Commonwealth Consolidated Acts

PRIVATE HEALTH INSURANCE (PRUDENTIAL SUPERVISION) ACT 2015 - SECT 33

When an arrangement may be entered into

  (1)   A private health insurer (the transferee insurer ) may enter into an arrangement with one or more other private health insurers ( transferor insurers ) under which:

  (a)   insurance policies that are referable to a health benefits fund or funds ( transferring funds ) of the transferor insurer or transferor insurers become referable to a health benefits fund or funds ( receiving funds ) of the transferee insurer; and

  (b)   in relation to each of the transferring funds, the insurance policies concerned are:

  (i)   all of the insurance policies that are referable to the transferring fund; or

  (ii)   all of the insurance policies that are referable to the transferring fund and that belong to one or more policy groups of the fund.

  (2)   However, the arrangement must not take effect unless:

  (a)   the insurers referred to in subsection   (1) apply jointly to APRA, in the approved form, for approval of the arrangement; and

  (b)   APRA approves the arrangement in writing; and

  (c)   the insurers comply with any requirements imposed on the insurers in relation to the arrangement by APRA rules made for the purpose of this paragraph.

How APRA decides whether to approve the arrangement

  (3)   APRA must approve the arrangement if it is satisfied that:

  (a)   the assets and liabilities that would be transferred, under the arrangement, to the receiving fund or funds represent a reasonable estimate of what would, immediately before the restructure, be:

  (i)   if there is only one transferring fund--the net asset position of the fund; or

  (ii)   if there is more than one transferring fund--the sum of the net asset positions of each of the funds; and

  (b)   if, under the arrangement, there would be more than one receiving fund--those assets and liabilities would be fairly distributed between the receiving funds; and

  (c)   if subparagraph   (1)(b)(i) applies to any transferring fund--the net asset position of the fund immediately after the arrangement takes effect will not be greater than zero; and

  (d)   the arrangement will not result in any contravention of prudential standards if it takes effect.

Note:   Refusals to approve transfers are reviewable under section   168.

  (4)   For the purposes of paragraph   (3)(a), in working out the net asset position of a transferring fund to which subparagraph   (1)(b)(ii) applies, disregard the net asset position of the fund to the extent that it relates to insurance policies that do not belong to a policy group referred to in that subparagraph.

APRA rules may provide for various matters

  (5)   APRA rules may provide for the following:

  (a)   criteria for the approval of applications under subsection   (2);

  (b)   how to work out reasonable estimates of the kind referred to in paragraph   (3)(a);

  (c)   criteria for deciding under paragraph   (3)(b) whether assets and liabilities would be fairly distributed;

  (d)   requirements to notify interested persons of the outcomes of such applications;

  (e)   matters connected with how arrangements take effect, including the following:

  (i)   insurance policies becoming referable to a health benefits fund or funds of the transferee insurer;

  (ii)   policy liabilities and other liabilities incurred for the purposes of a health benefits fund or funds of a transferor insurer becoming treated as policy liabilities and other liabilities incurred for the purposes of a health benefits fund or funds of the transferee insurer;

  (iii)   assets of a health benefits fund or funds of a transferor insurer becoming assets of a health benefits fund or funds of the transferee insurer;

  (iv)   the timing of arrangements;

  (f)   requirements for private health insurers to give APRA information following arrangements taking effect.

Notice to be given if arrangement takes effect

  (6)   The transferee insurer must, within 28 days after the arrangement takes effect, notify APRA of the arrangement. The notice must comply with any requirements specified in APRA rules made for the purpose of this subsection.

Effect of arrangement

  (7)   For the purposes of this Act and the Private Health Insurance Act 2007 , an insurance policy that becomes referable to a health benefits fund of the transferee insurer as a result of the arrangement is treated, after the arrangement takes effect, as if it were an insurance policy issued by the transferee insurer.

Approval is not a legislative instrument

  (8)   An approval under this section is not a legislative instrument.