Circular No 07/22

Contact Officers:
Paul Groenewegen (02) 6215 7966
email: paul.groenewegen@phiac.gov.au

Replaces Circular: N/A

18 July 2007

Schedule of Information to be Provided

Private health insurers must provide the following information to PHIAC:

1.1

2007 Annual Return

• A PHIAC 2 Return for the 12-month period ended 30 June 2007. PHIAC has issued a new PHIAC 2 Return template (Version 07_06_x). The completed return must be provided in both hard and soft copies. Each page of the hardcopy return must be authenticated by inclusion of the auditor’s identifying stamp;

• Auditor's Report regarding the completed PHIAC 2 Return for the 12-month period ended 30 June 2007 incorporating the statement included in the Audit Guidance.

• Guidance for Auditors has been prepared and is available from the PHIAC website: http://www.phiac.gov.au/standardsguides/index.htm

1.2

Statutory Financial Accounts

• A copy of the statutory financial accounts of the health benefits fund(i).
• Where not already included in the copy of the statutory financial accounts, a copy of the Audit Report in relation to the

1.3

Financial Condition Report

A copy of the Financial Condition Report prepared by the private health insurer’s Appointed Actuary in respect of the 2006/2007 financial year.

1.4

Statement by Directors in Relation to Capital Adequacy Margin, Loss Ratio and Risk Management Procedures (ii)

1.4.1. Requirement for Certification by Two Officers

The accounts and statements given to the Council must be certified by two officers of the private health insurer to be true and correct and be in the form specified in the Private Health Insurance (Insurer Obligations) Rules 2007. The form specified in the Rules is included at Attachment 1.

1.4.2. Capital Adequacy Margin

A statement by directors of the insurer certifying that the capital adequacy margin adopted by the insurer for the 2007 Annual Return is considered appropriate and has been endorsed by a resolution of the Board of the insurer must be prepared and submitted with the PHIAC Annual Return.

1.4.3. Loss Ratio

Where the Board of a private health insurer believes that the sum of the claims ratio and the expense ratio may no longer be a best estimate of the prospective loss ratio for the purpose of calculating the unexpired risk liability in accordance with the capital adequacy standard, the insurer must provide a statement certifying that the alternative loss ratio adopted by the insurer for the annual return is considered appropriate and has been endorsed by a resolution of the Board.

1.4.4. Risk Management Procedures

A statement by directors of the insurer regarding the risk management processes of the private health insurer, which has been endorsed by a resolution of the Board of the insurer, must be prepared and submitted (iii).

2.

Due Date for Submission of Documents

Softcopy 2007 Annual Return must be received at PHIAC by no later than Midday [AEST], Monday, 1 October 2007.

All hardcopy documents must be received at PHIAC by no later than Wednesday, 3 October 2007.

Documents that are not in the appropriate form or are incomplete will not satisfy the lodgement requirements of this circular or, in some circumstances, those of the Private Health Insurance (Insurer Obligations) Rules 2007.

3.

Market Yield Rate

The Market Yield and Investment Earnings rates prescribed by Clause 25 of Schedule 3 of the Private Health Insurance (Health Benefits Fund Administration ) Rules 2007 to be applied by all health benefits funds for the PHIAC Annual Return is to be consistent with the rate advised by PHIAC for the June 2007 quarterly returns in Circular No 07/16.

4.

Requirement to Report Solvency & Capital Adequacy Position

Clause 5 of Schedule 2 of the Private Health Insurance (Health Benefits Fund Administration) Rules 2007 requires that the Solvency Reserve is disclosed in the financial statements of the insurer.