HEALTH LEGISLATION AMENDMENT BILL (No. 3) 1999
APRIL 1999
© Commonwealth of Australia 1999
ISSN 1440-2572 |
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Committee Secretary
Senate Standing Committees on Community Affairs
PO Box 6100
Parliament House
Canberra ACT 2600
Australia
Membership of the Committee
Members
| Senator Sue Knowles, Chairman |
LP, Western Australia |
| Senator Andrew Bartlett, Deputy Chair |
AD, Queensland |
| Senator Kay Denman |
ALP, Tasmania |
| Senator Alan Eggleston |
LP, Western Australia |
| Senator Chris Evans |
ALP, Western Australia |
| Senator David MacGibbon |
LP, Queensland |
Participating Members
| Senator Eric Abetz |
LP, Tasmania |
| Senator Bob Brown |
Greens, Tasmania |
| Senator Mal Colston |
Ind, Queensland |
| Senator the Hon Rosemary Crowley |
ALP, South Australia |
| Senator the Hon John Faulkner |
ALP, New South Wales |
| Senator Michael Forshaw |
ALP, New South Wales |
| Senator Brenda Gibbs |
ALP, Queensland |
| Senator Brian Harradine |
Ind, Tasmania |
| Senator Meg Lees |
AD, South Australia |
| Senator Dee Margetts |
GWA, Western Australia |
| Senator the Hon Chris Schacht |
ALP, South Australia |
| Senator John Woodley |
AD, Queensland |
REPORT
Health Legislation Amendment Bill (No. 3) 1999
1. THE INQUIRY
1.1 The Health Legislation Amendment Bill (No. 3) 1999 was introduced
into the House of Representatives on 11 March 1999. On 24 March 1999,
the Senate, on the recommendation of the Selection of Bills Committee
(Report No. 4 of 1999), referred the provisions of the Bill to the
Committee for report by 30 April 1999.
1.2 The Committee considered the Bill at a public hearing on 22 April
1999. Details of the public hearing are referred to in Appendix 2. The
Committee received 12 submissions relating to the Bill and these are listed
at Appendix 1.
2. THE BILL
2.1 The Health Legislation Amendment Bill (No. 3) 1999 (the Bill) makes
amendments to the National Health Act 1953 to improve the prudential
regulation applied to the private health insurance industry, following
concerns raised by Government, consumers and the industry in regard to
prudential regulation which were identified in the 1997 Industry Commission
report on Private Health Insurance. The Bill also amends the Private
Health Insurance Incentives Act 1998, the Health Insurance Commission
Act 1973 and the National Health Act 1953 to enhance the implementation
of the Federal Government's 30 per cent private health insurance Rebate.
2.2 The Bill aims to improve prudential regulation of the private health
insurance industry by allowing it to be more effective, flexible and responsive
to market changes. This aim will be achieved by measures including:
- the transfer of the function of approving registration, deregistration
and mergers from the Department of Health and Aged Care (DHAC) to the
Private Health Insurance Administration Council (PHIAC) to ensure that
PHIAC is `independent of both the policy making arm of government and
industry stakeholders';
- the strengthening of the deregistration provisions;
- ensuring that all future health funds seeking registration are incorporated
as a company and that their primary purpose is the operation of a health
benefits fund;
- the repeal of current minimum reserve requirements and the introduction
of a scheme providing for Solvency and Capital Adequacy Standards;
- ensuring that health fund contributors are better protected by restricting
health fund monies for use only in the health fund business, ensuring
health funds manage their assets in the interests of contributors and
allowing the Count to set aside certain transactions that are manifestly
not in the interests of contributors;
- making health fund managers more accountable by making them liable
to pay a civil penalty where the organisation has breached the Act and
the managers have failed to take reasonable steps to ensure that such
contraventions do not occur;
- allowing PHIAC to be given broader inspectoral powers that are equal
to those of the Minister;
- replacing judicial management provisions with a scheme that allows
PHIAC to appoint an administrator to a fund or to a registered organisation
in difficulty, have the administrator operate in the interests of contributors
and require the administrator to recommend to PHIAC the outcome; and
- replacing the current winding up provisions with new provisions that
allow either voluntary or Court ordered winding up of either a fund
or registered organisation and, where winding up occurs, give contributors
priority in the distribution of health benefit fund assets. [1]
2.3 The Bill will enable the private health insurance incentives scheme
to operate more smoothly and efficiently by:
- ensuring that there is greater consistency in eligibility requirements
for the premium reduction scheme compared with the other methods of
claiming the Rebate;
- removing the requirement for annual registration in the premiums reduction
scheme for individuals and health funds; and
- streamlining and improving processes for health funds to claim the
Rebate for reduced premiums. [2]
2.4 A summary of the legislative changes and a table of appeal and review
provisions contained in the Bill provided by DHAC in its submission is
reproduced in Appendix 3 of this report.
