Bills Digest no. 119 2005–06
General Insurance Supervisory Levy Imposition Amendment
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
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Insurance Supervisory Levy Imposition Amendment Bill
Date introduced: 2 March 2006
House: House of
Commencement: On Royal Assent
The purpose of the Bill is to amend the General Insurance
Supervisory Levy Imposition Act 1998 to provide for a special
levy to be charged to insurance companies in addition to the
existing levy payable under that Act.
The Financial Institutions Supervisory Levies Collection Act
1998 and General Insurance Supervisory Levy Imposition Act
1998 together provide for a scheme whereby general insurance
companies are liable to pay a levy to the Australian Prudential
Regulation Authority (APRA). The purpose of the levy is to
reimburse the Commonwealth for the cost of providing the regulatory
framework for the insurance industry.
In the course of its functions, APRA has established a data base
the National Claims and Policies Database (NCPD) - for specific
information on public liability and professional indemnity
insurance.(1) The information on the NCPD is gathered
directly from insurers. The purpose of the NCPD is to enable
insurers, the community and government to better understand these
classes of insurance .(2) The NCPD is specifically
mentioned in the Assistant Treasurer s second reading speech, and
the recovery of the costs of operating the NCPD seems to have been
the motivation for the amendments proposed in the Bill. The Bill
does not, however, specifically refer to the NCPD. Rather, the
amendments simply enable a special levy component to be imposed on
insurers of a particular class. In the future, the provisions may
be used to recover costs of running other schemes that form part of
APRA s regulatory functions.
The policy behind the Bill is captured in a statement by the
Assistant Treasurer in his second reading speech:
In line with the government s cost recovery
principles, only those insurers who contribute to, and can thereby
benefit from, the database should contribute towards its cost.
Insurers who do not use the database should not be expected to fund
it through the general supervisory levy.(3)
According to Joel Fitzgibbon MP the Bill is non-controversial
and enjoys the support of the opposition .(4)
Item 1 inserts into section 6 a definition of
special statutory upper limit , which will be the
maximum amount that the Treasurer can set as the special maximum
levy amount under the Act. For the financial year commencing 1 July
2006, the amount will be $500,000, thereafter to be indexed.
Item 5 inserts new subsection
8(2A) which provides a scheme for the calculation of the
special component of the levy. In effect, the amount will be
determined by the Treasurer by legislative instrument, subject to
the limits imposed under the Act.
Item 8 inserts new subsection
8(4A) which specifies that the maximum amount determined
by the Treasurer must not exceed the special statutory upper
Item 10 provides for the amendments to apply to
the financial year commencing 1 July 2006 and later years.
The Bill appears to be uncontroversial. Its provisions are
sufficient to fulfil its objective of amending the General
Insurance Supervisory Levy Imposition Act 1998 to enable the
Treasurer to impose a special levy on insurers of a particular
- The NCPD website can be viewed at: http://www.ncpd.apra.gov.au/Home/Home.aspx
- Peter Dutton, Minister for Revenue and Assistant Treasurer,
Second reading speech: General Insurance Supervisory Levy
Imposition Amendment Bill 2006 , House of Representatives,
Debates, 2 March 2006, p. 2.
- Joel Fitzgibbon, Second reading speech: General Insurance
Supervisory Levy Imposition Amendment Bill 2006 , House of
Representatives, Debates, 30 March 2006, p. 78.
5 May 2006
Bills Digest Service
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© Commonwealth of Australia 2006
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Published by the Parliamentary Library, 2006.
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