Overview

The Life Insurance Supervisory Levy Imposition Determination 2012 was enacted to address the financial obligations of life insurance entities under the Life Insurance Supervisory Levy Imposition Act 1998. This determination was introduced by the Minister for Finance, pursuant to the authority granted under subsection 7(3) of the Act, and applies to the 2012-13 financial year. It revokes the previous year's determination, the Life Insurance Supervisory Levy Imposition Determination 2011, upon its commencement on 1 July 2012. The primary objective of this determination is to set the parameters for the calculation of the supervisory levy, which is imposed to support the regulatory functions of the Australian Prudential Regulation Authority (APRA). The restricted component of the levy is calculated at 0.00689 per cent of the entity's assets, with a minimum of $490 and a maximum of $1,103,000, while the unrestricted component is calculated at 0.001856 per cent of the entity's assets. Friendly societies, which are registered under the Life Insurance Act 1995, are also subject to this levy 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 2012 applies to life insurance entities, including those registered under the Life Insurance Act 1995 as friendly societies, which fall under the definition of 'life insurance company' in the Financial Institutions Supervisory Levies Collection Act 1998. This determination is made under the Life Insurance Supervisory Levy Imposition Act 1998 and sets out the details of the levy imposed on these entities for the 2012-13 financial year. The determination specifies the restricted and unrestricted components of the levy, calculated as a percentage of the entity's assets, and sets minimum and maximum thresholds for the restricted component. The Minister is authorised to determine the restricted and unrestricted levy percentages and thresholds for each financial year under section 7(3) of the Act. This determination has a Commonwealth jurisdictional reach and extends its application through subordinate instruments. There are no stated exclusions or exemptions in this particular determination, but obligations or liabilities incurred in previous financial years remain valid under section 50 of the Acts Interpretation Act 1901.

Key Provisions

The main operative sections of the Life Insurance Supervisory Levy Imposition Determination 2012 pertain to the levy imposed on life insurance entities. According to section 7(3) of the Life Insurance Supervisory Levy Imposition Act 1998, the Minister is authorised to determine various aspects of the levy. Specifically, this determination sets out the maximum and minimum restricted levy amounts for the 2012-13 financial year, at 0.00689 per cent of assets held by the entity, with a minimum of $490 and a maximum of $1,103,000 (subsection 7(3)(a) and (b)). It also specifies the restricted and unrestricted levy percentages for the same period at 0.00689 per cent and 0.001856 per cent of assets, respectively (subsection 7(3)(c) and (ca)). Furthermore, this determination outlines the methodology for calculating a life insurance company's asset value (subsection 7(3)(d)). The obligations imposed by this determination on life insurance entities include the requirement to pay the specified restricted and unrestricted levies based on their asset values. Life insurance entities must ensure that their asset values are accurately determined and reported, as these values are used to calculate the applicable levies. The determination also mandates that these entities adhere to the specified minimum and maximum limits for the restricted levy. Additionally, entities must comply with the prescribed method of calculating their asset values, as outlined in the determination. Failure to comply with the requirements set out in this determination may result in legal consequences. Although the determination does not explicitly list offences or penalties, breaches of the Life Insurance Supervisory Levy Imposition Act 1998 may lead to enforcement actions by the relevant authorities. The potential penalties for non-compliance could include fines or other sanctions, depending on the specific breach and the discretion of the authorities responsible for enforcing the Act. The maximum penalties for breaches of the Act are not specified within this determination but are detailed in the primary legislation.