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 AmendmentRules)
are established undersection 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)
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.