Private Health Insurance (Registration) Rules 2007 (No. 2)

Administered by Department of Health, Disability and Ageing

Legislation au F2007L04069 Rules Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

 

Issued by the Authority of the Minister for Health and Ageing

 

Private Health Insurance Act 2007

 

Private Health Insurance (Registration) Rules 2007 (No. 2)

 

Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Registration) Rules (the Rules) providing for matters required or permitted by Part 4-3 of the Act, or necessary or convenient in order to carry out or give effect to Part 4-3 of the Act.

 

Part 4-3 of the Act contains provisions relating to the power of the Private Health Insurance Administration Council (the Council) to register private health insurers.

 

The Private Health Insurance (Registration) Rules 2007 (No. 2) (the Rules) will commence 7 days after the Rules are made.

 

The Rules revoke and replace the Private Health Insurance (Registration) Rules 2007.  Rule 5 of the revoked Rules referred to applications for registration by a ‘company’.  Rule 5 of the replacement Rules now refers to ‘an applicant’ to make it clear that an applicant does not have to be a ‘company’. 

 

Rules describing particular groups for the purposes of paragraph 126-20(7)(e) in relation to existing restricted access insurers have also been inserted. By doing so, the Rules provide for existing restricted access insurers to continue to make available *complying health insurance products to current and future members within the restricted access group for that insurer as described in the Rules, following re-registration with the Private Health Insurance Administration Council (PHIAC) by July 2008. 

 

The Rules also enable private health insurers to make available *complying health insurance products to their former, current and future employees (including contractors).  Most restricted access group insurers will also be able to make available *complying health insurance products to the immediate family (ie, partners, dependent children, siblings, grandchildren and parents), and the former partners and adult children of persons described in the Rules as the Principal Insureds.  The Rules also allow for the partners and *dependent children of siblings and adult children of the Principal Insureds to be taken to be part of the same restricted access group.  This reflects the current industry practice.

 

The Department conducted consultation with the Health Insurance Restricted Membership Association of Australia (HIRMAA) and its members.  An Exposure Draft was released to HIRMAA on 20 September 2007 and a further draft was circulated on 2 October 2007.

The Act does not specify any conditions which need to be met before the power to make the Rules may be exercised.

 

Details of the Rules are set out in the Attachment. The Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003. 

 

The Rules commence 7 days after these Rules are made.

 

Authority: Section 333-20 of the Private Health Insurance Act 2007


ATTACHMENT

 

DETAILS OF THE PRIVATE HEALTH INSURANCE (REGISTRATION) RULES 2007 (No.2)

 

PART 1 - Preliminary

 

1. Name of Rules

 

Rule 1 provides that the title of the Rules is the Private Health Insurance (Registration) Rules 2007(No. 2).

 

2. Commencement

 

Rule 2 provides for the Rules to commence 7 days after they are made.

 

3.  Effect of Rules

 

Rule 3 provides for the Private Health Insurance (Registration) Rules 2007 to be revoked and to be replaced by these Rules.

 

4.              Definitions

 

Rule 4 provides that terms used in the Rules have the same meaning as in the Act.  In addition, Rule 4 also defines the terms ‘Principal Insureds’ and ‘Act’ which is used in the Rules.

 

PART 2 - General

 

5.              Deciding the application

 

Rule 5 provides that the Council is required to consider certain matters when deciding an application for registration as a private health insurer.

 

Subrule 5(1) provides that these matters are the likely ratio of management and administration expenses in respect of the funds to the likely amount of premiums of each fund; the likely number of persons who will contribute to the fund and the proposed premiums; and information on the application provided in writing by, or on behalf of, the Secretary of the Department. This may include information as to whether the body is likely to be able to comply with the obligations imposed by or under the Act on private health insurers.

 

6.              Description of groups for existing restricted access insurers

 

Rule 6 contains, for the purpose of paragraph 126-20(7)(e) of the Act, descriptions of groups for existing restricted access insurers.

