Regulatory Framework

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This provides links to current Legislation and Rules.

PHIAC has established minimum capital standards under Divisions 140 and 143 of the Private Health Insurance Act 2007 (the Act)  There are currently two capital standards, being:

  • The Capital Adequacy Standard which aims to ensure that there is sufficient capital within a health benefits fund to enable the ongoing conduct of the business of the fund
  • The Solvency Standard which aims to ensure that assets of sufficient quantum and quality exist to meet all the liabilities of the fund, as they become due

PHIAC is currently conducting an intensive review of the capital standards to ensure that they take into account changes in the industry and continue to promote best practice capital management by insurers.  The review is expected to be completed in 2012.

The solvency and capital adequacy standards appear under Schedules 2 and 3 of the Private Health Insurance (Health Benefits Fund Administration) Rules 2007 (the Rules)

The Rules are made under item 1 of the table in section 333-25 for the purposes of Part 4-4 of the Act, and commenced on 1 April 2007. 

Prudential Standards are established under Division 163 of the Act. 

The Industry Guidance Notes provide guidance to the  industry on regulatory issues. They include practice notes, compliance checklists and policy documents.

The current PHIAC 1 Audit Programs and Guidance and the required format for the audit certificate, Data Dictionary and PHIAC1 Guidance are accessible here.

The PHIAC 2 Audit Guidelines are provided to assist health insurers and their auditors in the audit of their year-end financial accounts.