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Circular No 09/03

General PHIAC Circulars

INSURERS TO PROVIDE KEY MONTHLY STATISTICS TO PHIAC COMMENCING FEB 2009

As a precautionary response to the declining economic environment, PHIAC has decided to commence collecting a limited series of statistics on a monthly basis until further notice.

PHIAC’s new M return – which will focus on movements in claims and membership numbers – will become mandatory with effect from the end of the reporting month of February 2009.

The data collected, which is already provided to PHIAC by the industry as part of regular quarterly reports, will enable the Board of PHIAC to have regular and current information about two leading indicators of potential prudential risk in the private health insurance industry.

PHIAC stresses that in electing to take this course it is not presently aware of any significant prudential risks posed to the industry.  Rather, it is intended to be a temporary response to the significant volatility being experienced in many capital markets and the broader economy.

Private health insurance is historically a tightly held product with relatively little overall volatility.  Nevertheless the current economic circumstances have been widely described as unprecedented and, as a precautionary measure, PHIAC has considered this step warranted on a temporary basis.

Prior to taking this step, PHIAC has consulted with the industry and confirmed that the collection of this data is unlikely to impose any significant additional compliance or cost burdens on the funds.

An electronic copy of the template, entitled PHIAC M Return, is provided on the ‘Forms’ page of PHIAC’s website. Returns should be sent to returns@phiac.gov.au.  Insurers are not required to provide a printed hard copy.

The monthly statistics must be provided no later than six days after the end of the relevant reporting month.  The first collection will be for the reporting month of February 2009. Insurers are however encouraged to submit their January monthly data. This will provide insurers with a trial run of the new template and ensure that the data submitted for February and thereafter is in line with PHIAC’s information requirement.