Justine Elliot (Richmond, Australian Labor Party, Minister for Ageing) Share this | Hansard source

The Private Health Insurance Legislation Amendment Bill 2008 will amend the Private Health Insurance Act 2007, the Australian Securities and Investment Commission Act 2001, the Corporations Act 2001, the Insurance Act 1973 and the Insurance Contracts Act 1984. The bill will make amendments associated with private health insurers and their business. This bill is primarily concerned with enabling private health insurers to operate without unnecessary regulatory constraints. On the whole, they are changes requested by private health insurers in order to improve aspects of the way they do business. In making these amendments, the government is demonstrating its willingness, where appropriate, to respond to requests from the sector to assist them in operating more efficiently and effectively.

The amendments will remove the requirement for dual regulation by both the Private Health Insurance Administration Council and the Australian Prudential Regulation Authority of relevant health related business such as overseas visitors cover and overseas students cover conducted within a health benefits fund. Dual regulation was to commence on 1 July 2008. However, consultations conducted with the industry and the Private Health Insurance Administration Council identified the significant cost and administrative burden that would be placed on health insurers offering this type of cover in meeting both the Private Health Insurance Administration Council and the Australian Prudential Regulation Authority prudential standards. Consequently, the bill will permanently remove dual regulation requirements to provide that relevant health related business conducted within a health benefits fund is regulated by the Private Health Insurance Administration Council alone.

The bill will also require all private health insurers to be companies within the meaning of the Corporations Act by 31 December 2009. At present, private health insurers can be registered as a company or a registered body. However, there are administrative complexities associated with this and it has been difficult for the Private Health Insurance Administration Council to regulate the industry effectively. By requiring all private health insurers to be companies under the Corporations Act, all insurers will be subject to similar accountability standards and governance requirements, thus improving equity in the regulation of the industry. Restricted access insurers are currently required to provide statements regarding their membership requirements in their constitutions. The bill will ease this administrative burden by providing that restricted access insurers may specify their membership requirements in their constitutions or operational rules, which is the preference of many restricted access insurers. Amendments will also clarify that private health insurers may offer premium discounts to corporate employee groups including contractors and other persons allowed on certain policies without offending the community rating provisions.

Lastly, the bill will provide a rule-making power to allow private health insurers to conduct pilot projects to test new models of cover on targeted groups of fund members. This will ensure that participating insurers will be well placed to offer broader health cover in their products and policies. The introduction of broader health cover by the previous government was intended, in part, as a mechanism for enhancing the role of preventative health and chronic disease management in private health insurance. The government looks forward to seeing an improved uptake of broader health cover by private health insurers as a result of this change.

Question agreed to.

Bill read a second time.

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