3. ISSUES
3.1 There was general support for the reforms contained in the Bill that
would allow the health insurance industry to become more efficient through
improved prudential regulation of health funds and to increase protection
for contributors to private health funds. [3]
The Bill is designed to protect the interests of consumers. The only concerns
regarding particular provisions of the legislation were raised in evidence
by some providers or their representatives.
The role of PHIAC
3.2 The Australian Health Insurance Association (AHIA) argued that `the
legislation itself does not guarantee that PHIAC will at all times act
in the interests of contributors' and that it is not as equally responsible
as the Minister for Health and Aged Care. [4]
3.3 DHAC responded by noting that PHIAC is an independent regulator.
It is accountable to the Minister and `it has a mandate, through its role
and responsibilities imposed by this Bill, to act in the interests of
consumers'. [5] Further, that `it is a fundamental requirement
of sound industry regulation that the regulator be independent of both
the policy making arm of government and the industry concerned'. [6]
3.4 Other witnesses agreed that there is a need for an independent regulator.
[7] The Medical Benefits Fund of Australia (MBF)
also went on to note that `a virtue of vesting the powers in PHIAC, as
both the monitoring authority and the regulating authority, is that it
recognises that health insurance is a highly specialised product'. [8]
3.5 AHIA also noted that there was no health insurance industry representation
on PHIAC but that it is funded by the industry. In response, DHAC stated
that it believed that it would be inappropriate for the industry to be
represented on a regulatory body. Further, that `it is an accepted part
of all insurance regulatory regimes in Australia that regulators may raise
the revenue they require by levying the industry'. [9]
Appointment of an administrator
3.6 Concerns were expressed that under the proposed legislation PHIAC
will have very broad power to appoint an administrator (section 82XF).
It was argued that PHIAC could, in fact, appoint an administrator for
a `trivial breach' and that it would be more appropriate to require PHIAC
to seek approval from a judicial body before an administrator was appointed
to oversight a fund. [10] Concern was also
raised that additional grounds for the appointment of an administrator
may be specified in regulations. [11]
3.7 DHAC responded to these concerns by noting that the grounds of appointment
of an administrator `are not excessive and are justifiable'. PHIAC will
only be able to appoint an administrator if, and only if, it believes
such action to be in the interests of contributors and if the organisation
has breached either the Solvency and Capital Adequacy Standards or a significant
provision of the National Health Act. [12] DHAC also noted that the Bill provides for grounds
for appointment to be established in regulations as `the minimum reserve
requirements as they exist at the moment have not changed for a good many
years and what we are concerned to ensure is that, as the industry evolves
and as circumstances changes, there is a capacity to deal with any unforeseen
circumstances'. [13]
Cancellation of registration
3.8 AHIA expressed concern that PHIAC had broad powers to cancel the
registration of a registered organisation. [14] DHAC noted that at the present time cancellation
is very mechanistic and essentially only occurs when a fund is wound up
or it mergers with another fund. However, in special circumstance, it
may be appropriate for PHIAC to have discretion to cancel a registration.
