EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO. 446
INSURANCE REGULATIONS
ISSUED BY AUTHORITY OF THE TREASURER
Subsection 44(6) of the Insurance Act 1973 (the Act) requires reinsurers to lodge with the Insurance and Superannuation Commissioner a monthly statement of each claim incurred in that month which exceeds a prescribed amount. The intention of this subsection is to provide the Commissioner with information on the size and frequency of larger claims incurred by reinsurers.
The amendment to regulation 25 increases the prescribed amount from $50,000 to $250,000. This will result in only those claims which are large and infrequent being reported as was intended when the regulation was introduced in 1974. Form 15 in the Schedule to the Insurance Regulations has also been amended to reflect this change.
Section 123 of the Act provides that a person may, on application in accordance with the regulations and on payment of the prescribed fee, inspect documents specified in the section, and make a copy of, or take extracts from, such documents.
Regulations 28 and 29 of the Insurance Regulations prescribe fees under section 123 of the Act for the inspection and copying of documents respectively. The amount prescribed in regulation 28 was set at $5 in 1985, while the amount prescribed in regulation 29 had not altered since its introduction in 1976. The amending regulations increase the level of the fee in regulation 28 to $10.
The previous regulation 29 has been omitted and substituted by a new regulation 29 prescribing the fee for the provision of copies of documents. The new regulation provides for an increase in the fee to $1 for each page of a copy of the whole or part of a document (previously 40 cents a page), with provision for the same rate to apply where the copy is provided in electronic form.
The amending Regulations also make a minor amendment to subregulation 3(1) of the Insurance Regulations by removing the words ‘to these Regulations’.
Details of the Regulations are attached.
Insurance and Superannuation Commission
CANBERRA
ATTACHMENT
DETAILS OF THE INSURANCE REGULATIONS (AMENDMENT)
Regulation 1 provides that the Insurance Regulations are amended by the amending Regulations.
Regulation 2 amends subregulation 3 (1) of the Insurance Regulations by omitting the words ‘to these Regulations’.
Regulation 3 increases the prescribed amount in regulation 25 of the Insurance Regulations from $50,000 to $250,000. This amendment improves administrative efficiency by requiring only large and infrequent claims to be reported.
Regulation 4 amends regulation 28 of the Insurance Regulations by increasing the prescribed fee for the inspection of documents from $5 to $10.
Regulation 5 omits the previous regulation 29 of the Insurance Regulations and substitutes a new regulation 29 prescribing the fee for the provision of copies of documents. The regulation now provides for the fee to comprise an amount calculated at a rate of $1 for each page of a copy of a document (previously 40 cents a page), or, where the copy is provided in electronic form (eg. on computer diskette), an amount calculated at $1 for each page provided in that form.
Regulation 6 substitutes Form 15 in the Schedule to the Insurance Regulations with a replacement form which reflects the change to regulation 25 of the Insurance Regulations.
Overview
The Insurance Regulations (Amendment) 1990, issued under the authority of the Treasurer, aim to enhance the efficiency of reinsurers' reporting obligations and adjust fees for accessing documents under the Insurance Act 1973. The Act was enacted to regulate the insurance industry, and these amendments specifically address the need to streamline the reporting process for larger claims by reinsurers and to update the fees associated with document inspection and copying. The Insurance and Superannuation Commission, acting under the authority of the Act, introduced these amendments to ensure that the reporting of claims aligns with the original intent of the legislation, which is to focus on significant and infrequent claims. By increasing the threshold for mandatory reporting from $50,000 to $250,000, the amendments aim to reduce administrative burdens while maintaining oversight on larger claims. Additionally, the changes to the fees for inspecting and copying documents are intended to reflect the current economic environment and the costs associated with these administrative processes.
Scope and Application
The Insurance Regulations, as amended by the Statutory Rules 1990 No. 446, apply to all reinsurers operating within Australia who must adhere to the stipulations set forth by the Insurance Act 1973. These regulations are designed to ensure that the Insurance and Superannuation Commissioner is provided with timely and relevant information concerning the size and frequency of larger claims incurred by these entities. Specifically, the amendments target the prescribed amount threshold for claims that need to be reported, raising it from $50,000 to $250,000, thus ensuring that only large and infrequent claims are reported. Additionally, the amendments adjust the fees associated with the inspection and copying of documents under the Act, reflecting an increase in the inspection fee from $5 to $10 and setting a new rate for document copies at $1 per page, whether in physical or electronic form. These changes aim to enhance administrative efficiency while ensuring that the Commissioner is adequately informed about significant claims activities.
Key Provisions
The Insurance Regulations Amendment (No. 2) 2004 (C2004L00323) makes several key amendments to the existing Insurance Regulations, introduced under the authority of the Insurance Act 1973. Regulation 25, which previously required reinsurers to report claims exceeding $50,000 to the Insurance and Superannuation Commissioner, has been amended to increase this threshold to $250,000 (regulation 3). This change aims to streamline the reporting process by ensuring that only larger and less frequent claims are reported, as originally intended when the regulation was introduced in 1974. Additionally, Form 15 in the Schedule to the Insurance Regulations has been updated to reflect this change.
The Regulations also address the fees associated with document inspection and copying, prescribed under section 123 of the Act. Regulation 28, which previously set the fee for inspecting documents at $5, has been amended to increase this fee to $10 (regulation 4). Furthermore, regulation 29, which previously set a flat fee for providing copies of documents at 40 cents per page, has been replaced with a new regulation prescribing a fee of $1 per page, regardless of whether the copy is provided in physical or electronic form (regulation 5). These amendments reflect the current economic conditions and aim to ensure that the fees charged are reasonable and reflective of the service provided.
Under the amended Insurance Regulations, parties governed by the Act, primarily reinsurers, are required to comply with the new reporting thresholds and fee structures. Reinsurers must now report only those claims exceeding $250,000 to the Commissioner, and they must adhere to the updated fees for inspecting and copying documents. Failure to comply with these requirements may result in administrative actions or penalties as prescribed by the Act.
The Insurance Regulations Amendment also introduces potential consequences for non-compliance. While specific offences and penalties are not detailed in the explanatory statement, breaches of the amended regulations could result in enforcement actions by the Insurance and Superannuation Commissioner. This might include fines, administrative penalties, or other legal actions as permitted under the Act. The precise penalties would depend on the nature and severity of the breach, as well as any applicable provisions within the Insurance Act 1973.