General Insurance Supervisory Levy Imposition Determination 2015

Administered by Department of the Treasury

Legislation au F2015L01108 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

General Insurance Supervisory Levy Imposition Determination 2015

This determination relates to a levy imposed by the General Insurance Supervisory Levy Imposition Act 1998 (the Act) on companies registered under the Insurance Act 1973.

This determination commences on 1 July 2015 and relates to the 2015‑16 financial year.  The General Insurance Supervisory Levy Imposition Determination 2014 is repealed upon commencement of this determination.  Consistent with section 7 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.

The determination will commence before it is registered.  Commencement prior to registration, however, does not disadvantageously affect the rights of any person as at the date of registration or impose any liability on any person in respect of anything done or omitted to be done before the date of registration.  Commencement prior to registration is therefore consistent with subsection 12(2) of the Legislative Instruments Act 2003.

Subsection 8(1AA) of the Act specifies that the levy payable by a general insurance company for a financial year is to comprise of a general component and a special component.

2015‑16 General Component

For 2015‑16 financial year, the general component will fund the operations of the Australian Prudential Regulation Authority (APRA) and certain activities performed by the Australian Securities and Investments Commission.

In relation to the general component, subsection 8(3) of the Act requires the Treasurer, by legislative instrument, to determine:

(a)   the maximum restricted levy amount for each financial year;

(b)   the minimum restricted levy amount for each financial year;

(c)   the restricted levy percentage for each financial year;

(ca) the unrestricted levy percentage for each financial year; and

(d)   how a general insurance company’s levy base is to be worked out;

This determination provides that the restricted component of the 2015‑16 general levy will be calculated at 0.01323 per cent of assets held by the entity, subject to a minimum of $7,500 and a maximum of $1,064,000.  The unrestricted component of the 2015-16 general levy will be calculated at 0.010038 per cent of assets held by the entity.

2015‑16 Special Component Levy

For 2015‑16 financial year, the special component will fund the costs of the National Claims and Policy Database.  This component was levied for the first time in 2006‑07 following amendments to the General Insurance Supervisory Levy Imposition Act 1998.

In relation to the special component, subsection 8(3) of the Act allows the Minister to determine:

(e)   the special maximum levy amount for each financial year;

(f)    the special minimum levy amount for each financial year;

(g)   the special levy percentage for each financial year; and

(h)   how a general insurance company’s eligible premium income (EPI) is to be worked out.

This determination provides that for a public/product liability insurer the special levy amount will be calculated at 0.0060 per cent of the insurer’s EPI, subject to a minimum of $5,000 and a maximum of $50,000.  For a professional liability insurer the special levy amount will be calculated at 0.0048 per cent of the insurer’s EPI, subject to a minimum of $5,000 and a maximum of $32,000.

This determination provides that the special levy payable by an insurer that writes both public/product liability and professional indemnity insurance is determined by adding the sum of:

•                 0.0060 per cent of the insurer’s EPI, arising from public/product liability insurance, subject to a minimum of $5,000 and a maximum of $50,000; and

•                 0.0048 per cent of the insurer’s EPI, arising from professional indemnity insurance, subject to a minimum of $5,000 and a maximum of $32,000.

This determination provides that for either a public/product or professional indemnity runoff insurer the special levy amount will be $2,500.  For insurers that provide both public/product and professional indemnity runoff insurance, the special levy amount will be $5,000.

The finance sector has been consulted on the 2015‑16 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 20 May 2015.  The paper discusses potential impacts of the levies on each industry sector and institution regulated by APRA.  Eight submissions were received during the consultation process, and no submission commented on the methodology under which the general insurance levy was calculated. 

The Office of Best Practice Regulation has previously advised that a Regulatory Impact Statement is not required as supervisory levies are considered machinery‑of‑government in nature. 

This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out in Attachment 1.


Attachment 1

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

General Insurance Supervisory Levy Imposition Determination 2015

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

This determination relates to a levy imposed by the General Insurance Supervisory Levy Imposition Act 1998 on companies registered under the Insurance Act 1973.

