A package of five Bills (the Private Health Insurance Bills Package) which transfer prudential regulatory responsibility for the private health insurance industry from the current regulator, the Private Health Insurance Administration Council (PHIAC) to the Australian Prudential Regulation Authority (APRA) has been passed by the House of Representatives.
UPDATE: Royal Assent granted on 26 June 2015.
The Bills in the package are:
• Private Health Insurance (Prudential Supervision) Bill 2015
• Private Health Insurance (Prudential Supervision) (Consequential Amendments and Transitional Provisions) Bill 2015
• Private Health Insurance Supervisory Levy Imposition Bill 2015
• Private Health Insurance (Risk Equalisation Levy) Amendment Bill 2015 and
• Private Health Insurance (Collapsed Insurer Levy) Amendment Bill 2015.
While the majority of changes merely reflect the change in regulator, there are some changes to the legislation intended to ensure alignment with APRA’s existing legislation.
APRA has stated that the prudential standards ‘are based on the principle of minimal change from the existing PHIAC equivalent requirements’. APRA says that there will be little disruption for the private health insurance industry, as substantively the same prudential regulatory requirements will apply following the transfer of PHIAC’s prudential supervision responsibilities to APRA.
The Senate Economics Legislation Committee has recommended passage of the Bills and that APRA should develop and publish guidelines that seek to assist the private health insurance industry to understand their obligations and the regulatory options available to APRA.
If the Bills are passed by the Senate and Royal Assent is received before 1 July 2015, the Bill commences on 1 July 2015. Otherwise it commences on a day to be fixed by proclamation in the six month period following Royal Assent, or the day after the end of that six month period.
UPDATE: From 1 July 2015 the role of the Private Health Insurance Ombudsman will transfer to the Office of the Commonwealth Ombudsman.