Insurance facts and figures 2007 - PwC

Regulation and supervision
2
from the appointed actuary (Section 116) for each type of policy to be written
and proposed reinsurance arrangements, service agreements, pro forma agency
agreements and sample promotional material.
Companies must have paid-up share capital of at least $10 million and an excess of
eligible assets over liabilities of at least $5 million.
Australian Financial Services Licence
ASIC requires all life insurers who sell insurance products to retail clients to hold an
AFSL. The requirements for licensing are discussed under “authorised representatives
and insurance brokers” later in this chapter, and the impacts on the sale and distribution
of insurance products are discussed in Chapter 3.
Ownership restrictions
The Financial Sector (Shareholdings) Act limits shareholdings to 15 per cent of
an insurer, unless otherwise approved by the Federal Treasurer. The Insurance
(Acquisitions and Takeovers) Act complements this legislation by requiring government
approval for offers to buy more than 15 per cent of an insurer.
HEALTH INSURANCE
An organisation may not carry on a health insurance business unless it is registered
under Part 4-3 of the Private Health Insurance Act 2007. This replaced Section 68 of the
Health Act.
The Private Health Insurance Administration Council has the power, on application to
register as private health insurers bodies that are incoporated bodies for the purposes
of the Corporations Law.
The Private Health Insurance Administration Council will take into account the ability
of the application to comply with the obligations imposed by the Act. Registration is
granted by the council subject to terms and conditions as the council sees fit.
Health funds must gain approval from the Prime Minister, Federal Treasurer and the
Minister for Health and Ageing for any rule changes, including rate changes.
Health insurance organisations may be incorporated under a variety of different statutes,
including companies and friendly societies incorporated under the Corporations Act
2001 and life insurance companies registered under the Life Act. There are also
various special federal, state and territory-based organisations incorporated under
their own acts relating to incorporated not-for-profit entities, such as co-operatives
and associations.
37