As we indicated in our January 2015 article "New era of
supervision of Australian private health insurers", we are
continuing to provide updates as the supervision of Australian
private health insurers transitions from PHIAC to APRA. In this
latest update, we report on APRA's release of its proposed
prudential and reporting framework for Australian private health
It has been proposed that by 1 July 2015 the Private Health
Insurance Administration Council (PHIAC) will
cease to exist and the prudential supervision of the Australian
private health insurance industry that is currently managed by
PHIAC under the Private Health Insurance Act 2007
(PHI Act) will be transferred to the Australian
Prudential Regulation Authority (APRA).
During January 2015, the Treasury Department undertook a
consultation process of the exposure draft of the proposed
Private Health Insurance (Prudential Supervision) Bill
2015 (the Bill) as well as the changes that
will be made to the current PHI Act. Only ten submissions were
received in relation to the Bill. In general, the submissions noted
that the functions and powers of APRA to regulate prudential
matters largely reflected the existing provisions within the PHI
Act and, where there are changes, the changes are relatively minor.
The Bill will now proceed to the Federal Parliament for
As part of the process of APRA taking on powers with respect to
private health insurers, on 31 March 2015 APRA released a
discussion paper on their proposed prudential and reporting
framework for the supervision of private health insurers (the
Discussion Paper) along with the draft Prudential
Standards, Rules and Reporting Standards. The consultation period
is open until 18 May 2015 and written submissions can be made to
APRA's approach to regulation of private health
As identified in the Discussion Paper, APRA intends to continue
the existing prudential requirements, rules and reporting
arrangements currently administered by PHIAC without substantive
APRA notes that:
It will not make any changes to the existing capital adequacy
and solvency standards for private health insurers before 1 July
Over time it will begin to review the prudential standards for
private health insurers consistent with its periodic review and
approach with respect to other financial institutions which it
We will keep you informed of any developments with respect to
the Discussion Paper, the Bill and the implementation of Prudential
Standards by APRA with respect to private health insurers.
here to read our January 2015 update.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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