 

Subsection 126-20(7) of the Act provides that a restricted access group is a group of people who all belong to a particular group, based on whether they belong to one of the groups described in paragraphs 126-20(7)(a) to (e).

 

Rule 6(a) provides that persons who are already insured with a *restricted access insurer at the date of commencement of these Rules are taken to belong to a *restricted access group (‘a Group’) to whom that insurer’s *complying health insurance products are, or will be, made available.

 

As indicated in note (i) to Rule 6, the purpose of Rule 6(a) is to ensure that *restricted access insurers are able to continue to provide cover to all existing insured persons.

 

Rule 6(b) provides that persons who are, or become, officers or employees (including contractors) of a *restricted access insurer that makes available its *complying health insurance products to a Group are also taken to belong to that Group, except where the person is or becomes an employee (including a contractor) of Reserve Bank Health Society Limited.

 

Rule 6(c) provides that the partners and *dependent children of Principal Insureds are also taken to belong to the same Group as those Principal Insureds.

 

Rule 6(d) provides that the former partners and adult children of Principal Insureds are also taken to belong to the same Group as those Principal Insureds, except where the Principal Insured is insured by Reserve Bank Health Society Limited.

 

Rule 6(e) provides that the siblings, grandchildren and parents of Principal Insureds are also taken to belong the same Group as those Principal Insureds, except where the Principal Insured is insured by the following *restricted access insurers: ACA Health Benefits Fund, South Australian Policy Employees Health Fund Inc, or Reserve Bank Health Society Limited.

 

Rule 6(f) provides that the partners and *dependent children of persons who are the adult children of Principal Insureds are also taken to belong to the same Group as those Principal Insureds, except where the Principal Insured is insured by Reserve Bank Health Society Limited.

 

Rule 6(g) provides that the partners and *dependent children of persons who are the siblings of Principal Insureds are also taken to belong to the same Group as those Principal Insureds, except where the Principal Insured is insured by the following *restricted access insurers: ACA health Benefits Fund, or South Australian Police Employees Health Fund Inc, or Reserve Bank Health Society Limited.

 

Rule 6(h) provides that on and from commencement of the Rules, the Group to whom a *restricted access insurer specified in Column 1 of the Schedule does or will make its *complying health insurance products available comprises:

 

  • the persons described in paragraphs 6(a), (b), (c), (d), (e), (f) and (g); and
  • the classes of people specified in Column 2 of the Schedule for that insurer.

 

As indicated in note (ii) to Rule 6 the purpose of paragraph (h) is to ensure that, on and from the commencement of these Rules, *restricted access insurers are able to continue to make *complying health insurance products available to limited classes of people who might not otherwise form part of a *restricted access group for the purposes of subsection 126-20(7) of the Act.

 

7.              Limits on insurance provided by restricted access insurers

 

For the avoidance of doubt, Rule 7(a) confirms that a *restricted access insurer’s constitution may only specify one *restricted access group to whom the insurer’s complying health insurance products are, or will be, available.

 

For the avoidance of doubt, Rule 7(b) confirms that a *restricted access insurer may not add new persons to this *restricted access group in addition to the persons included in that group by the operation of the Act and these Rules.

 

For the avoidance of doubt, Rule 7(c) confirms that paragraphs 6(c), 6(f) and 6(g) of these Rules modify the operation of subsection 126-20 (7) of the Act in relation to the partners and dependent children of people who belong to a *restricted access group.

 

Schedule – Restricted access groups for certain insurers

 

This is the Schedule referred to in Rule 6(h) of the Rules.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

