Board Charter

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PHIAC Board Charter

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Contents

PHIAC Objectives

The Private Health Insurance Administration Council (PHIAC) was established under section 82B of the National Health Act 1953. PHIAC continues in existence by force of section 264-1 of the Private Health Insurance Act 2007 (PHI Act). Section 264-5 of the Act provides that in performing its functions and exercising its powers, the Council must take all reasonable steps to achieve an appropriate balance between the following objectives:

  • fostering an efficient and competitive health insurance industry

  • protecting the interests of consumers

  • ensuring the prudential safety of individual private health insurers 

PHIAC Functions and Powers

The functions of the Council are specified under section 264-10 of the PHI Act. In addition to the functions detailed in section 264-10 of the Act, section 264-20 outlines the power of the Council to do all things necessary or convenient to be done for, or in connection with, the performance of its functions.

In addition to carrying out its responsibilities under the Act, the Council is required as a Commonwealth Authority to meet requirements imposed under the Commonwealth Authorities and Companies Act 1997 (the CAC Act).

Composition of the Board

The powers of the Council are vested in an independent Board made up of a Commissioner and two to four other Members, all appointed for a finite term, by the Minister for Health and Ageing. The Commissioner and Members of the Council hold office on a part-time basis as non-executive directors and are independent of both the Department of Health and Ageing and the industry.

Role and Responsibilities of Board Members

Board Members have the collective power, acting as the Board, to manage and direct the operations of the Council. The key responsibilities of the Board include:

  • ensuring that the regulatory functions of the Council pursuant to the Act are carried out in an effective and efficient manner

  • determining the strategic direction and objectives for the Council and monitoring the performance of management in achieving these objectives

  • approving an annual budget for the Council and monitoring the financial performance

  • overseeing the establishment of adequate internal controls and effective monitoring and evaluation systems

  • ensuring all major business risks are identified and effectively managed

  • ensuring that new areas of PHIAC responsibilities are identified and that appropriate policies are put in place by management to ensure that the responsibilities are met in accordance with the appropriate legislation

  • ensuring that Council meets its legal and statutory obligations; and

  • appointing and reviewing the performance of the Chief Executive Officer, approving the appointment of consultants, approving the terms and conditions of other staff, and planning for executive succession.

Section 22 of the CAC Act imposes the following general obligations on Members in the exercise of their powers and the discharge of their duties:

  • to act honestly, at all times; and

  • to exercise the degree of care and diligence that a reasonable person in a like position in a Commonwealth Authority would exercise in the authority’s circumstances.

Board Meetings

The Board has adopted the practice of holding Board meetings, in person, on a monthly basis, except for the months of January, April, July and October. Special Board meetings are called as and when required. Section 33B of the Acts Interpretation Act 1901 permits holding electronic meetings by telephone, closed-circuit television or any other means of communication. Decisions of the Board are on occasions made by means of a circulating resolution.

The Commissioner is to determine the procedure of the meetings and preside at all meetings when present. The Deputy Commissioner is to chair meetings in the absence of the Commissioner.

The Commissioner, as Chairman of the Board, is responsible for the leadership of the Board and for facilitating open and constructive communications between Members and encouraging their contribution to Board deliberations.

A majority of the Members constitutes a quorum. Questions are to be decided by a majority of votes of the Members present and voting. The Commissioner has a deliberative vote and, if necessary, also a casting vote.

Material Personal Interests

Section 27F of the CAC Act, and Section 270-45 of the PHI Act provides that a Member who has a material personal interest in a matter that is being considered, or about to be considered by the Board must disclose the nature of the interest at a meeting of the Board.

As a standard item at each Board meeting Members are requested to update their declarations of material personal interests. These updates are recorded in the minutes of the meeting.

Delegated Authority

The Board may delegate to the Chief Executive Officer or another member of staff, all or any of the functions or powers of the Council other than functions or powers under the CAC Act. Any delegation of function or power should be in writing under the PHIAC Common Seal.

The Board has delegated certain powers and responsibilities to the Chief Executive Officer and has determined, pursuant to section 273-5 of the PHI Act, that the Chief Executive Officer shall be responsible for the management of the affairs of the Council.

Committees

The Board has delegated some responsibility to the Audit and Compliance Committee. Other sub-committees may be established from time to time to deal with matters of special importance.

The Audit and Compliance Committee has a documented Charter, approved by the Board, setting out its function and responsibilities as delegated by the Board.

Board Review

The Board has adopted an annual review process to assess the performance of the Board and Members.

Changes to the Charter

This Charter, and the Charter of each Committee established by the Board, is to be reviewed by the Board at three-year intervals.

J Dominguez
Commissioner
September 2009