New South Wales Consolidated Acts

HOME BUILDING ACT 1989 - SECT 103BG

103BG Rejection of premiums by Authority

(1) The Authority may reject an insurance premium filed with it under this Division if it is of the opinion that--

(a) the premium is, having regard to actuarial advice and to other relevant financial information available to the Authority, excessive or inadequate, or

(b) the premium does not conform to the relevant provisions of the Insurance Guidelines.

(2) Written notice of the Authority's rejection of a premium, and the reasons for the rejection, must be given to the licensed insurer.

(3) If the Authority rejects a premium of a licensed insurer, the insurer may request the Authority to reconsider the rejection.

(4) Pending its reconsideration, the Authority may request an actuary to determine a provisional premium.

(5) A provisional premium so determined has effect, pending the Authority's reconsideration, as if it were an insurance premium that may lawfully be charged by the insurer concerned.

(6) If the Authority has not withdrawn its rejection of a premium within 4 weeks after a request to reconsider the rejection, the matter is to be arbitrated under this section. The following provisions have effect--

(a) The Commercial Arbitration Act 2010 applies to an arbitration under this section, subject to this Act and the regulations. The Authority and the insurer concerned may by agreement appoint a person to act as arbitrator in connection with the matter. Failing agreement within 7 days, paragraphs (b) and (c) apply.

(b) The Independent Pricing and Regulatory Tribunal (established by the Independent Pricing and Regulatory Tribunal Act 1992 ) may act as arbitrator to hear and determine the matter.

(c) Alternatively, that Tribunal may appoint a person to act as arbitrator in connection with the matter. The person is to be appointed from a panel constituted by the Minister and consisting of persons who have appropriate knowledge and understanding of economics, general insurance and the interests of consumers.

(d) The regulations may make provision for or with respect to the arbitration of matters under this section.

(7) The arbitrator may determine the premium that may be charged by the licensed insurer.

(8) The Insurance Guidelines may--

(a) specify the factors to be taken into account in determining for the purposes of this section the reasonable cost of claims and reasonable claim settlement expenses, and

(b) specify the factors to be taken into account in determining for the purposes of this section whether a premium is excessive, and

(c) exclude specified costs and expenses from being taken into account as costs and expenses of the insurer for the purposes of this section, and

(d) limit the extent to which specified costs and expenses can be taken into account as costs and expenses of the insurer for the purposes of this section.