Federal Register of Legislation - Australian Government

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Determinations/Other as made
This Determination relates to a levy imposed by the General Insurance Supervisory Levy Imposition Act 1998 on companies registered under the Insurance Act 1973.
Administered by: Treasury
Registered 01 Jul 2009
Tabling HistoryDate
Tabled HR11-Aug-2009
Tabled Senate11-Aug-2009
Date of repeal 01 Jul 2010
Repealed by General Insurance Supervisory Levy Imposition Determination 2010

EXPLANATORY STATEMENT

General Insurance Supervisory Levy Imposition Determination 2009

This determination relates to a levy imposed by the General Insurance Supervisory Levy Imposition Act 1998 on companies registered under the Insurance Act 1973.

This determination commences on 1 July 2009 and relates to the 2009‑10 financial year.  The General Insurance Supervisory Levy Imposition Determination 2008 is revoked upon commencement of this determination.  Consistent with section 50 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.

Subsection 8(1AA) specifies that the levy payable by a general insurance company for a financial year is to comprise of a general component and a special component.

2009‑10 General Component

For 2009‑10 financial year, the general component will fund the operations of the Australian Prudential Regulation Authority (APRA), and certain activities performed by the Australian Securities and Investments Commission and the Australian Taxation Office.

In relation to the general component, subsection 8(3) of the General Insurance Supervisory Levy Imposition Act 1998 allows the Minister to determine:

(a)           the maximum restricted levy amount for each financial year;

(b)          the minimum restricted levy amount for each financial year;

(c)           the restricted levy percentage for each financial year;

(ca)    the unrestricted levy percentage for each financial year;

(d)          how a general insurance company’s asset value is to be calculated;

This determination provides that the restricted component of the 2009‑10 general levy will be calculated at 0.02185 per cent of assets held by the entity, subject to a minimum of $4,700 and a maximum of $810,000.  The unrestricted component of the 2009-10 general levy will be calculated at 0.006796 per cent of assets held by the entity.

2009‑10 Special Component Levy

For 2009‑10 financial year, the special component will fund the costs of the National Claims and Policy Database (NCPD).  This component was levied for the first time in 2006‑07 following amendments to the General Insurance Supervisory Levy Imposition Act 1998.

In relation to the special component, subsection 8(3) of the General Insurance Supervisory Levy Imposition Act 1998 allows the Minister to determine:

(e)           the special maximum levy amount for each financial year;

(f)            the special minimum levy amount for each financial year;

(g)           the special levy percentage for each financial year; and

(h)           how a general insurance company’s eligible premium income (EPI) is to be calculated.

This determination provides that for a public/product liability insurer the special levy amount will be calculated at 0.1202 per cent of the insurer’s EPI, subject to a minimum of $5,000 and a maximum of $50,000.  For a professional liability insurer the special levy amount will be calculated at 0.2647 per cent of the insurer’s EPI, subject to a minimum of $5,000 and a maximum of $32,000.

This determination provides that the special levy payable by an insurer that writes both public/product liability and professional indemnity insurance is determined by adding the sum of:

                0.1202 per cent of the insurer’s EPI, arising from public/product liability insurance, subject to a minimum of $5,000 and a maximum of $50,000; and

                0.2647 per cent of the insurer’s EPI, arising from professional indemnity insurance, subject to a minimum of $5,000 and a maximum of $32,000.

This determination provides that for either a public/product or profession indemnity runoff insurer the special levy amount will be $2,500.  For insurers that provide both public/product and professional indemnity runoff insurance, the special levy amount will be $5,000.

The finance sector has been consulted on the 2009‑10 supervisory levies through a Treasury and APRA Consultation Paper released on 10 June 2009.

This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.