Waivers from NZX Listing Rules 3.1.1(b), 3.6, and 3.14.1

NZX Regulation Decision Insurance Australia Group Limited (IAG) Application for waivers from NZX Listing Rule 3.1.1(b), 3.6, and 3.14.1 1 July 2019 Background 1. The information on which these decisions are based is set out in Appendix One to this decision. These waivers will not apply if that information is not, or ceases to be, full and accurate in all material respects. 2. The Rule to which this decision relates is set out in Appendix Two. 3. Capitalised terms that are not defined in these decisions have the meanings given to them in the Rules. Waiver from Listing Rule 3.1.1(b) Decision 4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information provided by Insurance Australia Group Limited (IAG) is complete and accurate in all material respects, NZX Regulation (NZXR) grants IAG a waiver from NZX Listing Rule (Rule) 3.1.1(b), to the extent that this Rule prohibits disclosure of Material Information to ASX before that Material Information is disclosed to NZX. 5. The waiver in paragraph 4 above is provided on the conditions that: a. IAG must release Material Information relating to the Notes through MAP at the same time as, or promptly and without delay after, release to ASX and at least 10 minutes before public release in any other jurisdiction; and b. IAG continue to be subject to the ASX Listing Rules in relation to Continuous Disclosure. Reasons 6. In coming to the decision to provide the waiver set out in paragraph 4 above, NZXR has considered that: a. both ASX and NZX require that IAG disclose Material Information to it first, and as it will not be possible for IAG to comply with both obligations, IAG's primary responsibility is to ASX, with which it has equity listed; b. there will be no material disadvantage to NZX Noteholders as the Material Information will be released to NZX either at the same time as it is released to ASX, or shortly thereafter; and c. IAG is still subject to continuous disclosure obligations under Rule 3.1, which requires IAG to disclose any Material Information. Waiver from Listing Rule 3.6 Decision 7. Subject to the conditions set out in paragraph 8 below, and on the basis that the information provided by IAG is complete and accurate in all material respects, NZXR grants IAG a waiver from Rule 3.6, to the extent that this Rule requires IAG to prepare and deliver annual reports complying with the NZX Listing Rules. 8. The waiver in paragraph 7 above is provided on the conditions that: a. IAG prepares an annual report in accordance with the ASX listing rules (Annual Report); b. IAG provides the Annual Report to NZX for release at the same time as, or promptly and without delay after, it is provided to ASX; c. The Annual Report includes a statement that IAG has been granted a waiver from Rule 3.6 and any other waivers granted to IAG; and d. IAG remains incorporated in Australia and subject to ASX periodic reporting requirements. Reasons 9. In coming to the decision to provide the waiver set out in paragraph 7 above, NZXR has considered that: a. NZXR is satisfied with the level of disclosure in the Annual Report as required by the ASX listing rules, and the conditions of the waiver ensure that the latest Annual Report will be easily accessible to investors; b. IAG is still subject to continuous disclosure obligations under Rule 3.1, which requires IAG to disclose any Material Information; and c. there is precedent for this decision. Waiver from Listing Rule 3.14.1 in the event of conversion due to non-viability trigger event Decision 10. Subject to the conditions set out in paragraph 11 below, and on the basis that the information provided by IAG is complete and accurate in all material respects, NZXR grants IAG a waiver from Rule 3.14.1, to the extent that in the event of conversion due to a non-viability trigger event IAG will not be required to give notice for the purposes of Rule 3.14.1 in relation to the Conversion at least five Business Days before the Conversion occurs. 11. The waiver in paragraph 10 above is provided on the conditions that the notice required by Rule 3.14.1 must be given by IAG as soon as practicable, and in any event, before the NZX Debt Market opens for trading on the Business Day after Conversion occurs. Reasons 12. In coming to the decision to provide the waiver set out in paragraph 10 above, NZXR has considered that: a. IAG has submitted, and NZXR has no reason not to accept, that if Conversion is required on account of a non-viability trigger event, it will be unable to provide five Business Days' notice as required by Rule 3.14.1, given that APRA standards require Conversion to occur immediately; b. IAG has already disclosed to Noteholders that upon the occurrence of a non-viability trigger event, the market will not be given advance notice; and c. if a non-viability trigger occurs, the terms of the Deed Poll require IAG to give notice to Noteholders as soon as practicable, that Conversion has occurred. Appendix One 1. Insurance Australia Group Limited (IAG) is currently a debt-only Dual Listed Issuer under the existing NZX Debt Market Listing Rules (Existing Rules) but will become a primary listed Issuer when the new NZX Debt Market Listing Rules (New Rules) come into effect on 30 June 2019. 