Overview

The Life Insurance Supervisory Levy Imposition Determination 2019 was enacted to provide details regarding the levy imposed on life insurance entities under the Life Insurance Supervisory Levy Imposition Act 1998. This legislation was introduced to address the need for a structured and regulated financial contribution from life insurance entities to support the ongoing supervisory activities of the Australian Prudential Regulation Authority (APRA). The determination, issued by the Treasurer under the authority of the Act, specifies the parameters for calculating the restricted and unrestricted components of the supervisory levy for the 2019-20 financial year, ensuring clarity and predictability in financial obligations for the entities involved. This legislative instrument was developed through consultation with the finance sector, and it complies with human rights as it does not engage any of the applicable rights or freedoms, as affirmed in the statement of compatibility with human rights under the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Life Insurance Supervisory Levy Imposition Determination 2019 applies to life insurance entities, including registered friendly societies, as defined under the Life Insurance Act 1995 and the Financial Institutions Supervisory Levies Collection Act 1998. These entities are obligated to pay a levy as mandated by the Life Insurance Supervisory Levy Imposition Act 1998. The levy for the 2019-20 financial year comprises a restricted component calculated at 0.01348 per cent of the entity’s assets, with a minimum of $15,000 and a maximum of $1,110,000, and an unrestricted component calculated at 0.003148 per cent of the entity’s assets. This determination, which supersedes the 2018 version, specifies the methodology for calculating the levy base and is effective from 1 July 2019. The Act’s application extends nationally, as it is a Commonwealth legislative instrument, and it includes provisions for the calculation of the levy, ensuring compliance with the specified thresholds and percentages. Any obligations or liabilities incurred under the repealed 2018 determination remain valid, consistent with the Acts Interpretation Act 1901.

Key Provisions

The Life Insurance Supervisory Levy Imposition Determination 2019 provides specific details regarding the levy imposed on life insurance entities under the Life Insurance Supervisory Levy Imposition Act 1998. It outlines the methodology for calculating the restricted and unrestricted components of the 2019-20 levy (sections 1-2). The restricted component of the levy for the 2019-20 financial year is set at 0.01348% of the assets held by the entity, subject to a minimum of $15,000 and a maximum of $1,110,000. The unrestricted component is calculated at 0.003148% of the entity’s assets. This determination also incorporates aspects from the Financial Sector (Collection of Data) (Reporting Standard) Determination No. 53 of 2013. Friendly societies, although not explicitly mentioned in the text, are included within the scope of the levy as they are registered under the Life Insurance Act 1995 and thus fall under the definition of ‘life insurance company’ in the Financial Institutions Supervisory Levies Collection Act 1998. The obligations imposed by this determination on life insurance entities include the calculation and payment of the specified levy components based on their assets. Entities must adhere to the defined percentages and thresholds to determine their contribution for the financial year. The determination also necessitates the reporting of data in line with the Financial Sector (Collection of Data) (Reporting Standard) Determination No. 53 of 2013, ensuring that entities provide accurate and timely information regarding their financial status and levy contributions. Failure to comply with the requirements of this determination could result in financial penalties or legal actions. Although the specific penalties are not detailed in the provided text, breaches of financial obligations typically result in penalties that may include fines and interest on unpaid amounts. The severity of these penalties can vary, but they are designed to enforce compliance and ensure that entities contribute appropriately to the supervisory levy as mandated by the Act. It is also important to note that any obligation or liability incurred in previous financial years remains valid, as per section 7 of the Acts Interpretation Act 1901, which underscores the importance of consistent compliance across financial periods.