General Insurance Supervisory Levy Regulations (Amendment)

Overview

The General Insurance Supervisory Levy Regulations (Amendment) 1994 No. 326, issued under the authority of the Treasurer, amends the General Insurance Supervisory Levy Regulations to adjust the annual rate of the levy imposed under the General Insurance Supervisory Levy Act 1989. This Act was enacted to address the need for an annual levy on authorised general insurers and Lloyd’s to cover the ongoing costs of supervision by the Insurance and Superannuation Commissioner, as stipulated under the Insurance Act 1973. The amendments aim to increase the annual rate of the levy from $13,000 to $16,300, effective from 1 October 1994, to account for the rising operational costs due to the administration of the Insurance Contracts Act 1984 and internal changes in cost allocation within the Commission. This adjustment is crucial to ensure that the industry adequately supports the increased supervisory costs.

Scope and Application

The General Insurance Supervisory Levy Regulations (Amendment) 1994 No. 326 applies to authorised general insurers and Lloyd's in Australia. It amends the General Insurance Supervisory Levy Act 1989 by increasing the annual rate of levy from $13,000 to $16,300, effective from 1 October 1994. This amendment reflects the increased operational costs that will arise in the administration of the Insurance Contracts Act 1984, for which the Insurance and Superannuation Commissioner is now responsible following the Insurance Laws Amendment Act (No. 2) 1994. The increased levy rate also accounts for internal changes in the method by which Commission-wide costs are allocated to individual operating units of the Commission, thereby necessitating a recovery of these increased operating costs under the Act. The levy is imposed to recover the ongoing costs of supervision by the Insurance and Superannuation Commissioner, and the prescribed annual rate of the levy shall not exceed a statutory upper limit.

Key Provisions

The General Insurance Supervisory Levy Regulations (Amendment) 1994 (No. 326) amends the existing General Insurance Supervisory Levy Regulations under the General Insurance Supervisory Levy Act 1989. Specifically, Section 11 of the Act allows the Governor-General to make regulations for the purposes of subsection 9(1), which details the method of calculating the daily component of the levy and sets out the annual rate, which was previously set at $13,000. The amendment raises this annual rate to $16,300, effective from 1 October 1994, to account for increased operational costs and responsibilities arising from legislative changes. The Act imposes a levy on authorised general insurers and Lloyd's to cover the ongoing costs of supervision by the Insurance and Superannuation Commissioner, as mandated by the Insurance Act 1973. These entities are required to contribute annually to this levy, with the new rate reflecting the increased costs associated with administering the Insurance Contracts Act 1984 and internal cost allocations within the Commission. The statutory upper limit for the levy, initially set at $17,000, ensures that the levy does not exceed a certain threshold, providing a cap on the financial burden placed on the industry. The amending regulations necessitate that authorised general insurers and Lloyd's adhere to the new levy rate of $16,300. They must ensure compliance with the revised financial obligations from 1 October 1994, which involves updating their financial records and reporting mechanisms to reflect the increased levy. This change is a direct consequence of the Insurance Laws Amendment Act (No. 2) 1994, which expanded the responsibilities of the Insurance and Superannuation Commissioner, thereby increasing operational costs that need to be recovered. Failure to comply with the provisions of the General Insurance Supervisory Levy Regulations (Amendment) 1994 may result in legal consequences. The Act includes provisions for penalties, which could be civil or criminal, depending on the nature and severity of the breach. The maximum penalties for non-compliance are not specified in the text, but they generally involve fines or other sanctions that the courts can impose. Ensuring adherence to the new levy rate is crucial for avoiding these potential penalties and maintaining compliance with the legislative framework.