Subsection 8(1AA) specifies that the levy payable by a general insurance company for a financial year is to comprise of a general component and a special component.

In relation to the general component, subsection 8(3) allows the Minister to determine:

(i)     the maximum restricted levy amount for each financial year;

(j)     the minimum restricted levy amount for each financial year;

(k)   the restricted levy percentage for each financial year;

(ca) the unrestricted levy percentage for each financial year; and

(l)     how a general insurance company’s asset value is to be calculated;

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The General Insurance Supervisory Levy Imposition Determination 2015, enacted under the General Insurance Supervisory Levy Imposition Act 1998, addresses the need for funding the operations of the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission, as well as the costs associated with the National Claims and Policy Database. This determination, which applies to the 2015-16 financial year, was made by the Minister for Finance in accordance with the Act and is a legislative instrument under the Legislative Instruments Act 2003. It sets out the levy rates for both the general and special components, calculated based on the assets held and the eligible premium income of general insurance companies, respectively. The determination also notes that a statement of compatibility with human rights has been prepared under the Human Rights (Parliamentary Scrutiny) Act 2011, confirming that the legislation does not engage any applicable rights or freedoms.

Scope and Application

The General Insurance Supervisory Levy Imposition Determination 2015 applies to companies registered under the Insurance Act 1973, specifically those in the general insurance sector, and pertains to the 2015-16 financial year. It outlines the calculation methodology for the supervisory levy imposed by the General Insurance Supervisory Levy Imposition Act 1998, comprising a general component and a special component. The general component funds the operations of the Australian Prudential Regulation Authority (APRA) and certain activities of the Australian Securities and Investments Commission, while the special component finances the costs of the National Claims and Policy Database. The restricted levy for the general component is calculated at 0.01323 per cent of an entity’s assets, subject to a minimum of $7,500 and a maximum of $1,064,000, and the unrestricted levy is calculated at 0.010038 per cent of assets. The special levy varies for different types of insurers, with specific percentages applied to eligible premium incomes, subject to minimum and maximum thresholds. The determination also includes specific levy amounts for runoff insurers. The determination supersedes the previous year's levy determination and ensures obligations from prior years remain valid. This legislative instrument is compatible with human rights as it does not raise any human rights issues.

Key Provisions

The General Insurance Supervisory Levy Imposition Determination 2015 (the Determination) provides specific details for the 2015–16 financial year on the supervisory levy imposed by the General Insurance Supervisory Levy Imposition Act 1998 on companies registered under the Insurance Act 1973. The Determination specifies the method of calculating the levy, which comprises a general component and a special component. Under section 8(1AA) of the Act, the general component funds the operations of the Australian Prudential Regulation Authority (APRA) and certain activities of the Australian Securities and Investments Commission (ASIC). The special component funds the National Claims and Policy Database. The Determination imposes obligations on general insurance companies to calculate and pay their supervisory levy based on the provisions outlined. For the general component, the restricted levy is calculated at 0.01323 per cent of the company's assets, with a minimum of $7,500 and a maximum of $1,064,000. The unrestricted levy is calculated at 0.010038 per cent of the company's assets. For the special component, the levy for public/product liability insurers is 0.0060 per cent of their eligible premium income (EPI), with a minimum of $5,000 and a maximum of $50,000. For professional liability insurers, it is 0.0048 per cent of their EPI, with a minimum of $5,000 and a maximum of $32,000. Special levy amounts are set at $2,500 for runoff insurers and $5,000 for insurers providing both public/product and professional indemnity runoff insurance. The Determination does not explicitly state penalties for non-compliance with the supervisory levy requirements. However, under the General Insurance Supervisory Levy Imposition Act 1998, failure to pay the required levy can result in significant legal consequences. Typically, such breaches might be subject to civil or administrative penalties as prescribed under the relevant insurance and financial regulatory frameworks. Companies that do not comply with the levy obligations could face enforcement actions, including fines or other penalties as determined by the relevant regulatory bodies like APRA or ASIC. The specific penalties and consequences would be in line with the broader regulatory and financial obligations imposed by the Act.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.