EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Private Health Insurance (Prudential Supervision) Act 2015
Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1)
Authority for the Rules
Subsection 174(1) of the Private Health Insurance (Prudential Supervision) Act 2015 (the Act) provides that APRA may, by legislative instrument, make APRA Rules (the Rules) prescribing matters required or permitted by the Act, or necessary, or convenient to carry out, or give effect to the Act.
Purpose of the Rules
The purpose of the Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1) (the Amendment Rules) is to require APRA, in accordance with section 167(1)(h) of the Act, to publish information in relation to the membership of each private health insurer.
The then Private Health Insurance Administration Council (PHIAC) published data in relation to the membership of each private health insurer in the Operations of Private Health Insurers Annual Report prior to its merger with APRA on 1 July 2015. The Amendment Rules enable APRA to continue to publish this data.
The Amendment Rules effectively maintain the status quo for the private health industry, there are no regulatory impacts or costs incurred as a result of the Amendment Rules.
The Amendment Rules take effect on the day after they are registered on the Federal Register of Legislative Instruments. Details of the Amendment Rules are set out in the Attachment.
The Amendment Rules is a legislative instrument for the purposes of the Legislative Instrument Act 2003.
Consultation
Industry was not consulted in relation to the Amendment Rules. However, APRA previously undertook consultations on the proposed prudential and reporting framework for APRA’s supervision of private health insurers. The consultation was undertaken from March to May 2015. APRA received input from private health insurers, industry bodies, and other interested parties.
Submissions received during the consultation noted the importance of the continued availability of the current information (for industry, consumers and others). APRA stated that it intends to continue to publish and disseminate data in same way as PHIAC. Industry unanimously supported APRA’s position that the existing data publication and dissemination should continue.
On 29 January 2016, the Office of Best Practice Regulation (OBPR) advised that a Regulation Impact Statement was not required. The OBPR assessed that the proposal does not have a regulatory impact as it relates to enabling APRA to publish information about membership of each private health insurer in a way that the PHIAC had done previously (OBPR Reference 20373).
ATTACHMENT
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1)
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act).
Overview of the Legislative Instrument
The Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1) prescribes the membership information that APRA must publish in respect of each private health insurer.
Human rights implications
APRA has assessed this Legislative Instrument and is of the view that it does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the HRPS Act. Accordingly, in APRA’s assessment, the instrument is compatible with human rights.
Conclusion
The Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1) are compatible with human rights because it does not raise any human rights issues.
DETAILS OF THE PRIVATE HEALTH INSURANCE (PRUDENTIAL SUPERVISION) AMENDMENT RULES 2016 (NO. 1)
- Name of Rules
Rule 1 provides that the rule is the Amendment Rules.
2. Commencement
Rule 2 provides that the Amendment Rules commence on the day after they are registered on the Federal Register of Legislative Instruments.
3. Authority
Rule 3 provides that the Amendment Rules are made under the Private Health Insurance (Prudential Supervision) Act 2015.
4. Schedule(s)
Rule 4 provides that the Private Health Insurance (Prudential Supervision) Rules 2015 are amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
SCHEDULE 1 AMENDMENTS
Item 1- Rule 3, Definitions
This inserts new definitions after the definition of capital adequacy standard:
general treatment
is treatment (including the provision of goods and services) that:
(a) is intended to manage or prevent a disease, injury or condition; and
(b) is not hospital treatment.
hospital treatment
is treatment (including the provision of goods and services) that:
(a) is intended to manage disease, injury or condition; and
(b) is provided to a person:
(i) by a person who is authorised by a hospital to provide the treatment; or
(ii) under the management or controls of such a person; and
(c) either:
(i) is provided at a hospital; or
(ii) is provided, or arranged, with the direct involvement of a hospital.
Item 2- After Part 5 insert Part 6
This item inserts a new Part 6 which provides that APRA must publish the following information in relation to the membership of each private health insurer:
(a) The total number of policies of insurance underwritten during the financial year relating to:
(i) hospital treatment (hospital treatment policies); and
(ii) general treatment (general treatment policies); and
(b) The number of people insured under the hospital treatment policies and the number of people insured under the general treatment policies;
(c) The average number of hospital treatment policies and general treatment policies in force during the financial year; and
(d) The average number of people covered by the hospital treatment policies and general treatment policies in force during the financial year.