The Private Health Insurance Administration Council (PHIAC) is an independent Statutory Authority that regulates the private health insurance industry. PHIAC has had a busy year.
In 2007 PHIAC supervised the demutualisation and ASX Listing of NIB.
Although the new government decided not to privatise Medibank Private, this year MBF also demutualised.
Subsequently the following mergers have occurred:
- MBF’s acquisition by BUPA Australia;
- Australian Health Management acquisition by Medibank Private;
- Manchester Unity acquisition by HCF.
PHIAC has announced that it will restructure to bring a stronger focus to its statutory role of protecting the interests of consumers of private health insurance, including to make sure it can deal quickly and effectively in the (unlikely) event that there is a major prudential crisis within the PHI industry.
PHIAC will be rolling out a suite of prudential standards.
Capital standards have already been reviewed.
A draft standard on Corporate Governance is currently circulating within the industry for comment by 6 March 2009.
The draft standard includes rules on:
- board composition;
- independence of directors;
- residency of directors;
- director associates of shareholders;
- board charter;
- board policies;
- board performance;
- board renewal;
- board audit committee;
- conflicts of interest;
- internal audit.
It is clear that health funds will be coming under greater regulation and that PHIAC expects boards to be fully involved and responsible for their organisations.
Bright Law have had experience with these types of standards for listed companies (ASX) and financial institutions and insurers (APRA). Call us if you’d like to discuss key issues.