Overview

The General Insurance Supervisory Levy Imposition Determination 2005, which commenced on 1 July 2005, is a legislative instrument under the General Insurance Supervisory Levy Imposition Act 1998. This Act was enacted to address the need for a funding mechanism to support the Australian Prudential Regulation Authority’s (APRA) regulatory activities in the general insurance sector. The 2005 Determination, issued by the Treasurer, specifies the levy rates for the 2005-06 financial year, revoking the previous year’s levy rates. The policy objective is to ensure a stable and predictable funding source for APRA’s supervisory activities, thereby maintaining the integrity and stability of the insurance sector. The restricted levy is set at 0.01860 per cent of an entity's assets, with a minimum of $4,700 and a maximum of $700,000, while the unrestricted levy is set at 0.006514 per cent of assets. This determination is subject to disallowance by Parliament under section 46A of the Acts Interpretation Act 1901.

Scope and Application

The General Insurance Supervisory Levy Imposition Determination 2005 applies to companies registered under the Insurance Act 1973, specifically focusing on the calculation of the supervisory levy for the 2005-06 financial year. The determination is made under the authority of the General Insurance Supervisory Levy Imposition Act 1998 and comes into effect on 1 July 2005, superseding the 2004 determination. The levy is comprised of a restricted component, which is set at a rate of 0.01860 per cent of the entity's assets, subject to a minimum of $4,700 and a maximum of $700,000, and an unrestricted component at 0.006514 per cent of the entity's assets. The Treasurer, through this determination, also specifies the method for calculating a general insurance company's asset value, ensuring compliance with the statutory requirements. This instrument is a disallowable one, meaning it can be annulled by either house of the Parliament.

Key Provisions

The General Insurance Supervisory Levy Imposition Determination 2005 (subsection 8(3)) outlines the specific details for the levy imposed on companies registered under the Insurance Act 1973, as mandated by the General Insurance Supervisory Levy Imposition Act 1998. For the 2005-06 financial year, the determination sets the restricted levy component at 0.01860 percent of the entity's assets, with a minimum levy of $4,700 and a maximum of $700,000 (subsection 8(3)(a)-(c)). Additionally, the unrestricted levy is calculated at 0.006514 percent of the entity's assets (subsection 8(3)(d)). These calculations ensure that both restricted and unrestricted components are fairly assessed based on the entity's asset value. The entities governed by this determination are required to comply with the specified calculations to determine their levy obligations for the 2005-06 financial year. They must accurately report their asset values to ensure that the restricted and unrestricted components of the levy are correctly applied. Failure to comply with these calculations or to accurately report asset values can result in incorrect levy assessments, potentially leading to financial discrepancies and penalties. Failure to comply with the provisions of this determination can result in civil and criminal consequences. The determination specifies that the restricted component of the levy must be within the stipulated minimum and maximum limits, and any entity that does not adhere to these limits may face penalties. Furthermore, any incorrect reporting or failure to report asset values accurately can lead to further financial or legal repercussions, as stipulated by the General Insurance Supervisory Levy Imposition Act 1998 and the Acts Interpretation Act 1901. Penalties may include financial fines or other legal actions as deemed necessary to enforce compliance.