Second Reading SpeechMr Frydenberg (Assistant Treasurer)
That this bill be now read a second time.
The second bill in this package of legislation is the Private Health Insurance (Prudential Supervision) (Consequential Amendments and Transitional Provisions) Bill 2015. This bill makes consequential amendments to relevant legislation, including the repeal of the provisions relating to the formation of the council in the Private Health Insurance Act 2007. The bill also contains transitional provisions to ensure the smooth transfer of functions from the council to APRA by 1 July 2015.
The bill will establish special accounts to administer two of the levies that will now be collected by APRA, the Collapsed Insurer Levy-should there be a requirement for it to be levied-and the Risk Equalisation Levy. The Risk Equalisation Levy Special Account replaces the Private Health Insurance Risk Equalisation Trust Fund previously administered by the council.
While the health minister will retain overall policy responsibility for the Risk Equalisation Trust Fund Special Account, APRA will maintain a similar role administering the Risk Equalisation Special Account as the council had administrating the Risk Equalisation Trust Fund.
The bill makes a number of consequential amendments to relevant legislation, both in my portfolio and others, to facilitate the transfer of functions to APRA. These include amendments to:
- the Australian Prudential Regulation Authority Act 1998, to provide for matters relating to secrecy of information concerning private health insurers, and to provide for the administration of industry levies;
- the Financial Institutions Supervisory Levies Collection Act 1998, to cater for the collection of the private health insurance supervisory levy and the collection of collapsed insurance levy; and
- the Financial Sector (Collection of Data) Act 2001, to facilitate the collection of data relating to private health insurers by APRA. This amendment will ensure that APRA can continue the current collection of industry data and the subsequent production of reports. This includes enabling APRA to remake the existing reporting obligations of private health insurers as a series of reporting standards that replicate the standards currently set by the council. The current reporting obligations and methods of reporting for private health insurers will remain unchanged.
Minor amendments will also be made to the Income Tax Assessment Act 1997, the Life Insurance Act 1995and the Medibank Private Sale Act 2006 to update or replace references to the new Prudential Supervision Act, and to the Ombudsman Act 1976 to enable the sharing of information with APRA.
A number of transitional provisions have been provided in the bill relating to the repeal of provisions establishing the council and the transfer of functions of the council to APRA.
Such provisions are needed to ensure that actions undertaken or deemed to be undertaken under the old regime immediately before the transition time are taken to be undertaken under equivalent provisions in the Prudential Supervision Act. Examples include: continuing the registration of private health insurers; continuing to progress applications for registration that have not been finalised by 30 June, and continuing the restructure of health benefits funds should the approval already be in place.
Finally, there are machinery provisions for the transfer of the council staff, assets, liabilities and records to APRA.
The full details of amendments made by this bill are contained in the explanatory memorandum.