For example, where a fund has `wilfully and repeatedly breached the [National
Health] Act and was, in doing so, bringing the private health insurance
industry as a whole into disrepute or having serious implications for
the interests of health benefit fund contributors' PHIAC may consider
it appropriate to cancel the registration of a fund. However, DHAC agreed
that this was an action of `last resort'. [15]
Appointment of inspectors
3.9 Section 82R will allow the Minister or PHIAC to appoint an inspector
to a registered organisation to investigate the affairs of the organisation
in certain circumstances. Currently, the Minister is required to give
an organisation at least 14 days to show cause as to why it should not
be investigated. The Bill proposes to remove the `show cause' procedure.
3.10 AHIA argued that an organisation should have the right to be heard
before an inspector is appointed. It stated that `the right to be heard
is one of the most fundamental principles of natural justice'. Further,
that if PHIAC is to have the power to appoint an inspector it should be
required to `show cause' that the organisation has not acted in the interests
of contributors or otherwise in contravention of the Act. AHIA stated
that the Bill imposes very considerable discretion on PHIAC and `leaves
open the possibility of capricious action which would not be accepted
by a Court'. [16]
3.11 In response DHAC stated:
The Bill provides that, firstly, an inspector who can only report on
the circumstances of the health benefits fund would only be appointed
if PHIAC lacked confidence in the information volunteered by registered
organisations. The principles of natural justice will continue to apply
and can be enforced under the Administrative Decisions (Judicial Review)
Act. At this point, there would have been long negotiations between
the health fund and PHIAC. [17]
Liability of directors
3.12 Concerns were raised about provisions in the Bill which impose a
liability on officers of registered organisations for loss to health funds
due to contraventions of the Act and where the Court has ordered the fund
or organisation to be wound up. The Bill provides that a person is not
liable if the person proves that they used due diligence to prevent the
occurrence of the contravention. Witnesses argued that this reverses the
onus of proof in relation to the due diligence defence. It was also argued
that `a positive obligation should be imposed upon the liquidator to prove
that the officer did not act with due diligence'. [18]
3.13 In response, DHAC noted:
The provision is designed to ensure that those directors who have done
their best in order to protect the assets of the fund at the time -
and perhaps were outvoted on a board - may offer forward evidence that
they in fact tried their hardest to protect the assets of the fund.
But those directors who, for whatever reason, did not show the degree
of skill, care and concern that would be expected may find themselves
facing a payment of, essentially, damages to the health fund because
of the loss they allowed to occur. [19]
Right of appeal
3.14 Witnesses raised concerns about the right of organisations to challenge
or appeal against decisions of PHIAC or the Minister. These decisions
included:
- the making, removing or varying of solvency and/or capital adequacy
directions;
- the appointment of an inspector;
- the appointment, removal or replacement of an administrator. [20]
3.15 DHAC stated that:
As with all government regulatory bodies, it is quite important to
have checks and balances in that framework. In setting the solvency
and capital adequacy standards within this legislation for the industry,
PHIAC will be required to consult with the Government Actuary. All decisions
of PHIAC will either be appealable through the Administrative Appeals
Tribunal, reviewable under the Administrative Decisions (Judicial Review)
Act or subject to parliamentary disallowance. [21]
A list of review and appeal provisions provided in DHAC's submission
is reproduced in Appendix 3 of this report.
Corporations Law
3.16 In its submission, AHIA raised a number of concerns about possible
conflict of the proposed legislation with Corporations Law. [22]
It stated that the power vested in PHIAC to appoint an administrator (section
82XD) is in conflict with Corporations Law. Further, there is no similar
provisions in Corporations Law for the giving of a general direction to
the administrator (section 82XG) or replacement of an administrator (section
82XK).
