Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1)

Administered by Department of the Treasury

Legislation au F2016L00207 Rules Not in force Legislative Instrument

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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)

  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.

Overview

The Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1) were introduced to amend the Private Health Insurance (Prudential Supervision) Act 2015, with the purpose of enabling the Australian Prudential Regulation Authority (APRA) to publish information relating to the membership of each private health insurer. These rules maintain the continuity of the data publication practices previously carried out by the Private Health Insurance Administration Council (PHIAC) before its merger with APRA on 1 July 2015. The Amendment Rules were formulated under the authority granted by subsection 174(1) of the Act, and they do not impose any regulatory impacts or costs. The Amendment Rules came into effect on the day following their registration on the Federal Register of Legislative Instruments, and they were made without the need for a Regulation Impact Statement as they merely continue the existing practice of data publication. The rules stipulate that APRA must publish specific information regarding each private health insurer's membership, including the total number of policies, the number of people insured, and the average number of policies and people covered during the financial year. This legislative instrument is considered compatible with human rights as it does not engage any of the rights or freedoms recognised in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Private Health Insurance (Prudential Supervision) Act 2015, as amended by the Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1), applies to private health insurers operating in Australia, encompassing the entities that underwrite and manage health insurance policies. These rules mandate the Australian Prudential Regulation Authority (APRA) to publish specific membership information for each private health insurer. This information includes the total number of policies related to hospital and general treatments underwritten during the financial year, the number of individuals insured under these policies, and the average number of policies and people covered throughout the financial year. The geographic scope of this Act is national, applying across all states and territories of Australia. There are no specific exclusions or exemptions outlined in the rules, though they do not extend beyond the prescribed reporting requirements. The Amendment Rules themselves are legislative instruments under the Legislative Instruments Act 2003 and came into effect on the day after their registration on the Federal Register of Legislative Instruments. APRA's role in enforcing these rules is facilitated by the subordinate legislation, which maintains the pre-existing framework for information dissemination concerning private health insurers.

Key Provisions

The Private Health Insurance (Prudential Supervision) Amendment Rules 2016 (No. 1) primarily focus on the publication of membership information related to private health insurers. According to Rule 2, these rules commence on the day after they are registered on the Federal Register of Legislative Instruments. Rule 3 specifies that these rules are made under the Private Health Insurance (Prudential Supervision) Act 2015, which empowers the Australian Prudential Regulation Authority (APRA) to make such rules to implement the Act effectively. Rule 4 details the amendments to the Private Health Insurance (Prudential Supervision) Rules 2015, which are outlined in the Schedule to this instrument. The Amendment Rules impose specific obligations on APRA to publish detailed information about the membership of each private health insurer. Under the new Part 6, APRA is required to publish data including the total number of policies underwritten during the financial year for hospital treatment and general treatment, the number of people insured under these policies, and the average number of policies and people covered during the financial year. These requirements aim to maintain transparency and ensure that the public and industry stakeholders have access to crucial information about the operations of private health insurers. Failure to comply with these rules may not explicitly outline specific penalties within the provided text. However, non-compliance with regulations set forth by APRA can generally lead to enforcement actions, which may include fines, public reprimands, or other regulatory sanctions. While the exact penalties are not detailed here, breaches of APRA regulations can result in significant financial and reputational consequences for the affected entities. Additionally, the compatibility with human rights as outlined in the Statement of Compatibility with Human Rights confirms that the Amendment Rules do not engage any of the applicable rights or freedoms recognised in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011. This indicates that the rules are designed to operate within the bounds of human rights, ensuring that their implementation does not infringe upon the rights of individuals.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.