EXPLANATORY STATEMENT
Issued by the Authority of the Private Health Insurance Administration Council
Private Health Insurance Act 2007
Private Health Insurance (Insurer Obligations) Amendment Rules 2011 (No. 1)
Authority for the Amendment Rules
The Private Health Insurance (Insurer Obligations) Amendment Rules 2011 (No. 1) (the Amendment Rules) are established under section 163-1 of the Private Health Insurance Act 2007 (the Act), and are made by the Private Health Insurance Administration Council (the Council) under item 2 of the table in section 333-25 of the Act.
The Amendment Rules amend the Private Health Insurance (Insurer Obligations) Rules 2009 (the Rules).
The Amendment Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Purpose of the Amendment Rules
The purpose of these Amendment Rules is to update the Appointed Actuaries Standard directing Appointed Actuaries to prepare Financial Condition Reports (FCRs) in accordance with Professional Standard 600: Financial Condition Reports for Private Health Insurers (PS600), issued by the Institute of Actuaries of Australia (the Institute).
PS600 replaces Guidance Note 670: Financial Condition Reports for Health Insurers (GN670) which is referenced in Rule 10 of the existing Appointed Actuaries Standard, established by Schedule 2 of the Private Health Insurance (Insurer Obligations) Rules 2009 which commenced on 31 March 2007. The Amendment Rules update the existing Appointed Actuaries Standard, changing the requirement to prepare a FCR in accordance with GN670 to PS600. An explanation of Rule 10 is set out at Attachment 1.
Summary of impact of the Amendment Rules
The Amendment Rules respond to a review of professional requirements by the Institute, which is the professional association for actuaries in Australia. The Institute develops industry-imposed Professional Standards from time to time.
It is in this context that the Institute has issued PS600 to its Fellows which details requirements for carrying out a particular actuarial duty, that is, the preparation of FCRs for private health insurers.
Consultation
Advice received from the Office of Best Practice Regulation (OBPR) has confirmed that the change to the Rules is considered minor and machinery in nature and has been exempt from the Regulation Impact Statement requirements – RIS ID No: 12603.
PHIAC has not consulted stakeholders other than the OBPR during development of the Amendment Rules. This is because the amendment reflects a change that industry stakeholders have been instrumental in crafting and kept informed of by the Institute.
Documents incorporated by reference
The amendment incorporates an external document endorsed by the Institute.
PS600 is available from the Institute of Actuaries of Australia online at
www.actuaries.asn.au, or by contacting the Institute at the following address:
The Institute of Actuaries of Australia
Level 7 Challis House
4 Martin Place
Sydney NSW 2000
Tel: + 61 (2) 9233 3466
Fax: +61 (2) 9233 3446
Email: actuaries@actuaries.asn.au
The document can also be obtained by contacting the Council on (02) 6215 7900.
ATTACHMENT 1
DETAILS OF THE PRIVATE HEALTH INSURANCE (INSURER OBLIGATIONS) AMENDMENT RULES 2011 (No. 1)
- Name of Rules
Rule 1 provides that the Rules are to be known as the Private Health Insurance (Insurer Obligations) Amendment Rules 2011 (No. 1).
2. Commencement
Rule 2 provides that the Amendment Rules commence on the day after they are registered.
3. Amendment of the Private Health Insurance (Insurer Obligations) Rules 2009
Rule 3 provides that Schedule 1 amends the Private Health Insurance (Insurer Obligations) Rules 2009.
4. Schedule 1 Amendment
Schedule 1 substitutes the existing requirement in Schedule 2, paragraph 10 (b) of the Private Health Insurance (Insurer Obligations) Rules 2009 with the new direction to prepare a Financial Condition Report in accordance with the Professional Standard 600: Financial Condition Reports for Private Health Insurers, made by the Institute of Actuaries of Australia in June 2011.