3.17 DHAC stated that the proposed legislation will override Corporations
Law in relation to the appointment of an administrator and thus there
is no conflict. It was noted that this is also the case in the regulation
of other insurance schemes such as life insurance. DHAC also stated that
the provisions providing PHIAC with the ability to give a general direction
to the administrator had been inserted because the administrator is appointed
by the regulator (PHIAC), not creditors as is the case in Corporations
Law. To take account of this difference, DHAC stated that `it is appropriate
that PHIAC be able to offer general direction to an administrator'. DHAC
indicated that the provisions allowing the replacement of the administrator
were included as there may be circumstances were an administrator may
need to be replaced for example, if the administrator could not complete
the task due to ill health. [23]
3.18 AHIA raised concerns that approval will be required from PHIAC to
wind up an organisation or fund. Under Corporations Law, approval is not
required from an overseeing body to wind up a company. DHAC stated that
PHIAC's approval is required as it has responsibility for contributors'
interests. Under Corporations Law a person is winding up their own business.
However, because of the special nature of health insurance, DHAC stated
that it was appropriate that PHIAC `be able to vet a decision to wind
up and would not seek to stand in the way of such a decision but would
simply seek to ensure, in winding up a fund, that the organisation had
taken into account the interests of the contributors and had put in place
all the appropriate mechanisms to ensure they were appropriately protected'.
[24]
3.19 AHIA also noted that there were no broad provision in the Corporations
Law making directors of a company in liquidation personally liable for
losses sustained from any breach of the Corporations Law and thus the
legislation conflicts with Corporations Law. [25]
3.20 DHAC acknowledged that this was true but pointed out that the Life
Insurance Act contains an exactly equivalent provision. The provision
`seeks to focus the minds of directors upon decisions they make and reminds
them that, if a decision is unlawful or contrary to the Act and leads
to a loss to the fund and that loss subsequently leads to a Court ordered
winding up of the organisation, that director or officer would be potentially
held accountable for their inactivity'. [26]
4. RECOMMENDATION
4.1 The Committee reports to the Senate that it has considered the Health
Legislation Amendment Bill (No. 3) 1999 and recommends that the
Bill proceed.
Senator Sue Knowles
Chairman
April 1999
LABOR SENATORS REPORT
This hearing has allowed a number of issues raised by this legislation
to be explored in detail. The Chairman's report deals with a number of
these concerns but omits others and does not address at all the issues
raised concerning Schedule 3.
Regulatory framework (Schedule 1)
The evidence heard by the Committee indicates that the evolution of PHIAC
from an advisory committee to a fully empowered statutory body is far
from complete.
Whilst the PHIAC witnesses were satisfied with their current role it
was clear that the Department had a dominant position in relation to their
activities. The split between policy and implementation has not been properly
defined. With only 6 staff, PHIAC is dwarfed by the Private Health Insurance
branch of the Department which has 36 staff and an overarching role, filtering
contact with the Minister.
The Government should reconsider its current approach and look at an
alternative model based on a stand alone regulatory agency dealing with
private health insurance matters and directly advising the Minister.
It was claimed that the legislation gave an emphasis to the rights of
consumers but this is not evident. Under the legislation PHIAC still lacks
an objectives clause which clearly spells out its purpose and the priorities
the Board should consider.
The procedures in relation to adoption of new rules are solely between
the fund, the Council and the Minister. As the Private Health Insurance
Ombudsman has commented on the problems caused by consumers who are unaware
of rule changes it would seem good practice to require that rule changes
be notified to members prior to coming into effect.
The lack of a consumer objective is exacerbated by a lack of emphasis
on controlling the cost of private health insurance. If the sole objective
was prudential management, PHIAC would not place restraint on the rate
of premium increases. As many of the products and rule changes being developed
by the Funds have the effect of pushing up premiums there has been an
unhappy recent history of premiums increasing at more than double the
rate of inflation.
Prudential Standards (Schedule 2)
The evidence presented suggests the framework proposed may produce resilient
prudential standards that are more appropriate than the current two pronged
test. However evidence from the Institute of Actuaries highlighted some
concerns that need to be considered by the Board of PHIAC in arriving
at its decision on a new standard.
The Department initially advised that the advice of the Australian Government
Actuary was compelling – but later corrected this to say the Board
were compelled to seek that advice but not to accept it. There are reasonable
grounds for this but the process should be transparent.
