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Circular No 120
General PHIAC Circulars
Circular No 120
Contact Officers:
Paul Groenewegen (02) 6285 3134
email: paul.groenewegen@phiac.gov.au
Matthew Savage (02) 6285 3135
email: matthew.savage@phiac.gov.au
16 July 2001
ANNUAL REPORT TO PARLIAMENT
FINANCIAL YEAR ENDED 30 JUNE 2001
Contents of this Circular
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Basis for Inclusion of Amounts at Contributions and Benefits Detail Schedule
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Statement by Directors in Relation to Capital Adequacy Margin
Schedule of Information to be Provided
Registered Health Benefits Organisations must provide the following information to PHIAC by COB 30 September 2001.
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PHIAC 2 Annual Return, Contributions and Benefits Detail and Schedules 1 through 11.
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Public Officers Report covering the PHIAC 2 Annual Return and incorporating contact details for PHIAC enquiries.
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Auditor's Report on the preparation of the PHIAC Annual Return incorporating the statement included in the PHIAC 2 Audit Guidance (if issued).
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Statement by Directors in relation to the Capital Adequacy Margin.
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A copy of the Audit Report in relation to the statutory financial accounts.
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A copy of any report to members regarding the organisation's operations issued during the 2000/2001 financial year.
Where the health fund is a part of an economic entity, a copy of the consolidated financial accounts for the 2000-01 financial year.
Organisations are reminded that the practice of reporting non-compliant organisations in relation to the Annual Return will again be applied.
PHIAC 2 Annual Return Template
PHIAC Annual Returns for the year ended 30 June 2001 are to be submitted using the PHIAC Annual Return template. A copy of the PHIAC Annual Return Template on disk accompanies this document where it has been sent directly to RHBO Public Officers. Additional copies of the template will also be available to RHBOs upon request.
Submission of Annual Return
The Annual Return must be submitted in electronic form, either by email or on disk, with a confirming hardcopy following. The hardcopy must be received by Friday, 5 October 2001.
Market Yield Rate
PHIAC has determined that the market yield applicable to the calculation of the Renewal Option Reserve to be applied by all Registered Health Benefits Organisations for the PHIAC Annual Return is 4.898%.
The investment earnings rate as prescribed by Division 2.8 of the Health Benefits Organisations Interpretation Standard 2000 for the Annual Return is 3.898%.
Relief in Relation to Items That Have Become Certain
Registered Health Benefits Organisations may obtain relief from risk adjustments required by the calculation of the Solvency and Capital Adequacy requirements in relation to Reinsurance Accrued Liability amounts where this amount is known in certainty. Relief will apply to reverse risk related amounts by making an adjustment to the Solvency Liability at cell D33 of Schedule 9 of the PHIAC Annual Return and Capital Adequacy Liability at cell D98 of Schedule 9 of the PHIAC Annual Return.
The adjustments made must reflect the difference between the risk adjusted Reinsurance Accrued Liability calculations for Solvency and Capital Adequacy and the reinsurance outcome for the organisation for the quarter ended 30 June 2001 as advised by PHIAC.
Basis for Inclusion of Amounts at Contributions and Benefits Detail Schedule
The basis of the amounts to be included for each State in relation to the Contributions and Benefits Detail Schedule of the Annual Return is to be consistent with the requirements for reporting certain members of the PHIAC 1 (Reinsurance) Return (ie. the 500 SEU rule).
Report by Organisation
Organisations are not required to submit the "Report by Organisation" that details the assumptions and procedures used in calculating the solvency and capital adequacy requirements as prescribed by the Standards unless;
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The assumptions made or procedures used are significantly different from those adopted in the preparation of the PHIAC 2 Return for the quarter ended 30 June 2001, or
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The organisation is requested to do so by PHIAC.
Requirement to Report Solvency & Capital Adequacy Position
PHIAC imposes no additional reporting requirement beyond those contained in other statutory reporting requirements in relation to the disclosure by organisations of their Solvency and Capital Adequacy positions in statutory financial accounts.
Statement by Directors in Relation to Capital Adequacy Margin
A statement signed by at least 2 directors of the organisation certifying that the capital adequacy margin adopted by the organisation for the annual return is considered appropriate and has been endorsed by a resolution of the Board of the organisation must be prepared and submitted with the PHIAC Annual Return.
PHIAC's suggested statement for this purpose is as follows;
"The Board of [Organisation], at a meeting held on [Date], after consideration of the qualitative factors specified by Division 2.7 (Capital Adequacy Margin) of the Health Benefits Organizations - Interpretation Standard 2000, resolved that the Capital Adequacy Margin of [x]% is an appropriate margin for risk for the purposes of the preparation of the PHIAC Annual Return for the [Organisation] for the year ended 30 June 2001."
Revised Reporting Requirements
Revised PHIAC Reporting Requirements have effect for reporting periods beginning on or after 1 July 2001. A copy of the Reporting Requirements accompanies this document where it has been sent directly to RHBO Public Officers. Additional copies will also be available to RHBOs upon request. (pdf Format )