Overview

The Life Insurance Supervisory Levy Imposition Determination 2005 was enacted to provide a framework for the collection of supervisory levies from friendly societies and life insurance entities in Australia, addressing the need for adequate funding to ensure proper oversight and regulation of these entities. This determination, which commenced on 1 July 2005, was issued under the authority of the Life Insurance Supervisory Levy Imposition Act 1998 by the Australian Government. The policy objective of this Act is to establish a consistent and predictable revenue stream to support the regulatory activities of the Australian Prudential Regulation Authority (APRA). The 2005 determination specifically outlines the methodology for calculating both the restricted and unrestricted components of the supervisory levy for the 2005-06 financial year, ensuring that the regulatory body has the necessary funds to perform its duties effectively. The restricted levy is set at 0.00670 per cent of the entity’s assets, with a minimum of $470 and a maximum of $700,000, while the unrestricted levy is calculated at 0.001027 per cent of the entity’s assets.

Scope and Application

The Life Insurance Supervisory Levy Imposition Determination 2005 applies to friendly societies and life insurance entities, providing a framework for the calculation of a supervisory levy for the 2005-06 financial year. This determination, which revokes its predecessor the Life Insurance Supervisory Levy Imposition Determination 2004, is instrumental in enforcing the provisions outlined in the Life Insurance Supervisory Levy Imposition Act 1998. It sets out the restricted and unrestricted levy percentages for the specified financial year and defines the method for calculating a life insurance company’s asset value. The restricted levy is calculated at 0.00670 per cent of the assets held by the entity, with a minimum of $470 and a maximum of $700,000, while the unrestricted levy is calculated at 0.001027 per cent of the assets. This determination also stipulates that any obligation or liability incurred in previous financial years remains valid, consistent with the Acts Interpretation Act 1901. Furthermore, it is noted that this determination is a disallowable instrument under section 46A of the Acts Interpretation Act 1901, thereby subjecting it to parliamentary scrutiny.

Key Provisions

The Life Insurance Supervisory Levy Imposition Determination 2005 outlines specific provisions related to a levy imposed on friendly societies and life insurance entities, pursuant to the Life Insurance Supervisory Levy Imposition Act 1998. Commencing on 1 July 2005, this determination is applicable to the 2005-06 financial year and revokes the Life Insurance Supervisory Levy Imposition Determination 2004 upon its commencement. As per section 50 of the Acts Interpretation Act 1901, any obligations or liabilities incurred in previous financial years remain valid. Under this determination, the Treasurer is empowered to determine several key aspects of the levy. Specifically, the determination sets the maximum and minimum restricted levy amounts for the financial year, the restricted and unrestricted levy percentages, and the method for calculating a life insurance company’s asset value. For the 2005-06 financial year, the restricted component of the levy is calculated at 0.00670 per cent of the assets held by the entity, with a minimum of $470 and a maximum of $700,000. The unrestricted component of the levy is calculated at 0.001027 per cent of the entity’s assets. This detailed calculation ensures a structured approach to levy imposition, providing clarity for entities subject to this levy. Entities governed by this determination have specific obligations and requirements. They must accurately calculate the restricted and unrestricted components of the levy based on their asset values and the percentages specified in the determination. This involves a thorough assessment of their financial assets to ensure compliance with the minimum and maximum levy amounts set forth. Additionally, entities must maintain records and documentation to substantiate their asset values and levy calculations, which may be required for review or audit purposes. Breach of the provisions outlined in the Life Insurance Supervisory Levy Imposition Determination 2005 can result in significant consequences. While the determination itself does not specify penalties, breaches of the underlying Act, the Life Insurance Supervisory Levy Imposition Act 1998, can lead to civil or criminal penalties. The Act provides for the imposition of fines and other penalties for non-compliance. The severity of these penalties may vary depending on the nature and extent of the breach, but they are designed to ensure adherence to the regulatory framework governing the levy.