2. IAG is incorporated in Australia and it is subject to the Corporations Act 2001 (Corporations Act). 3. IAG is a licensed non-operating holding company in Australia for the purposes of the Insurance Act 1973. As a licensed non-operating holding company, IAG is subject to prudential supervision from the Australian Prudential Regulation Authority (APRA). 4. IAG current has NZ$350 million of unsecured subordinated convertible notes listed on NZX (IAGFBs). The IAGFBs are recognised as regulatory capital by APRA under its capital prudential standards that apply to insurance companies. One of the conditions for the IAGFBs being recognised as regulatory capital is that the terms of the IAGFBs provide that the IAGFBs immediately Convert into ordinary shares in IAG on the occurrence of a Non-Viability Trigger Event. 5. A Non-Viability Trigger Event will occur if ARPA determines that IAG would be non-viable without a Conversion of the IAGFBs into ordinary shares of IAG or a public sector injection of capital or equivalent capital support. 6. IAG also has further debt and equity products listed on ASX. The ASX listing rules relevantly impose the following obligations on IAG: a. IAG must prepare an Annual Report; and b. IAG must disclose Material Information to ASX before releasing that Material Information to the public or any other party (including NZX). Appendix Two Rule 3.1.1 Disclosure of Material Information 3.1.1 Once an Issuer becomes Aware of any Material Information relating to it, the Issuer must: (a) promptly and without delay release that Material Information through MAP, and (b) not disclose any Material Information to the public, any other stock exchange (except as provided for in Rule 3.26.2(d)) or any other party without first releasing that Material Information through MAP. Rule 3.6 Preparation and delivery of Annual Reports 3.6.1 Each Issuer of Quoted Equity Securities or Quoted Debt Securities must within three months after the end of each financial year: (a) prepare an annual report, which must contain all information required by all applicable laws and these Rules, and (b) deliver, subject to Rule 3.6.2, the annual report to: (i) NZX by release through MAP (including by URL link to the annual report on an Issuer's website) before or at the same time as it is made available to Quoted Financial Product holders, and (ii) each Quoted Financial Product holder in accordance with Rule 3.6.3. 3.6.2 An Issuer that comes within the State-Owned Enterprises Act 1986 is not required to issue an annual report to its Quoted Financial Product holders or NZX until that report has been provided to the Minister responsible for the State Enterprise in accordance with the requirements of the State-Owned Enterprise Act 1986 and laid by the Minister responsible for that State Enterprise before the House of Representatives in accordance with the State-Owned Enterprise Act 1986 or published in the Gazette under section 17(2A) of the State-Owned Enterprise Act 1986, whichever is the earlier. 3.6.3 Annual reports must be made available to Quoted Financial Product holders by: (a) sending to Quoted Financial Product holders: (i) a hard copy of the annual report, or (ii) a notice under 209(3) of the Companies Act 1993, or (b) complying with regulations 61B to 61F of the FMC Regulations. For the purposes of this Rule 3.6.3, sections 209 to 209C of the Companies Act 1993 and regulations 61B to 61F of the FMC Regulations will be deemed to be modified so that: (c) "shareholders" are members of the relevant Class of Quoted Financial Product holders of that Issuer, (d) "company" includes all Issuers, whatever their structure, (e) "board of a company" includes the Manager of a Managed Investment Scheme, (f) "annual report" means an annual report as required by Rule 3.6.1 (g) references to "working days after it is prepared" and "working days after the annual report for the period is prepared" are, for an Issuer that is a State Enterprise complying with regulations 61B to 61F of the FMC Regulations, interpreted as "working days after the annual report has been provided to the Minister responsible for the State Enterprise in accordance with the requirements of the State-Owned Enterprise Act 1986 and laid by that Minister responsible for that State Enterprise before the House of Representatives in accordance with the State-Owned Enterprise Act 1986 or published in the Gazette under section 17(2A) of the State-Owned Enterprises Act 1986, whichever is the earlier". Rule 3.14 Distributions, conversion and calls 3.14.1 An Issuer must release through MAP, at least 5 Business Das before the Record Date, the details of a proposal to: (a) pay or distribute a benefit on Quoted Financial Products, (b) proceed with a Conversion of Quoted Financial Products, or a Conversion of any Financial Products into Quoted Financial Products, or (c) make a call on a Quoted Financial Product, in the form prescribed by NZX from time to time. End CA:00336909 For:IAG Type:WAV/RULE Time:2019-07-01 09:54:00