If the Board do not accept the advice of the Australian Government Actuary
then they should be required to state why they decided to reject or vary
such advice. The prudential standards are themselves disallowable instruments
but the Senate would need to be well informed about the process followed
to form a judgement whether a sound decision had been made.
Administration of the Private Health Insurance rebate (Schedule 3)
The purpose of Schedule 3 is to make retrospective amendments to facilitate
the introduction of the 30% private health insurance rebate. The amendments
seek to overcome defects in the original legislation and to simplify the
administrative burden on the insurance funds – most notably by reducing
the annual registration requirement to a “once off” process.
The retrospective nature of the changes made in this legislation are
highly undesirable. In this case they have been made necessary by the
poor drafting of the Government's 1998 legislation and its failure to
heed the warnings it was given.
From the Department's evidence it appears the Government was aware of
a number of these shortcomings when it put legislation through the Parliament
in December 1998. Rather than admit the shortcomings the Government chose
to proceed as a matter of political expediency. This is a bad way to develop
legislation as the changes in this Bill will further confuse the public
about the steps required to obtain the rebate.
The submission from the Australian Consumers Association has highlighted
the anomalies concerning the exclusion of a fund as a participant in the
rebate scheme. There should be measures to ensure a consumer is not disadvantaged
by the exclusion of their fund from the premium reduction scheme and movement
between funds in such circumstances should be facilitated.
The Bill also increases the powers to recover debts to the Commonwealth
where a rebate has been allowed and subsequently disallowed. Although
the Bill will make it possible to seek a review of a refusal of a rebate
it does not permit a review of an alleged overpayment.
It would seem prudent to provide the Commission with the power to waive
disputed debts given the complexity of the scheme – particularly
in circumstances where the consumer had been wrongly advised by the Fund,
the Commission or in Government advertising.
Recommendation
That the Bill be amended to address the concerns raised in our report.
Senator Chris Evans
(ALP, Western Australia)
Senator Kay Denman
(ALP, Tasmania)
APPENDIX 1 - Submissions received by the Committee
| 1 |
The Hospital Benefit Fund of Western Australia Inc.
|
| 2 |
Private Health Insurance Administration Council (PHIAC) |
| 3 |
Australian Health Management Group |
| 4 |
Brent Walker Actuarial Services Pty Limited |
| 5 |
Australian Health Insurance Association Ltd |
| 6 |
Institute of Actuaries of Australia |
| 7 |
Health Insurance Restricted Membership Association
of Australia (HIRMAA) |
| 8 |
Department of Health and Aged Care |
| 9 |
Medical Benefits Fund of Australia Limited |
| 10 |
Private Health Insurance Ombudsman |
| 11 |
Queensland Teachers' Union Health Society |
| 12 |
Australian Consumers' Association |
APPENDIX 2 - Public Hearing
A public hearing was held on the Bill on 22 April 1999 in Senate
Committee Room 2S3.
Committee Members in attendance
Senator Sue Knowles (Chairman)
Senator Kay Denman
Senator Chris Evans
Witnesses
Department of Health and Aged Care
Ms Lynelle Briggs, First Assistant Secretary, Portfolio Strategies Division
Ms Chris Woodgate, Assistant Secretary, Private Health Industry Branch
Ms Liz Lowrie, A/g Director, Insurance Regulation and Quality Section,
Private Health Industry Branch
Mr Chris Lyon, A/g Assistant Director, Insurance Regulation and Quality
Section, Private Health Industry Branch
Mr Michael Robbins, Manager, Budget Initiatives Branch, Health Insurance
Commission
Health Insurance Restricted Membership Association of Australia
Mr Michael Bassingthwaighte, Secretary
Mr Norman Branson, Vice President
Institute of Actuaries of Australia
Mr Jock Rankin, Executive Director
Mr David Torrance, Councillor
Australian Health Insurance Association
Mr Russell Schneider, Chief Executive Officer
Private Health Insurance Administration Council (PHIAC)
Mr Garry Richardson, Commissioner
Ms Gayle Ginnane, Chief Executive Officer
Ms Trish Cassidy, Director, Finance
APPENDIX 3 - SUMMARY OF LEGISLATIVE CHANGES
NEW LEGISLATION
|
NEW LEGISLATION |
ORIGINAL LEGISLATION
|
ORIGINAL LEGISLATION |
| Function |
New Requirement |
Section |
Old Requirement |
Section |
- Health fund/regulator accountability & transparency
|
- Future registered health benefits organisations (organisations)
must be a company for the purpose of conducting a health benefits
fund with all income credited to that fund.
