenses of or incidental to getting in that amount.

"(4) The Court may, on application by a person to whom an amount is payable under a relevant contract of insurance, make an order to the effect that subsections (2) and (3) do not apply to the amount received under the contract of reinsurance and that that amount must, instead, be applied by the liquidator in the manner specified in the order, being a manner that the Court considers just and equitable in the circumstances.

"(5) The matters that the Court may take into account in considering whether to make an order under subsection (4) include, but are not limited to:

    (a)     whether it is possible to identify particular relevant contracts of insurance as being the contracts in respect of which the contract of reinsurance was entered into; and

    (b)     whether it is possible to identify persons who can be said to have paid extra in order to have particular relevant contracts of insurance protected by reinsurance; and

    (c)     whether particular relevant contracts of insurance include statements to the effect that the contracts are to be protected by reinsurance; and

    (d)     whether a person to whom an amount is payable under a relevant contract of insurance would be severely prejudiced if subsections (2) and (3) applied to the amount received under the contract of reinsurance.

"(6) If receipt of a payment under this section only partially discharges a liability of the company to a person, nothing in this section affects the rights of the person in respect of the balance of the liability.

  "(7) This section has effect despite any agreement to the contrary.

  "(8) in this section:

'relevant contract of insurance' means a contract of insurance entered into by the company, as insurer, before the relevant date.".

102. After section 563 of the Corporations Law the following sections and heading are inserted:

Member's debts to be postponed until other debts and claims satisfied

"563A. Payment of a debt owed by a company to a person in the person's capacity as a member of the company, whether by way of dividends, profits or otherwise, is