Circular No 06/11

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Circular No 06/11

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

Replaces Circular: N/A

6 July 2006

PDF Format:

This Circular

Audit Guidelines

OPERATIONS OF THE REGISTERED HEALTH BENEFITS ORGANISATIONS REPORT
FINANCIAL YEAR ENDED 30 JUNE 2006
1.

Schedule of Information to be Provided

Registered Health Benefits Organisations must provide the following information to PHIAC;
 

1.1

2006 Annual Return

• A PHIAC 2 Return for the 12-month period ended 30 June 2006. This 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 preparation of the PHIAC 2 Return for the 12-month period ended 30 June 2006 incorporating the statement included in the Audit Guidance(1);
 

1.2

Statement by Directors in Relation to Capital Adequacy Margin, Loss Ratio and Risk Management Procedures (2)

1.2.1. Capital Adequacy Margin

This declaration must be signed by no less than two Directors of the organisation certifying that the Capital Adequacy Margin adopted by the organisation for the 2006 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.

1.2.2. Loss Ratio

Where the Board of an organisation 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 Division 2.11 Health Benefits Organizations – Interpretation Standard 2005, the Organisation must provide a statement certifying that the alternative loss ratio adopted by the organisation for the annual return is considered appropriate and has been endorsed by a resolution of the Board.

1.2.3. Risk Management Procedures

Two Directors of the Board must certify a statement regarding the risk management processes of the organisation (3).
 

1.3

Statutory Financial Accounts

• A copy of the statutory financial accounts of the Registered Organisation (4).
• Where not already included in the copy of the statutory financial accounts, a copy of the Audit Report in relation to the statutory financial accounts.
 

1.4

Financial Condition Report

A copy of the Financial Condition Report prepared by the Organisation’s Appointed Actuary in respect of the 2005/2006 financial year.

2.

 

Due Date for Submission of Documents
 

Softcopy 2006 Annual Return must be received at PHIAC by no later than Monday 2 October 2006.

All hardcopy documents must be received at PHIAC by no later than Wednesday 4 October 2006.

 

3.

Market Yield Rate

The Market Yield and Investment Earnings rates prescribed by Division 2.8 of the Health Benefits Organizations - Interpretation Standard 2005 to be applied by all Registered Health Benefits Organisations for the PHIAC Annual Return is to be consistent with the rate advised by PHIAC for the June 2006 quarterly returns in Circular No 06/10.

4.

Requirement to Report Solvency & Capital Adequacy Position

Paragraph 1.1.1(8) of the Health Benefits Organizations – Solvency Standard 2003 requires that the Solvency Requirement be disclosed in the financial statements of the Organisation.

The Capital Adequacy Requirement is not to be disclosed in the financial statements of the Organisation

(1) Guidance for Auditors has been prepared and is available from the PHIAC website via reference to this circular.

(2) The form of the statements by Directors is at Attachment 1

(3) Should the Directors of an organisation determine that the statement in relation to risk management cannot be signed, the organisation should contact PHIAC at the earliest opportunity

(4) Where the health fund is a part of an economic entity, a copy of the consolidated financial accounts for the 2004/2005 financial year;