Bills Digest no. 87 2006–07
Private Health Insurance (Collapsed Organization Levy)
Amendment Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Detail
Passage History
Private
Health Insurance (Collapsed Organization Levy) Amendment Bill
2006
Date introduced:
7 December 2006
House: House of Representatives
Portfolio: Health and Ageing
Commencement:
Sections 1 to 3 on Royal
Assent. Schedule 1 commences 1 April 2007.
This bill amends the Private Health
Insurance (Collapsed Organization Levy) Act 2003 to update
definitions resulting from the replacement of the National
Health Act 1953 by the proposed Private Health Insurance
Act.(1)
Background
This Bill was introduced with six other Bills
that amend or create a range of Acts to reflect the new regulatory
regime detailed in the accompanying Private Health Insurance Bill
2006. On 7 December 2006 the Senate, on the recommendation of the
Selection of Bills Committee, referred the suite of Bills to the
Community Affairs Committee, for inquiry and report by 26 February
2007.
Separate Bills are required for each levy
because they could be construed as imposing a tax and section 55 of
the Constitution requires that such Bills deal with one subject of
taxation only .
The purpose of the collapsed organization levy
(also referred to in the Bill as the collapsed insurer levy) is to
assist in meeting the collapsed health insurer s liabilities to
those people insured under the insurer s health insurance policies
that it is unable to meet itself. To date there has been no
imposition of this levy on the industry.(2)
Schedule 1 replaces or updates a number of
definitions to reflect the replacement of the National Health
Act 1953 with the proposed Private Health Insurance Act
2006; these are described in the Explanatory Memorandum.
Broadly, the changes to definitions reflect the new terminology
under the new Act.
Item 5 defines a collapsed
insurer as a private health insurer where either the Private Health
Insurance Administration Council (PHIAC) has terminated the health
benefits fund, appointed an external manager to manage the fund, or
where the Federal Court orders the appointment of a terminating
manager of the fund.
Item 18 substitutes the
current description of the purpose of the collapsed organization
levy so that it reflects the replacement of the National Health
Act 1953 with the Private Health Insurance Act 2006.
The section describes the purpose of the levy as helping to meet
the collapsed insurer s liabilities to those people insured under
its complying health insurance policies. The previous description
of the levy referred to its purpose as helping to meet the
collapsed organization s liabilities to its contributors.
Item 19 repeals section 7 and
replaces it with a new section which imposes the collapsed insurer
levy on each private health insurer (other than an exempt insurer)
over a period determined by the Minister as a collapsed insurer
levy day.
Item 20 introduces a new
section that allows for certain categories of insurers to be exempt
from the levy the collapsed insurer itself, and those insurers
deemed exempt by the Minister. In making such an exemption, the
Minister must be satisfied that imposing the levy would
significantly adversely affect the insurer s ability to meet
solvency and capital adequacy standards.
Item 24 sets out that the
rate of the levy is based on the number of complying health
insurance policies on issue, in line with the new Health
Insurance Act 2006 previously this rate was based on the
number of contributors to the fund. The levy may be set at
zero.
Endnotes
-
Tony Abbott Private Health Insurance (Collapsed Organization
Levy) Amendment Bill 2006 Second Reading, House of Representatives
Hansard, 7 December 2006, p. 10.
-
Private Health Insurance Administration Council Operations
of the registered health benefits organisations Annual Report
2005-06 Canberra, PHIAC, 2006, p. 12
Amanda Biggs
13 February 2007
Bills Digest Service
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2006
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Published by the Parliamentary Library, 2007.
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