Document ID: chunk:federal_register_of_legislation:F2017L00435:body:0:p2
Version: federal_register_of_legislation:F2017L00435
Segment Type: other
Provision Reference: 
Character Range: 2882–5828

'final judgment' includes an order of an Australian court made to enforce:

         (a)                a judgment of a court of another country; or

         (b)               in Australia, an award of an arbitrator following an arbitration held in Australia or elsewhere;

'Life Business' has the same meaning as "long term business" in the Insurance Companies Act 1982 of the United Kingdom, as in force on 3 September 1996;

'Lloyd's Agent in Australia' means the person appointed by Lloyd's in accordance with section 95 of the Act;

"Lloyds Security Trust Fund Rules" means a legislative instrument, as in force from time to time, made under subsection 70(1) of the Act; and

'reinsurance to close' means an underwriting agreement or arrangement treated by the practices of Lloyd's as reinsurance to close.

Security trust funds
6.             At all times while this instrument is in force, Lloyd's must ensure that security trust fund arrangements, and ancillary or incidental arrangements, in accordance with this instrument are in existence.

7.             Lloyd's must maintain the security trust funds specified in Attachment A, except where APRA approves, in writing, the termination of any security trust fund to which this paragraph applies.  APRA may do so if it is satisfied that:

       (a)          all insurance liabilities secured by the security trust fund are secured by another security trust fund; or

       (b)          there are no longer any insurance liabilities to be secured by the security trust fund.

8.             The trust deed for a security trust fund must provide for payment in Australia of final judgments obtained in Australia for insurance liabilities secured by the fund.

9.             However, the trust deed does not have to provide for payment of exemplary or punitive damages or damages for which a contract of insurance does not expressly provide.

10.         A contract of insurance or reinsurance that is mentioned in Attachment A in relation to a security trust fund may be covered by another security trust fund if APRA thinks it is reasonable, having regard to the reinsurance to close or other underwriting arrangements of Lloyd's.

Approval of trust deeds
11.         The trust deed for a security trust fund, or an alteration of such a trust deed, must be approved, in writing, by APRA.

12.         In deciding whether to approve a trust deed, or an alteration of a trust deed, APRA must have regard to the following matters:

       (a)          the right of a holder of a contract of insurance covered by the fund to enforce payment of a final judgment;

       (b)          the operation, accounting and other practices and reinsurance arrangements of the insurance market conducted by Lloyd's;

       (c)          the provision made for:

            (i)                 management of the fund if the fund is placed under judicial trusteeship or is wound up