|
68 |
A society, body or group of persons conducting
a health benefits fund could apply for registration as an organisation
regardless of whether they were incorporated. |
68 (1A) |
| |
- Unincorporated registered organisations must become incorporated
within a time specified by the Minister.
|
|
- New requirement – no previous equivalent.
|
|
-
|
- To continue to be registered, organisations must continue to
meet eligibility requirements.
|
73AAB |
New requirement – no previous equivalent. |
nil |
| |
- The Council must consult with the Australian Government Actuary
concerning the solvency standard and must publish it in the Gazette
as soon as practicable after establishing it.
|
73BCB |
New requirement – no previous equivalent. |
nil |
| |
- Every registered organisation must comply with the solvency
standard unless otherwise declared by the Council in writing.
|
73BCD |
Compliance with prescribed minimum reserve
requirements unless exemption sought and granted. |
73BAB
73BAC
|
| |
NEW LEGISLATION
|
|
ORIGINAL LEGISLATION
|
|
| Function |
New Requirement |
Section |
Old Requirement |
Section |
- Health fund/regulator accountability & transparency (cont.)
|
- If the Council has reasonable grounds for believing that an
organisation may not be able to meet all its liabilities as they
become due, it may give the organisation written solvency directions
which must be complied with.
|
73BCE |
New requirement – no previous equivalent. |
nil |
| |
- The Council must consult with the Australian Government Actuary
concerning the capital adequacy standard and must publish it in
the Gazette as soon as practicable after establishing it.
|
73BCG |
New requirement – no previous equivalent. |
nil |
| |
- Every organisation must comply with the capital adequacy standard
unless otherwise declared by the Council in writing.
|
73BCI |
Compliance with prescribed minimum reserve
requirements unless exemption sought and granted. |
73BAB
73BAC
|
| |
- If the Council believes that the assets of an organisation will
not provide adequate capital for the conduct of its business,
it may give the organisation written capital adequacy directions
which must be complied with.
|
73BCJ |
New requirement – no previous equivalent. |
nil |
| |
NEW LEGISLATION
|
|
ORIGINAL LEGISLATION
|
|
| Function |
New Requirement |
Section |
Old Requirement |
Section |
- Health fund/regulator accountability & transparency (cont.)
|
- Officers (i.e. directors) of an organisation must take reasonable
steps to ensure that the organisation does not contravene the
Act.
|
|
- Only the public officer liable for contravention of the Act.
|
|
-
|
- An application can be made to the Administrative Appeals Tribunal
to review key decisions of the Council in relation to the application
of the solvency standard or capital adequacy standard.
|
105AB(3A)
“ (3B)
“ (3C)
“ (3D)
|
New requirement – no previous equivalent. |
nil |
- Increased protection for contributors
|
- In investing or managing its assets an organisation must give
priority to the interests of contributors of the fund.
|
73AAC |
New requirement – no previous equivalent. |
nil |
| |
- Organisations must ensure that payments from the health benefits
fund are only used for purposes directly related to the health
insurance business.
|
73AAD |
New requirement – no previous equivalent. |
nil |
| |
- If an organisation borrows money, enters into a contract of
guarantee or gives a charge over the assets of the fund the transaction
must not be manifestly contrary to the interests of the contributors
or an application may be made for Court intervention.
|
73AAE |
New requirement – no previous equivalent. |
nil |
| |
NEW LEGISLATION
|
|
ORIGINAL LEGISLATION
|
|
| Function |
New Requirement |
Section |
Old Requirement |
Section |
- Increased protection for contributors (cont.)
|
- The business, affairs and property of a fund or organisation
under administration are to be administered in a way that maximises
the chance that contributors to the fund continue to be covered
for health insurance (either by the fund to which they contribute
or by another fund to which the business of the fund is transferred).
