10/13

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Circular No 10/13

PDF Format
Circ 10/13
Contact Officers
Paul Collins 02 6215 7955
Email
paul.collins@phiac.gov.au
Replaces Circular
N/A

9th July 2010

2009–10 End of Year Reporting Requirements

This circular is to inform Registered Private Health Insurers (Insurers) of their reporting requirements to PHIAC for the year ended 30 June 2010. The circular contains:

  • Risk equalisation audit arrangements
  • PHIAC 2 annual reporting requirements
  • Schedule of critical dates for reporting
  • References to related documents available on PHIAC’s web site
    • Risk equalisation audit program
    • List of updates to the risk equalisation audit program
    • Guidance for Auditors for the PHIAC 2 Annual Return

Insurers are reminded that PHIAC will name, in its annual report to Parliament, those Insurers that do not meet the statutory reporting requirements.

Audit Arrangements for Financial Year Ended 30 June 2010

Insurers must ensure that their external auditors adopt the audit program and guidance provided by PHIAC, or an alternative that provides similar checks and levels of accuracy, for the 2009–10 financial year. Insurers are responsible for engaging competent auditors. Insurers and auditors are responsible for their own audit program and processes.

Risk Equalisation

PHIAC 1 returns (Risk Equalisation and related statistics) for the four quarters to 30 June 2010 are to be audited by external auditors. A copy of the audit program for PHIAC 1 returns submitted to PHIAC for the period 1 July 2009 to 30 June 2010 is available from the PHIAC website at http://www.phiac.gov.au/for-industry/regulatory-framework/audit-programs/. The required format for the audit opinion is included in the PHIAC 1 audit program as Appendix D.

A list of updates to the audit program is also available as a separate document at http://www.phiac.gov.au/for-industry/regulatory-framework/audit-programs/ .

Audit certification for the four quarters to 30 June each year must be provided within three months of the end of the financial year or such time as approved by the Commissioner. Please ensure that the certificate for the 2009–10 financial year reaches the PHIAC Secretariat by no later than 17:00 AEST, 30 September 2010.

PHIAC 2 (Annual) Return

PHIAC 2 (Annual) Returns for the 12-month period ended 30 June 2010 are to be subject to external audit to ensure consistency with the Insurer’s statutory financial accounts and faithful application of the solvency and capital adequacy standards.

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 2010 quarterly returns in the relevant circular. PHIAC circulars are available at: http://www.phiac.gov.au/circulars/.

To assist auditors in their review of these returns, audit guidance for auditors has been prepared. A copy of the audit program for the PHIAC 2 (Annual) Return is available from the PHIAC website at http://www.phiac.gov.au/for-industry/regulatory-framework/audit-programs/. The Guidance includes a pro forma opinion for auditors.

Audit certification for the PHIAC 2 (Annual) Return must be provided within three months of the end of the financial year or such time as approved by the Commissioner. Please ensure that a hardcopy of the opinion reaches the PHIAC Secretariat by no later than 17:00 AEST, 5 October 2010. Insurers must also ensure that each page of the hardcopy return is authenticated by inclusion of the auditor’s identifying stamp or signature.

Schedule of Information to be Provided

Insurers must provide the following information to PHIAC:

  1. Audit Opinion
    • PHIAC 1 – no later than 30 September 2010
    • PHIAC 2 – no later than 5 October 2010
  2. PHIAC 2 (Annual) Return
    • A PHIAC 2 Return for the 12-month period ended 30 June 2010. The completed return must be provided in both hard and soft copies.
    • Softcopy of the PHIAC 2 Annual Return – no later than 30 September 2010.
    • Hardcopy of the PHIAC 2 Annual Return – no later than 5 October 2010.
  3. Statutory Financial Accounts
    • A copy of the signed statutory financial accounts of the health benefits fund. [1]
    • 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.
  4. Financial Condition Report
    • Financial Condition Report prepared by the Insurer’s Appointed Actuary in respect of the 2009–10 financial year.
  5. Statement by Directors
    • The accounts and statements given to the Council must be certified by two directors of the Insurer to be true and correct and be in the form specified in the Private Health Insurance (Insurer Obligations) Rules 2009. The form specified in the Rules is included at Attachment 1.

SCHEDULE OF CRITICAL DATES FOR SUBMISSION OF DOCUMENTS

Due Date Document Comment
30 September 2010 PHIAC 1 audit certification for the four quarters to 30 June 2010 Must be received at PHIAC by no later than 17:00 [AEST].
30 September 2010 Softcopy 2010 Annual Return Must be received at PHIAC by no later than 17:00 [AEST].
5 October 2010 Hardcopy of 2010 Annual Return for 2010 Annual Return Must be received at PHIAC by no later than 17:00 AEST.
5 October 2010 Auditor's Report For the completed PHIAC 2 Return for the 12-month period ended 30 June 2010. Must be received at PHIAC by no later than 17:00 AEST.
5 October 2010 A copy of the statutory financial accounts of the health benefits fund Must be received at PHIAC by no later than 17:00 AEST.
5 October 2010 A copy of the Audit Report in relation to the statutory financial accounts. Where not already included in the copy of the statutory financial accounts. Must be received at PHIAC by no later than 17:00 AEST.
5 October 2010 A copy of the Financial Condition Report Prepared by the Insurer’s Appointed Actuary in respect of the 2009–10 financial year. Must be received at PHIAC by no later than 17:00 AEST.
5 October 2010 Statement by Directors in Relation to Capital Adequacy Margin, Loss Ratio and Risk Management Procedures Certified by two officers. (See Attachment 1). Must be received at PHIAC by no later than 17:00 AEST.

Soft copy can be emailed through to returns@phiac.gov.au. Each email must not be greater than 6MB in size.

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 2009.

Insurers requiring additional time to meet any reporting requirements must apply in writing no less than 7 days before the relevant due date.

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 (NOT the solvency requirement) is disclosed in the financial statements of the Insurer.

^ [1] Where the health benefits fund is a part of an economic entity, a copy of the consolidated financial accounts for the 2009–2010 financial year.