The Private Health Insurance (Registration) Rules 2007 (No. 2) were enacted to provide clarity and regulatory certainty for the registration process of private health insurers, as outlined in Part 4-3 of the Private Health Insurance Act 2007. These rules were introduced by the Minister for Health and Ageing under the authority granted by Section 333-20 of the Act. They aim to streamline the registration process, ensuring that private health insurers can operate within a well-defined regulatory framework while accommodating specific industry practices and stakeholder consultations. The rules replace the earlier Private Health Insurance (Registration) Rules 2007 and are designed to facilitate the continued provision of health insurance products to existing members of restricted access groups, employees, and their dependents, reflecting current industry practices. They also clarify that applicants for registration need not necessarily be a company, thereby broadening the scope of eligible entities. The rules were developed following consultations with the Health Insurance Restricted Membership Association of Australia (HIRMAA) and its members, as evidenced by the release of an Exposure Draft on 20 September 2007 and a subsequent draft on 2 October 2007. The new rules provide specific descriptions of groups for existing restricted access insurers, ensuring these insurers can continue to offer compliant health insurance products to their current and future members. Additionally, the rules enable insurers to extend coverage to former, current, and future employees, as well as their immediate family and former partners, where applicable. The Private Health Insurance (Registration) Rules 2007 (No. 2) are a legislative instrument under the Legislative Instruments Act 2003 and will take effect seven days after their enactment.

Scope and Application

The Private Health Insurance (Registration) Rules 2007 (No. 2) are legislative instruments made under section 333-20 of the Private Health Insurance Act 2007, providing specific rules for the registration of private health insurers by the Private Health Insurance Administration Council (PHIAC). These Rules, which replace the Private Health Insurance (Registration) Rules 2007, apply to any entity or individual seeking registration as a private health insurer in Australia. They outline the criteria and considerations that the Council must take into account when deciding an application for registration, including the likely ratio of management and administration expenses to premiums, the number of persons contributing to the fund, and the proposed premiums. Moreover, the Rules specify the groups for existing restricted access insurers, ensuring continuity of coverage for current members and their defined family groups. These Rules also allow insurers to extend coverage to former, current, and future employees, as well as to certain family members, reflecting industry practices. The Rules do not specify any exclusions or thresholds but provide a clear framework for the registration process, ensuring compliance with the obligations imposed by the Act.

Key Provisions

The Private Health Insurance (Registration) Rules 2007 (No. 2) provide specific details and requirements for the registration of private health insurers under Part 4-3 of the Private Health Insurance Act 2007 (the Act). Rule 5 of the Rules requires the Private Health Insurance Administration Council (PHIAC) to consider several factors when deciding an application for registration, including the likely ratio of management and administration expenses to premiums, the number of people expected to contribute to the fund, the proposed premiums, and any information provided by the Secretary of the Department regarding the applicant’s ability to comply with the Act's obligations (Rule 5(1)). Rule 6 further clarifies the groups for existing restricted access insurers, ensuring that these insurers can continue to provide cover to existing insured persons and certain related groups, such as employees, partners, and dependent children of the Principal Insureds (Rule 6(a)-(g)). The Rules also define the limits on the insurance provided by restricted access insurers, specifying that insurers can only have one restricted access group and cannot add new persons beyond those already defined by the Act and the Rules (Rule 7(a) and (b)). The obligations imposed by the Act and the Rules on private health insurers include a comprehensive assessment by PHIAC during the registration process, which involves evaluating the applicant's financial management practices, the potential membership, and compliance with statutory requirements (Rule 5). Insurers must also ensure that their restricted access groups are accurately defined in accordance with Rule 6, maintaining their eligibility criteria and ensuring continuity of coverage for their existing and specified related members. Furthermore, restricted access insurers are required to adhere to the restrictions on adding new persons to their groups, as outlined in Rule 7(b). These obligations are designed to maintain the integrity and stability of the private health insurance system in Australia. Breaches of the obligations or requirements set out in the Act and the Rules can result in significant penalties. For instance, failure to comply with the registration process or misrepresentation of facts in an application could lead to civil or criminal penalties, including fines and potential disqualification from operating as a private health insurer. While specific penalties are not detailed in the explanatory statement, it is implied that non-compliance with the regulatory framework could result in enforcement actions by the relevant authorities, including financial penalties and legal sanctions. The exact penalties would depend on the nature and severity of the breach, in line with the provisions of the Private Health Insurance Act 2007.

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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.