Please explain why the decision is administrative in character and how is it made under an enactment.

The statute is below and the made up case study is after the statute (also made up).

PART 2

Objective of this Part

3(1)The contents of this Part reflect the desire of government to establish supportive and innovative industry informed body to build resilience in our insurance sector.

3(2) The objects of this Part are as follows:.

1. To ensure that accurate data and professional conduct underpin Australia's approach to building climate resilience into its economy.
2. To ensure professional standards apply to, and improved co-ordination of, the insurance industry's approach to climate change.
3. To provide a feedback mechanism to underpin future government decision-making in relation to disaster preparedness, climate adaptation and environmental planning.

Establishment of the Insurance Industry Resilience Authority

4(1)There shall be established an entity known as the Insurance Industry Resilience Authority (hereinafter the Authority).

4(2)The Authority will have the right to award Recognised Adaptation Body status to member entities under section 12. It will offer risk rebalancing funding, access to government data on an exclusive basis.

Functions of the Authority

5.(a) to provide information and advice to the Minister and member entities about climate change, industry trends and opportunities to pursue risk management and mitigation in the insurance industry.

(b) to assess standards of professional conduct in the handling of government funding, and decision-making in relation to insurance impacts of climate change.

(c) Provide funding to support the adaptation of the insurance industry to the new realities of climate change

(b) to do any other act or thing authorised or required by or under this or any other Act.

Composition of the Authority

6. The Authority will consist of no less than 5 members appointed by the Minister.

Meetings

7. The Authority shall meet at times specified by the Executive Director.

8. A quorum for a Meeting shall be no less than 3 members.

9.Where a quorum is not present, the Executive Director, or the person acting as Chairperson in his absence, shall, after waiting no less than one hour to determine whether a quorum can be made up, shall adjourn the Meeting to a time to be specified.

10. All decisions at a Meeting shall be determined by a vote.

11.Any issue to be determined by a vote at a Meeting shall be determined by a majority of those present and voting.

Part 3: Membership, Assessment and Information Sharing Functions

12. Affiliated Entity Status

(1) The Authority may grant affiliated entity status to any existing energy producer or fossil fuel reliant primary industry employer with an annual turnover is greater than $50 million dollars or has a headcount in excess of 300 full time equivalent employees.

(2) In addition to the requirements of this Act, The Authority may also establish further terms and conditions regulating affiliation with it. This reflects its status as an independent funder and professional standards body.

13. The Authority may establish a Code of Best Practice

1. The Authority is authorised to establish a code of practice and a code review process to assist in the performance of its functions.

1. The costs of any code of best practice review process will be reimbursed to affiliated entities by the Authority out of its annual budget appropriation under section 18.

14. Code of Best Practice

1. Outside the stated requirements of this section and section 18, the content and application of any code of best practice is a matter for the professional judgment of the Authority.
2. The Authorityis to establish a code of best practice to be observed by members ofthe Authority and all senior executive officers of the affiliated entities.
3. The terms and administration of the Code will represent, in the view of the Authority, an appropriate, industry led assessment of the responsible management of climate impacts on the portfolio risk held by members:
4. The code of best practice must contain the following provisions:
5. A provision requiring adequate record keeping in relation to climate risk throughout the corporate structures of members.
6. a provision which ensures that due diligence is applied to the financial basis for any decision to withdraw and the alternatives.

(5) The above provisions are to be designed with due regard for the commercial character of the member bodies and the responsibilities they owe to their shareholders.

15. Breaches of the Best Practice Code

1. Where it finds that a breach has occurred, the Authority must:

1. Suspend or terminate all privileges which attach to membership, including any future access to government data or Authority funding

(ii) inform the Minister of the review process, the nature of any breach and any penalty or revocation of membership that resulted.

(3) Provide an Insurance Event Report to the Minister on June 30^th each year, to inform the possible exercise of his direction power under section 18.

16. Tendering risk rebalancing funding

1. The Authority may offer risk rebalancing funding to members in furtherance of its functions.

1. Funding will be regulated through the agreement of a contract between the affiliated entities and the Authority following an appraisal of the performance of the entity.

1. The tendering process between affiliated members will be conducted on a competitive, commercial basis, through the Authority's assessment of the standing of the entity concerned.

17. Status and Finances of the Authority

(1) The Authority is established as a Corporate Commonwealth Entity.

(2) It is to have a separate legal personality from the Commonwealth and can act in its own right exercising certain legal rights such as forming itself into a private corporation, entering into contracts and owning property.

(3) The operational costs of any code review process are to be reimbursed to the Authority by annual appropriation from the Federal Budget.

