Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)General outline and financial impact
General outline and financial impact
The Private Health Insurance (Prudential Supervision) Bill 2015 (Prudential Supervision Bill) creates a regime for the prudential regulation of private health insurers by the Australian Prudential Regulation Authority (APRA).
The Private Health Insurance (Prudential Supervision) (Consequential Amendments and Transitional Provisions) Bill 2015 (Consequential Amendments and Transitional Provisions Bill) makes consequential amendments to relevant legislation including the repeal of the provisions relating to the formation of the Private Health Insurance Administration Council (the Council) in the Private Health Insurance Act 2007 (PHI Act). It also provides for necessary transitional arrangements to facilitate the transfer of the Private Health Insurance Administration Council's (the Council) prudential functions to APRA from 1 July 2015.
The Private Health Insurance Supervisory Levy Imposition Bill 2015 (Supervisory Levy Imposition Bill), the Private Health Insurance (Risk Equalisation Levy) Amendment Bill 2015 (Risk Equalisation Levy Bill) and the Private Health Insurance (Collapsed Insurer Levy) Amendment Bill 2015 (Collapsed Insurer Levy Amendment Bill) provide for the continued imposition of levies upon the private health insurance industry to fund APRA's supervision of the industry, the Risk Equalisation Trust fund and a levy to fund should there be a collapsed insurer.
Date of effect: The Prudential Supervision Bill comes into effect on 1 July 2015 or, if the Bill does not receive Royal Assent before 1 July 2015, on a date fixed by proclamation. The Consequential Amendments and Transitional Provisions Bill has multiple commencement dates, some provisions commence on Royal Assent or the day after, others commence at the same time or immediately after the commencement of the Prudential Supervision Bill.
Proposal announced: The proposal was announced as part of the 2014-15 Budget.
Financial impact: Nil
Human rights implications: These Bills are compatible with human rights. To the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate. See Statement of Compatibility with Human Rights - Chapter 15.
Compliance cost impact: Nil, no compliance cost assessment.
Summary of regulation impact statement
As the policy involves a machinery of government change, the Office of Best Practice Regulation considered that a Regulation Impact Statement was not required.
The measure will not change the regulatory costs on business, community organisations or individuals and the compliance costs under the package are substantively the same as the costs under the PHI Act.