Private Health Insurance (Risk Equalisation Administration) Rules 2025

REPLACEMENT EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Private Health Insurance Act 2007, subsection 333-25

On 11 September 2025, APRA made the Private Health Insurance (Risk Equalisation Administration) Rules 2025 (the Rules). The Rules are made under subsection 333-25 of the Private Health Insurance Act 2007 (the Act) for the purposes of section 318-15 and must be complied with by private health insurers.

The instrument commenced on 30 September 2025.

1.             Background

APRA’s role is to protect the financial interests of Australians by maintaining the safety and soundness of financial institutions. To do this, APRA sets legal requirements and guidance for the entities it regulates (the prudential framework).

The prudential framework comprises:

• legally binding prudential standards and rules;
• legally binding reporting standards; and
• supporting guidance (such as prudential practice guides).

Private Health Insurance (Risk Equalisation Administration) Rules 2025 are a legally binding Rule.

Private Health Insurance (Risk Equalisation Administration) Rules 2025 remakes the previous version of the Rule with minor amendments.

2.             Purpose and Operation

The purpose of the instrument is to revoke Private Health Insurance (Risk Equalisation Administration) Rules 2015 and replace it with a new version. The new version makes minor amendments to the previous by updating dates, references and titles of related legislation. There will be no change in outcomes following the minor update.

These Rules set requirements for insurers that are subject to the Risk Equalisation Levy to keep particular kinds of records. These Rules specify general requirements for records to be kept for each fund and specify further records to be kept for the purposes of the high cost claimants pool. Details of the Rules are set out in Attachment A to this Explanatory Statement.

3.             Consultation

Public consultation was undertaken on the draft rules. The consultation was jointly run by APRA and the Department of Health, Disability and Ageing (the Department) and covered the remaking of Private Health Insurance (Risk Equalisation Administration) Rules 2015 (administered by APRA) and three rules administered by the Department (Private Health Insurance (Risk Equalisation Policy) Rules 2015, Private Health Insurance (Health Benefits Fund Policy) Rules 2015, Private Health Insurance (Levy Administration) Rules 2015). Public consultation commenced on 13 January 2025 and closed 31 March 2025.

As part of the consultation, it was proposed that the previous version of the Private Health Insurance (Risk Equalisation Administration) Rules 2015 remained fit for purpose and should be replaced substantially in the same form. The consultation sought to understand stakeholder views on this approach and gather feedback on a small number of proposed minor amendments.

Three submissions were received in response to the consultation. The submissions responded to the proposals for all four rules being remade, including the Private Health Insurance (Risk Equalisation Administration) Rules 2015. Two submissions were received from PHIs and one submission from a non-government organisation.  

All submissions were supportive of the draft rules. Only one minor amendment was suggested. This suggestion was that paragraph 3(2)(f) of Private Health Insurance (Risk Equalisation Administration) Rules 2015 be removed as it references a redundant insured group of ‘3 or more adults’. This feedback was accepted, and paragraph 3(2)(f) was removed in the 2025 version of the rules.  

4.             Incorporation by reference

Under paragraph 14(1)(a) of the Legislation Act 2003, the Rules may incorporate by reference as in force from time to time:

• Acts of Parliament and associated delegated legislation;
• Prudential Standards determined by APRA under subsection 92(1) of the Act; and
• Reporting Standards determined by APRA under subsection 13(1) of the Financial Sector (Collection of Data) Act 2001.

These documents may be freely obtained on the Federal Register of Legislation at www.legislation.gov.au.

5.             Impact Analysis (IA)

The Office of Impact Analysis has confirmed that an IA is not required as the remaking of these Rules are unlikely to have more than a minor regulatory impact.

6.             Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

A statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is provided at Attachment B to this Explanatory Statement. 

ATTACHMENT A

Details of the Rules

Part 1

Part 1 of the Rules provides for the title, commencement date and interpretations.

Part 2

Part 2 of these Rules set requirements for insurers that are subject to the Risk Equalisation Levy to keep particular kinds of records. These Rules specify general requirements for records to be kept for each fund and specify further records to be kept for the purposes of the high cost claimants pool. 

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Private Health Insurance (Risk Equalisation Administration) Rules 2025

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 purpose of the Legislative Instrument is to revoke Private Health Insurance (Risk Equalisation Administration) Rules 2015 and replace it with Private Health Insurance (Risk Equalisation Administration) Rules 2025.

Private Health Insurance (Risk Equalisation Administration) Rules 2025 set requirements for insurers that are subject to the Risk Equalisation Levy to keep particular kinds of records. 

Human rights implications

APRA has assessed the Legislative Instrument and is of the view that it may impose a minor limit on a person’s right to privacy and reputation recognised or declared in the international instruments listed in Section 3 of the HRPS Act, as it requires the collection of personal information by the Private Health Insurer under sections 4 and 5 of the Private Health Insurance (Risk Equalisation Administration) Rules 2025.

Where a Private Health Insurer (PHI) collects personal information under sections 4 and 5 of the Private Health Insurance (Risk Equalisation Administration) Rules 2025, APRA would expect that each PHI would have safeguards in place which govern the collection, use and publication of the information in accordance with their obligations under the Australian Privacy Principles and the Privacy Act 1988, including internal policies.  

Where the PHI provides this information to APRA (pursuant to various Reporting Standards), it is collected in aggregate form so that no personal or sensitive information can be identified. However, if any of the information received is considered personal or sensitive information, a range of safeguards apply to how APRA collects, uses or discloses that information. These include:

• APRA’s Privacy Policies and privacy collection notices, which are available on our website;
• data security and integrity measures as required to comply with Australian Privacy Principle 11 to secure personal information, and as required to comply with and the Commonwealth Protective Security Policy Framework; and
• the secrecy provisions in section 56 of the Australian Prudential Regulation Authority Act 1998.

Conclusion

Accordingly, in APRA’s assessment, to the extent that the Legislative Instrument may impinge upon rights to a person’s privacy and reputation recognised or declared in the international instruments listed in section 3 of the HRPS Act, this Legislative Instrument is compatible with human rights.