(4) The Commonwealth will provide $800 million dollars for the establishment of the Authority.

(5) As a separate and independent entity, Authority is free to implement an affiliation fee or other commercialisation of its activities.

18. Ministerial Direction Power

(1) Except as expressly provided by this Act, the Authority is not subject to direction by the Minister.

(2) The Minister may give written directions to Authority with respect to the performance of its functions or approach to the award of funding where satisfied the work of the Authority discloses a compelling reason to act related to the integrity of public expenditure. The terms of the direction must solely relate to financial risks affecting the work of the Authority.

(3) The Minister may have regard to the contents of any Insurance Event Report in creating directions as to the future regulation of members and terms and conditions of funding rounds.

(4) The Authority must comply with any direction under subsection (2).

(5) Subsection (2) is not intended to authorise a direction which requires the Authority to find a specific affiliated entity in breach of the Code.

CASE STUDY

The Climate Resilience Act 2022 (Cth) (see separate file) establishes a statutory corporation, the Insurance Industry Resilience Authority. The role of the Authority is to fund 'disaster preparedness' activities in the insurance sector. It was formed on the basis that part of Australia's climate change future is a potential rise in uninsurable properties. The Authority conducts a range of programmes: from education, to funded research projects, to government reporting. But its primary role in is in the disbursement of risk rebalancing funding to its membership.

The legislation provides it with the sole right to bestow the status of 'Recognised Adaptation Body' upon companies.

As provided for under the 2022 Act, the Authority has created an internal code for members in line with the requirements of the Act.

The Authority reserves the right to suspend, restrict or terminate funding with any member company which breaches this code of accreditation. The following is an extract of the key responsibilities contained in this code:

Entities must ensure that their insurance decision-making is based upon a long-term approach. Specifically, entities will notify the Authority of any decision to withdraw from a geographical area. Prior to a withdrawal, decision members must investigate possible mitigation measures in local communities.

Entities will ensure that decisions to withdraw are underpinned by adequately recorded justifications and corporate decision-making, including:

1. The financial data and risk analysis which underpinned the decision to withdraw.
2. The degree to which the insurance company's decision to withdraw from insuring particular geographical areas reflects climate data from government entities.
3. The efforts the company made to future proof its operations in the area or more broadly.

Please note the relevant legislation, the terms and conditions document we require you to sign upon affiliation, make clear that the determination of breaches is an internal matter for the Board.'

FutureReady Insurance have recently had their status as a 'Recognised Adaptation Body' suspended. This arose out of its sudden decision to withdraw from the insurance market in coastal areas in Northern NSW. In recent years, the volume and severity of cyclones and flooding have increased in this region.

The decision to withdraw attracted a storm of criticism from local leaders and politicians. FutureReady withdrew on the basis that properties 'given the volatile nature of our evolving climate, we can no longer insurance in the area. Its unpredictability cannot be modelled'. This was despite commitments it had early made when the flooding hit. The local Member of Parliament 'running out on the community, after taking government funding' and called for accountability. FutureReady rejected this, noting it had to make a hard headed financial call, 'at a time when our climate is rupturing'.

Following an exchange of correspondence, FutureReady have now been informed by the Authority that their membership and status under the Act had been revoked. This was stated to be due to their failure to 'take steps to investigate' alternatives to pulling out of insuring the region.

FutureReady feel the potential ripple effects for their business are significant. They are concerned that they will not be able to apply for funding anymore, their reputation has been affected amongst those with power and with the public. There is of course, the further concern the Minister may target their business interests and future role in the scheme using her direction power under section 18. They think the original decision is overreach by a statutory body that was set up to support and encourage, but which has turned aggressive in ways not contemplated by the Act. The Authority's standard line to FutureReady complaints has been to assert that 'membership is privilege'. They claim that the code functions as a standalone agreement between them and their members, and FutureReady submitted to their judgments when their relationship began back in 2022.

When engaging with the Authority, Future Ready supplied a full set of actuarial modelling for costs attaching to the region, were the flooding of the past year to replicate itself at higher frequencies going forward. They modelled various scenarios of property damage amongst their existing policyholders in the region, and showed the financial risk this represented. The Authority responded that this was insufficient, as FutureReady had not explored mitigation options with the local community or other stakeholders. It also added that through risk rebalancing funding, FutureReady could have the ability to defray some of the risk 'if it were willing to work with us diligently'. FutureReady feels this fails to recognised the severe financial exposure it faced, in the aftermath of flooding. It had to act to preserve itself.

FutureReady find it bizarre that a publicly funded, statutory established Authority, can operate in such a manner, without any accountability.