Overview

The Life Insurance Supervisory Levy Imposition Determination 2015, which comes into effect on 1 July 2015, was enacted by the Australian Parliament to address the need for a structured financial contribution from life insurance entities to cover the costs associated with their supervision. This determination is made under the Life Insurance Supervisory Levy Imposition Act 1998, which outlines the framework for imposing a levy on life insurance companies. The primary objective of this legislative instrument is to specify the levy rates and calculations for the 2015-16 financial year, ensuring that the financial burden on these entities is both equitable and sufficient to support the regulatory oversight required by the Australian Prudential Regulation Authority (APRA). The levy is divided into restricted and unrestricted components, with the restricted component set at a maximum of $1,320,000 and a minimum of $3,000, and the unrestricted component calculated at 0.002321 per cent of the entity’s assets. This approach ensures that friendly societies, which are registered under the Life Insurance Act 1995, are also included within the levy’s scope.

Scope and Application

The Life Insurance Supervisory Levy Imposition Determination 2015 applies to life insurance entities as defined under the Life Insurance Supervisory Levy Imposition Act 1998 and includes entities such as friendly societies registered under the Life Insurance Act 1995. The levy applies nationally across Australia and is imposed on the assets held by these entities to fund the Australian Prudential Regulation Authority's (APRA) supervisory activities. The levy comprises both a restricted and an unrestricted component, calculated as a percentage of the entity's assets. Specifically, the restricted levy for the 2015-16 financial year is set at 0.00519 per cent of the assets, with a minimum levy of $3,000 and a maximum of $1,320,000. The unrestricted component is set at 0.002321 per cent of the entity's assets. The determination does not explicitly state any exclusions or exemptions, but friendly societies are included by virtue of their registration under the Life Insurance Act 1995. The determination also clarifies that it is a legislative instrument under the Legislative Instruments Act 2003 and does not disadvantage any person despite its commencement before registration. Additionally, it has been assessed as compatible with human rights under the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Life Insurance Supervisory Levy Imposition Determination 2015, as per section 7(3) of the Life Insurance Supervisory Levy Imposition Act 1998, outlines the levy parameters for life insurance entities for the 2015-16 financial year. The restricted levy component is determined to be 0.00519 per cent of the assets held by the entity, with a minimum threshold of $3,000 and a maximum of $1,320,000. The unrestricted levy is set at 0.002321 per cent of the entity's assets. These figures are crucial for entities to understand their financial obligations under this legislation. Friendly societies, being registered under the Life Insurance Act 1995, are also subject to these levies and are considered within the definition of 'life insurance company' under the Financial Institutions Supervisory Levies Collection Act 1998. This Act imposes clear financial obligations on life insurance entities, mandating that they calculate their levies based on the specified percentages of their asset values. The entities must ensure that they meet the minimum and maximum levy thresholds as stipulated. Additionally, they must adhere to the prescribed method of calculating their asset values to correctly determine their levy liabilities. Failure to comply with these requirements could result in inaccuracies in the reported levies and potential legal repercussions. The Act does not explicitly detail offences, penalties, or consequences for non-compliance within the provided text. However, the nature of legislative instruments typically implies that non-compliance could lead to legal actions or financial penalties as prescribed by relevant legislation or regulatory guidelines. The Act's compatibility with human rights, as affirmed in the attached statement, suggests that it is designed to operate within the bounds of recognised human rights and freedoms, ensuring that the imposition of the levy does not infringe on individual rights.