Overview

The Life Insurance Supervisory Levy Imposition Determination 2008 was enacted to impose a levy on life insurance entities for the 2008-09 financial year under the Life Insurance Supervisory Levy Imposition Act 1998. This Act was introduced to address the need for a mechanism to fund the supervision of life insurance companies and entities. The determination was enacted by the Minister under the authority provided by the Life Insurance Supervisory Levy Imposition Act 1998, and it specifies the rates for both restricted and unrestricted components of the levy. The restricted component is calculated at 0.00701 per cent of assets held by the entity, subject to a minimum of $470 and a maximum of $700,000, while the unrestricted component is calculated at 0.001286 per cent of assets held by the entity. The policy objective of the levy is to ensure sufficient funding for the regulation and supervision of life insurance entities, including friendly societies, as they fall under the definition of ‘life insurance company’ in the Financial Institutions Supervisory Levies Collection Act 1998.

Scope and Application

The Life Insurance Supervisory Levy Imposition Determination 2008 applies to entities involved in the life insurance sector, specifically life insurance companies and friendly societies that are registered under the Life Insurance Act 1995. This determination sets out the levy rates for the 2008-09 financial year, establishing the restricted and unrestricted components of the levy. The restricted levy is calculated at a rate of 0.00701 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 0.001286 per cent of the entity's assets. The Act provides the Minister with the authority to determine these rates annually, ensuring that the financial obligations of the entities are clear and manageable. The determination revokes the previous year’s levy imposition and is a legislative instrument under the Legislative Instruments Act 2003, extending the reach of the Life Insurance Supervisory Levy Imposition Act 1998.

Key Provisions

The Life Insurance Supervisory Levy Imposition Determination 2008 (subsection 7(3) of the Life Insurance Supervisory Levy Imposition Act 1998) sets forth the levy rates for the 2008-09 financial year. Specifically, the restricted levy is calculated at 0.00701 per cent of the assets held by the entity, with a minimum of $470 and a maximum of $700,000. The unrestricted levy is calculated at 0.001286 per cent of the entity's assets. These percentages and the asset calculation methodology are key components that life insurance entities must adhere to for the levy calculation. Life insurance entities governed by this determination must ensure they accurately calculate their supervisory levy based on the specified percentages and asset values. This includes correctly determining the asset value to be used for the levy calculation, as outlined in the determination. The entities are required to report their assets and any associated levies to the relevant authorities in accordance with the stipulated timeframes and formats. Failure to comply with the levy requirements set out in this determination can result in penalties. Although specific penalties are not detailed in the explanatory statement, it is implied that breaches of the Act or the determination could lead to financial penalties or other legal consequences as prescribed by the legislation. Given that this is a legislative instrument under the Legislative Instruments Act 2003, non-compliance might also attract administrative actions or further legal repercussions. The levy percentages and asset calculations must be strictly followed to avoid any potential enforcement actions.