If this is not possible, the financial interests of the contributors
should be safeguarded in the event of eventual winding up of the
fund or organisation.
|
Division 3 & 4 |
Appointment by the Court of a Judicial
Manager. Subsequently Court ordered transfer of funds or winding-up
of fund. |
82ZA – 82ZM |
| |
- The Court may make an order for the winding up of an organisation
or fund only if it considers the orders to be in the interests
of the contributors of the fund.
|
82ZZQA |
As above |
As above |
| |
NEW LEGISLATION
|
|
ORIGINAL LEGISLATION
|
|
| Function |
New Requirement |
Section |
Old Requirement |
Section |
- More efficient regulation
|
Applications for registration as an organisation
must be lodged with the Council. |
69 |
Formerly lodged with the Department. |
69 |
| |
- The Council may cancel the registration of an organisation if
it is satisfied that the organisation has repeatedly contravened
one or more of its obligations under the National Health Act.
|
79 |
New requirement – no previous equivalent. |
nil |
| |
- The Council is to establish a flexible solvency standard which
may differ depending on the type of fund and their circumstances.
|
73BCB |
New requirement – no previous equivalent. |
nil |
| |
- The Council is to establish a capital adequacy standard which
may differ depending on the type of fund and their circumstances.
|
73BCG |
New requirement – no previous equivalent. |
nil |
| |
- The Council may appoint a person as the administrator of an
organisation when there may be a risk of insolvency and the interests
of contributors may be threatened. The administrator must meet
prescribed criteria that try to ensure they are objective and
independent.
|
82ZB |
Appointment by the Court of a Judicial
Manager (long process). |
82ZA |
| |
NEW LEGISLATION
|
|
ORIGINAL LEGISLATION
|
|
| Function |
New Requirement |
Section |
Old Requirement |
Section |
- More efficient regulation (cont.)
|
- Winding up of an organisation can occur by order of the Court
following application by the Council or the administrator of the
fund or without Court approval on the passing of a special resolution
by directors or relevant members of the organisation or fund and
approval of that resolution by the Council (ie voluntary winding
up).
|
82ZZD |
Previously the application for winding-up
was made by the Minister.
No voluntary winding-up provisions.
|
82Z |
| |
- If a fund or organisation is under administration, the administrator
may convene a meeting of the creditors of the fund or organisation
to consider the possibility of the registered organisation executing
a voluntary deed of arrangement.
|
82ZHE |
New requirement – no previous equivalent. |
nil |
APPENDIX 4 - Appeal and Review Provisions
Power / Decision |
Type of review |
Decision of PHIAC to impose a condition of registration on health fund |
AAT Review |
Decision of Minister to grant a limited period of time for an unincorporated association that runs a health fund to incorporate under Corporations Law |
AAT Review |
Decision of PHIAC to impose a further condition of registration or vary a condition of registration under either s73(1) or s73ABD(1)(b) |
AAT Review |
Decision of PHIAC to cancel the registration of a health fund |
AAT Review |
Power for PHIAC to make Solvency Standards |
Disallowable Instrument |
Decision of PHIAC to declare that the Solvency Standards do not apply to a particular health fund, or health funds in specific circumstances |
AAT Review |
Decision of PHIAC to impose conditions upon a declaration that the Capital Adequacy Standards do not apply to a health fund |
AAT Review |
Decision of PHIAC to refuse to revoke or vary a Solvency Direction made to a health fund |
AAT Review |
Power for PHIAC to make Capital Adequacy Standards |
Disallowable Instrument |
