General PHIAC Circulars
CHANGES TO PRUDENTIAL STANDARDS APPLICABLE TO HEALTH BENEFITS FUNDS
CONDUCTED BY REGISTERED ORGANIZATIONS
In November 2004, the Private Health Insurance Administration Council
(PHIAC) issued a discussion paper to interested parties seeking comments
in relation to PHIAC’s proposed approach for dealing with changes
to Australian Accounting Standards that apply to the industry after 1
January 2005.
PHIAC’s objective is to amend the prudential standards such that
the impact of the application of margins for risk & uncertainty for
accounting purposes is eliminated and the capital requirements of health
benefits funds will differ as little as possible after application of
IFRS embedded accounting standards.
PHIAC has considered the responses received from interested parties and
has prepared a paper (1) identifying the changes
that will be made to its prudential standards. That paper is attached
to this circular.
PHIAC considers that these changes to the PHI prudential standards are
an interim measure and necessary only until a broader review of the PHI
prudential standards can be undertaken. Work to review the prudential
standards framework in place for private health insurers is planned to
begin by mid-2006.
Further enquiries should be addressed to the contact officer.
1 PHIAC, Changes to the Prudential Standards for the
Australian Private Health Insurance Industry - Changes arising from changes
to AASB 1023 and other Accounting Standards, May 2005.
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