Overview

The Life Insurance Supervisory Levy Imposition Determination 2017 was introduced to address the need for the imposition of a levy on life insurance entities to fund the Australian Prudential Regulation Authority's (APRA) supervisory activities. This determination was enacted by the Commonwealth Parliament under the Life Insurance Supervisory Levy Imposition Act 1998, which aims to ensure that life insurance entities contribute towards the costs of their regulation. The policy objective behind this levy is to provide a stable and predictable source of funding for APRA’s operations, ensuring that it can effectively supervise and regulate the life insurance sector. The determination sets out the specific percentages and caps for the restricted and unrestricted components of the levy for the 2017-18 financial year, providing clarity and consistency in the regulatory framework. The determination also ensures that friendly societies, which are registered under the Life Insurance Act 1995, are subject to the levy, thereby maintaining a uniform regulatory approach across all life insurance entities.

Scope and Application

The Life Insurance Supervisory Levy Imposition Determination 2017 applies to life insurance entities, including friendly societies, that are registered under the Life Insurance Act 1995 and thus fall under the definition of ‘life insurance company’ as per the Financial Institutions Supervisory Levies Collection Act 1998. This legislative instrument pertains specifically to the 2017-18 financial year, commencing on 1 July 2017, and replaces the Life Insurance Supervisory Levy Imposition Determination 2016. The determination outlines the methodology for calculating the restricted and unrestricted components of the levy, with the restricted component calculated at 0.00832 per cent of assets held by the entity, subject to a minimum of $10,000 and a maximum of $1,000,000, and the unrestricted component at 0.004826 per cent of the entity's assets. The Act extends its application nationally as a Commonwealth legislation, and no exclusions or exemptions are explicitly stated in the provided text. The determination is a legislative instrument under the Legislation Act 2003 and is consistent with the requirement for commencement prior to registration, ensuring no adverse impact on the rights of any person.

Key Provisions

The Life Insurance Supervisory Levy Imposition Determination 2017, made under the Life Insurance Supervisory Levy Imposition Act 1998 (the Act), specifies the levy for life insurance entities for the 2017-18 financial year. Section 7(3) of the Act mandates the Treasurer to determine various aspects of the levy through this legislative instrument. For 2017-18, the determination sets the restricted levy at 0.00832% of assets held by the entity, with a minimum of $10,000 and a maximum of $1,000,000, and the unrestricted levy at 0.004826% of assets held by the entity. It also outlines how the asset value of a life insurance company is to be calculated. This determination applies to all entities defined as 'life insurance companies', including friendly societies registered under the Life Insurance Act 1995. The determination imposes specific obligations on life insurance entities to calculate their levy based on the percentages and asset values outlined. They must ensure that their assets are accurately assessed and the correct amount of levy is calculated and paid for the 2017-18 financial year. Friendly societies, while not explicitly mentioned, are also subject to these provisions as they fall under the definition of 'life insurance company'. Entities must adhere to the methodology provided in the determination for calculating their levy base asset and ensure compliance with the stipulated percentages. Failure to comply with the requirements of this determination may lead to financial penalties and other consequences as prescribed under the Act. While the determination does not explicitly detail penalties for non-compliance, breaches of similar provisions under related legislation typically result in fines or other enforcement actions. The exact penalties would be determined based on the specific provisions of the Life Insurance Supervisory Levy Imposition Act 1998 and any associated regulations or guidelines. The determination also ensures that it does not disadvantage any person or impose any liability for actions taken before its registration, aligning with relevant legislative provisions.