Document ID: chunk:federal_register_of_legislation:F2021N00107:clause:1_22:p1
Version: federal_register_of_legislation:F2021N00107
Segment Type: clause
Provision Reference: sch 1 cl 22 (pt 1/2)
Character Range: 24169–26853

22  Guarantee
 (1) The Licensee must, at all times have in place a Guarantee for the due discharge of its liability to pay compensation and other amounts under the SRC Act in accordance with the scope of this licence.
 (2) Subject to the exceptions in conditions 22(3) and 22(4), and subject to clause 25, the Licensee must obtain a new Guarantee under condition 22(1) each Financial Year.
 (3) If the Commission determines that the Licensee is a low-risk licensee for a Financial Year, the Licensee is not required to obtain a new Guarantee under condition 22(1) that Financial Year unless:
 (a) the required Guarantee amount for the Licensee for that Financial Year (as calculated under 22(7) and 22(8)) increases by $300,000 or more from the required Guarantee amount for the Licensee for the Financial Year in which it obtained its existing Guarantee under condition 22(1) (as calculated under 22(7) and 22(8)); or
 (b) 5 years have elapsed since the Licensee last obtained a new Guarantee under condition 22(1).
Note: The $300,000 value referred to in condition 22(3)(a) is subject to indexation (based on CPI) annually.
 (4) The Licensee is not required to obtain a new Guarantee under condition 22(1) for a Financial Year if the required Guarantee amount for the Licensee for that Financial Year (as calculated under conditions 22(7) and 22(8)) is less than or equal to the Guarantee amount of the Licensee's existing Guarantee under condition 22(1).
 (5) The Guarantee obtained under condition 22(1) must be:
 (a) in the form and subject to the terms agreed in writing by the Commission; and
 (b) for an amount calculated by the actuary in accordance with condition 22 and specified in the Liability Report for that Financial Year; and
 (c) obtained from a corporation that is authorised by APRA to carry on:
              (i) banking business in Australia under the Banking Act 1959 (Cth) and has an issuer credit rating of or equivalent to a Standard and Poor's AA- or better; or
              (ii) insurance business in Australia under the Insurance Act 1973 (Cth) and has an issuer credit rating of or equivalent to a Standard and Poor's AA- or better and a financial strength rating of or equivalent to a Standard and Poor's AA- or better.
 (6) The Licensee must provide the original of the Guarantee to the Commission within 170 days of the start of the first Financial Year to which the Guarantee relates.
 (7) The Guarantee must be for an amount calculated by the actuary as the greater of:
 (a) the 95th percentile of the Licensee's Outstanding Claim Liability under the SRC Act in accordance with the scope of this licence at the Balance Date and the addition of the