The amendments to the income tax law applying to general insurers were announced by the Australian Government as part of the 2023–24 Budget, following introduction of accounting standard AASB 17 Insurance Contracts.
AASB 17 applies to general insurance contracts as well as to health insurance and life insurance contracts. However, the Budget announcement and the subsequent legislative amendments only related to general insurance companies. As a result, there is no change to how health insurance companies or life insurance companies are taxed.
Accordingly, the taxable income of a health insurance company continues to be determined by applying ordinary income tax provisions. Further, a life insurance company continues to be taxed under Division 320 of the ITAA 1997, which links to the APRA prudential standard. Therefore, Division 320 takes the value in that standard for tax purposes where relevant.