FEDERAL COURT OF AUSTRALIA

Munich Reinsurance Company of Australasia Limited [2004] FCA 1391

Life Insurance Act 1995 (Cth) s191(5)

The Application of Commonwealth Life Ltd & Anor [2003] FCA 501

Challenger Life Limited [2004] FCA 618. 

MUNICH REINSURANCE COMPANY OF AUSTRALASIA LIMITED

NSD1461 OF 2004

TAMBERLIN J

SYDNEY

22 OCTOBER 2004

THE COURT ORDERS THAT:

1. Orders be made in accordance with Orders 1, 2, and 3 of the Notice of Motion.
2. Costs reserved in relation to this application.
3. Liberty to apply on two days’ notice.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     This is an application listed before me on short notice for a dispensation pursuant to s 191(5) of the Life Insurance Act 1995 (Cth) (“the Act”) in relation to a scheme for the transfer of life insurance policies from Munich Reinsurance Company of Australasia Limited (“MRA”) to PrefShaw Life Limited (“PrefSahw”).  Both these companies are registered life insurance companies under the Act, and a copy of the draft scheme for transfer is appended to the application.  Section 191(5) makes provision for the Court to dispense with the requirement under s 191(2)(c) that an approved summary of a scheme be been given to every affected policy owner if it is satisfied that, because of the nature of the scheme or the circumstances attending its preparation, it is not necessary for that paragraph to be complied with. 

2                     I have been furnished with an affidavit from Mr Pilcher, the business manager of MRA, to which is attached a copy of an Actuarial Report on the Scheme for Transfer of the Direct Life Insurance Business of MRA to PrefShaw.  I have also been furnished with a draft report of Mr Turner, an independent actuary, in relation to the scheme for transfer.  This report indicates that there is not likely to be any adverse effect on the persons in respect of whom it is sought to have dispensation with respect to service.

3                     I have considered the submissions by the Australian Prudential Regulatory Authority (“APRA”), which does not raise any opposition to the proposed dispensation.

4                     I have had regard to the principles set out in the authorities to which I have been referred, namely the decision of Sackville J in The Application of Commonwealth Life Ltd & Anor [2003] FCA 501, and the subsequent decision by Gyles J in Challenger Life Limited [2004] FCA 618.  In these authorities the Court indicated that the dispensation is a matter of considerable importance and should not be regarded as a matter of course.  However, having regard to the evidence that has been placed before me, and having considered APRA’s submissions, I am prepared to make the orders sought in the application before me.

5                     As I said in the course of the hearing, the fact that APRA does not raise any objection does not, of course, indicate in any way that the application to APRA for approval of the scheme of transfer will be automatically approved. I note that in this case, APRA has yet to consider the draft letters and make a ruling with respect to them, and has yet to consider the terms of the broader scheme, and to grant an approval for the transfer.  So at this stage all I am concerned with is the dispensation with respect to an approved summary being provided to every affected policy owner under the proposed scheme.

6                     Accordingly, I make orders in accordance with Orders 1, 2 and 3 of the Notice of Motion.  I will reserve any question of costs in relation to this application and I reserve liberty to apply on two days’ notice.

Associate:

Dated:              2 November 2004