An Act to impose a levy to be known as the collapsed insurer levy on private health insurers, and for related purposes
1 Short title [see Note 1]
This Act may be cited as the Private Health Insurance (Collapsed Insurer Levy) Act 2003.
2 Commencement
This Act commences on 1 July 2004.
3 Crown to be bound
This Act binds the Crown in each of its capacities.
4 Extension of Act to external Territories
This Act extends to the Territory of Cocos (Keeling) Islands and to the Territory of Christmas Island.
5 Definitions
In this Act, unless the contrary intention appears:
collapsed insurer means a private health insurer, in respect of at least one of whose health benefits funds (within the meaning of the Private Health Insurance Act 2007) at least one of the following paragraphs applies:
(a) the Council has approved the termination of the health benefits fund under section 149‑10 of the Private Health Insurance Act 2007;
(b) the Council has appointed an external manager of the health benefits fund under section 217‑10 of the Private Health Insurance Act 2007;
(c) the Federal Court of Australia has ordered the appointment of a terminating manager of the health benefits fund under section 220‑5 of the Private Health Insurance Act 2007.
collapsed insurer levy means a collapsed insurer levy imposed under section 7.
collapsed insurer levy day means a collapsed insurer levy day specified in a determination under section 7.
complying health insurance policy has the same meaning as in the Private Health Insurance Act 2007.
Council has the same meaning as in the Private Health Insurance Act 2007.
levy determination means a determination by the Minister under paragraph 7(1)(b).
private health insurer has the same meaning as in the Private Health Insurance Act 2007.
6 Purpose of imposing collapsed insurer levy
The purpose of imposing a collapsed insurer levy is to help meet a collapsed insurer’s liabilities to the people insured under its complying health insurance policies that it is unable to meet itself.
7 Imposition of collapsed insurer levy
(1) If:
(a) a private health insurer is a collapsed insurer; and
(b) the Minister determines, by legislative instrument, that this section applies to the insurer;
collapsed insurer levy is imposed on each private health insurer (other than an exempt insurer) on each collapsed insurer levy day for the levy determination.
Note: Section 8 deals with exempt insurers.
(2) The Minister may determine, by legislative instrument, the day that is, or the days that are, to be the collapsed insurer levy day or days for the levy determination.
8 Exempt insurers
(1) A private health insurer is an exempt insurer in relation to a levy determination if:
(a) it is the collapsed insurer; or
(b) the Minister determines, by legislative instrument, that the insurer is an exempt insurer.
(2) The Minister may make a determination under paragraph (1)(b) if the Minister is satisfied that imposing the collapsed insurer levy on the insurer would have a significantly adverse effect on the insurer’s ability to comply with:
(a) the solvency standard under Division 140 of the Private Health Insurance Act 2007 or a solvency direction given to the insurer under section 140‑20 of that Act; or
(b) the capital adequacy standard under Division 143 of the Private Health Insurance Act 2007 or a capital adequacy direction given to the insurer under section 143‑20 of that Act.
9 Rate of collapsed insurer levy
(1) The rate of collapsed insurer levy imposed on a collapsed insurer levy day is the rate that:
(a) is determined by the Minister by legislative instrument; and
(b) applies on that day.
(2) In determining the rate of levy, the Minister must have regard to the total value of the collapsed insurer’s liabilities to people insured under its complying health insurance policies.
(3) The rate of levy:
(a) must be based on the number of complying health insurance policies that are on issue on the day determined by the Minister, by legislative instrument, as the census day for the levy day; and
(b) may be different for complying health insurance policies under which different numbers of people are insured; and
(c) may be set at zero.
10 Minister to obtain advice from Council
(1) Before making a determination under section 7, 8 or 9, the Minister must obtain, and take into account, advice from the Council in relation to the following matters:
(a) whether to make a levy determination;
(b) whether to make a determination under paragraph 8(1)(b);
(c) the day that is to be, or the days that are to be, specified as the collapsed insurer levy day or days;
(d) the rate that is to be specified as the rate of the collapsed insurer levy imposed on the collapsed insurer levy day or days;
(e) the day that is to be, or the days that are to be, specified as the census day or days for the collapsed insurer levy day or days;
(f) the total value of the collapsed insurer’s liabilities to people insured under its complying health insurance policies.
(2) An advice given to the Minister by the Council under subsection (1) must be laid before each House of the Parliament with the determination to which the advice relates.
11 Validation of collapsed organization levy
(1) This section applies to each amount that the Council purported before 1 July 2004 to impose as levy on a registered organization on a particular date under paragraph 82G(1)(j) of the National Health Act.
(2) By force of this section, collapsed organization validation levy of an equal amount is taken to have been imposed on the organization on that date.
(3) The amount of collapsed organization validation levy for which the organization is liable is:
(a) reduced by the sum of the amounts the organization paid on account of the levy the Council purported to impose under paragraph 82G(1)(j) of the National Health Act; and
(b) increased by so much of the sum of those amounts as the organization recovers from the Council.
(4) Amounts paid by an organization on account of levies that the Council purported to impose under paragraph 82G(1)(j) of the National Health Act are taken to be applied to the collapsed organization validation levies in the order in which the Council purported to impose the levies.
12 Regulations
(1) The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(2) Before the Governor‑General makes regulations under subsection (1), the Minister must take into consideration any relevant recommendation made to the Minister by the Council.
