Type of entry

Ongoing regulatory activity.

Title

Continuation of the Review of the Solvency and Capital Adequacy Standards included in the Private Health Insurance (Health Benefits Fund Administration) Rules 2007.

Description of issue

The Solvency and Capital Adequacy Standards were introduced in legislation in 2000, with effect from 1 January 2001. PHIAC made the commitment that the Standards would be fully reviewed after five years of operation. The Review aims to assess and improve the efficiency, effectiveness and appropriateness of the Standards in their practical business settings.

Changes to the Accounting Standards imposed by the Government (AEIFRS) meant that the Standards must be reviewed to ensure that no additional financial burden is imposed on the funds by those accounting standards changes.

The review is being conducted in a staged approach. Phase 1 of the review was the changes made to the Capital Standards to reflect the changes in the legislative environment through the introduction of the Private Health Insurance Act 2007. The second stage of the review was announced in August 2007 and follows on from Phase 1.

Consultation opportunities

Terms of Reference were drawn up and the Review is being conducted in consultation with the private health insurance industry, their appointed actuaries and other relevant stakeholders.

Expected timetable

Completed by June Quarter, FY 2008-09

Contact details

Paul Groenewegen
Deputy CEO
02 6215 7966
paul.groenewegen@phiac.gov.au

Date last modified

June 2008

Type of entry

Planned regulatory activity.

Title

Prudential Standards.

Description of issue

Under section 333-25 of the Private Health Insurance Act 2007 PHIAC has the legislative power to impose governance standards on the private health insurance industry.

The Prudential Standard will set out the minimum requirements for the governance of private health insurers. It aims to ensure, as far as is practicable, that every health benefits fund is managed in a sound and prudent manner by a competent board of directors, that the directors are capable of making impartial and reasonable business judgments in the best interests of policyholders, and that the interests of consumers are not threatened by poor governance.

Subject to the outcomes of the industry consultation process, the standard will be incorporated into the Private Health Insurance (Insurer Obligations) Rules 2007.

Consultation opportunities

The introduction of the new Prudential Standards is being conducted in consultation with the private health insurance industry, and other relevant stakeholders.

Expected timetable

Rollout to industry: early 2009.

Contact details

Annemaree Gray
Manager, Governance
02 6215 7908
annemaree.gray@phiac.gov.au

Date last modified

June 2008