Decision of PHIAC to declare that the Capital Adequacy Standards do not apply to a particular health fund, or health funds in specific circumstances |
AAT Review |
Decision of PHIAC to impose conditions upon a declaration that the Capital Adequacy Standards do not apply to a health fund |
AAT Review |
Decision of PHIAC to refuse to revoke or vary a Capital Adequacy Direction made to a health fund |
AAT Review |
Decision of PHIAC or Minister to appoint an inspector |
AD(JR) Act Review |
Decision of PHIAC to appoint an administrator |
AD(JR) Act Review |
Decision of PHIAC to cancel the appointment of an administrator to a health fund |
AAT Review |
Decision of PHIAC to make, or refuse to make, a determination that the administration of a health fund does not revive upon the termination of a voluntary deed of arrangement |
AAT Review |
Decision of HIC, after reconsideration, to refuse a claim |
AAT Review |
Decision of HIC to refuse to register a claimant |
AAT Review |
Decision of HIC to revoke a person's registration as a claimant |
AAT Review |
Decision of the Minister to refuse to approve an application to become a participating health fund in the premium reduction scheme |
AAT Review |
Decision of HIC stating that a claim is incorrect |
AAT Review |
Determination by Managing Director of information health funds must provide to the HIC about claimants (that is not otherwise listed in s19-1(2)) |
Disallowable Instrument |
Determination of principles by the Minister relating to the acquiring, storage of, security of, access to, correction of, use of and disclosure of information held by health funds about health fund members/claimants |
Disallowable Instrument |
Determination by Commissioner of Taxation of information to be provided by the HIC to the ATO |
Disallowable Instrument |
FOOTNOTES
[1] Submission No.8, pp.4-6 (DHAC); Explanatory
Memorandum pp.1-2.
[2] Second Reading Speech; Explanatory Memorandum
p.2.
[3] Submission No.6, p.1 (Institute of Actuaries
of Australia); Submission No.7, p.1 (Health Insurance Restricted Membership
Association of Australia); Submission No.9, p.1 (Medical Benefits Fund
of Australia); Submission No.10, p.1 (Private Health Insurance Ombudsman);
Submission No.11, pp.1,7 (Queensland Teachers' Union Health Society).
[4] Submission No.5, pp.2, 6 (AHIA).
[5] Committee Hansard, 22.4.99, CAp.29.
[6] Submission No.8, p.9 (DHAC).
[7] Submission No.6, pp.2-3 (Institute of Actuaries
of Australia).
[8] Submission No.9, p.3 (MBF).
[9] Committee Hansard, 22.4.99, CAp.31.
[10] Submission No.1, p.5 (Hospital Benefits
Fund of Western Australia); Submission No.5, p.2 (AHIA).
[11] Submission No.11, pp.3-4 (Queensland Teachers'
Union Health Society).
[12] Committee Hansard, 22.4.99, CApp.28-9;
Submission No. 8, p.32 (DHAC).
[13] Committee Hansard, 22.4.99, CAp.29.
[14] Submission No.8, p.2 (AHIA).
[15] Submission No.8, p.28 (DHAC), Committee
Hansard, 22.4.99, CAp.29.
[16] Submission No.5, p.3 (AHIA).
[17] Committee Hansard, 22.4.99, CAp.29.
[18] Submission No.3, p.2 (Australian Health
Management Group); Submission No.5, p.4 (AHIA); Submission No.11, p.7
(Queensland Teachers' Union Health Society).
[19] Committee Hansard, 22.4.99, CAp.30;
see also Submission No.8, p.31 (DHAC).
[20] Submission No.5, pp.4-5 (AHIA); Submission
No.7, p.1 (Health Insurance Restricted Membership Association of Australia);
Submission No.11, p.3 (Queensland Teachers' Union Health Society).
[21] Committee Hansard, 22.4.99, CAp.24.
[22] Submission No.5, p.5, (AHIA); see also
Submission No.11, pp.4-6 (Queensland Teachers' Union Health Society).
[23] Committee Hansard, 22.4.99, CAp.30.
[24] Committee Hansard, 22.4.99, CAp.30.
[25] See also Submission No.3, p.3 (Australian
Health Management Group).
[26] Committee Hansard, 22.4.99, CApp.30-1.