GMHBA AnnuAL RepoRt 2010 - GMHBA Health Insurance

1 

GMHBA 

AnnuAL 

RepoRt 

2010

GMHBA Mission 

Supporting the health of our communitieS for generationS 

As a not-for-profit health fund with more than 75 years 

experience, GMHBA has earned a reputation for providing 

value health insurance and excellent customer service. 

providing health insurance to more than 197,000 

Australians, GMHBA offers members peace of mind and 

protection when it counts. GMHBA strives to be a trusted 

partner with our members enabling them to access quality 

private health care. We have a grassroots community focus 

and a proactive approach to health care and health education.

Contents 

GMHBA Performance Snapshot 4 

2009/10 Highlights 5 

Chairman’s Report 6 

Chief Executive’s Report 7 

Board of Directors 8 - 9 

Executive Management Team 10 - 11 

Strategic Intents 12 - 16 

Financial Report 17 - 54 

Directors’ Report 

Independent Audit Declaration 

Corporate Governance Statement 

Statement of comprehensive income for the year ended 30 June 2010 

Statement of financial position as at 30 June 2010 

Statement of changes in equity for the year ended 30 June 2010 

Statement of cash flow for the year ended 30 June 2010 

Notes to the Financial Statement for the year ended 30 June 2010 

Directors’ Declaration for the year ended 30 June 2010 

Independent auditor’s report 

Principal Registered Office, Branch Locations, Affiliations and Agency 

3

peRFoRMAnCe snApsHot 

Benefits paid ($,000) 

16.4% increase 

05 

9.9% 

$104,292 

$52,206 

06 

Reserves ($,000) 

6.4% increase 

05 

06 

$116,692 

9.1% 

$65,545 

07 

07 

$128,685 

9.5% 

$82,002 

08 

08 

Management expense Ratio (%) 

10.7% 

05 

06 

07 

08 

$144,923 

$83,052 

9.6% 

09 

09 

09 

$168,220 

$91,222 

9.6% 

10 

10 

10 

$195,749 

$97,072 

10.7% 

4 

total Assets ($,000) 

7.9% increase 

05 

05 

$93,172 

Memberships 

6.2% increase 

05 

68,679 

$114,181 

06 

06 

06 

$111,107 

70,282 

$134,299 

07 

07 

07 

$133,211 

73,300 

Contribution income ($,000) 

13.3% increase 

$148,709 

08 

08 

08 

$139,800 

77,655 

$164,530 

09 

09 

09 

$152,693 

86,093 

$191,355 

10 

10 

10 

$164,752 

91,468 

$216,897

Source: GMHBA/PHIAC data as at 30 June 2010. 

2009/10 HiGHLiGHts 

GMHBA has again exceeded 

industry membership growth 

05 

6.8% 

1.5% 

06 

2.3% 

2.8% 

5,375 

new memberships 

197,468 

Australian’s covered 

223,033 $27.529 50,101 

phone calls to GMHBA million increase 

in benefits paid 

07 

4.3% 

3.8% 

08 

5.9% 

4.9% 

09 

10.9% 

3.1% 

10 

6.2% 

986,833 $5.850 

ancillary claims paid million operating surplus 

3.0% 

501 1,260 

hospitals contracted newborns 

HoW GMHBA CoMpARes 

GMHBA returns more benefits to 

members than the industry average 

Membership Growth: National annual growth Member Benefits: Based on percentage of contributions 

GMHBA Industry GMHBA Industry 

5 

05 

91 

88 

06 

87 

hospital admissions 

85 

07 

87 

84 

08 

88 

85 

09 

88 

87 

10 

90

It is my pleasure to write this report for the 

2009 – 2010 year. GMHBA Limited achieved a profit 

of $5.850m for the year ended 30 June 2010 and total 

accumulated funds now exceed $97.072m. The result 

was generally satisfactory with a significant 

contribution being obtained from investment income. 

The benefit of increased premiums and significantly 

expanded membership were largely offset by a 

substantial increase in claims. While a better 

underwriting result was anticipated the aim of being 

a not-for-profit mutual was achieved in that we were 

able to pay members’ claims as and when incurred 

while not having to pay income tax and dividends. 

GMHBA now has 91,468 members and provides health 

insurance cover to 197,468 individuals. This represents 

an increase in persons covered of 5.9% for the year. 

When I became a director in September 1998 GMHBA 

had 37,700 members and provided health insurance 

cover to more than 75,000 individuals. The fund had a 

turnover of approximately $50m and total 

accumulated funds were less than $12m. Today 

GMHBA has a turnover of more than $216m. GMHBA 

is Australia’s eighth largest independent health fund 

and its size and substantial net asset situation 

positions it well to continue to provide for future 

claims and other demands. 

Growth in membership has consistently been in 

excess of industry average and this is due to a number 

of factors including the availability of attractive and 

affordable health insurance products, the loyalty of our 

members and the efforts of management and staff to 

provide excellent service. 

It needs to be recognised that GMHBA is part of a very 

competitive industry which exists because of the 

desire by a large number of Australians to play a role 

in providing for their health care, the availability of 

excellent public and private hospitals and the skills of 

the medical and associated professions. Government 

policy is also a critical element to the continued 

success of the industry. 

CHAiRMAn’s RepoRt 

A significant development during the later part 

of the financial year has been the expansion and 

refurbishment of our head office in Geelong. This 

project will see all of our head office staff operating 

from one building with improved staff 

accommodation. 

The success of any organisation depends upon 

leadership. Fortunately the Board provides that and 

management, lead by Mark Valena and his executive 

management team, demonstrate leadership in all they 

do. GMHBA introduced new products during the year 

and innovative ways were found to communicate with 

members. I wish to express my thanks to all of the 

directors, management and staff for their efforts and 

contribution during the year. 

Dr Heather Wellington resigned as a director in July 

2010 after nearly twelve years on the Board. Heather’s 

professional skills and knowledge of the health sector 

significantly contributed to GMHBA’s deliberations and 

progress during that period. 

This is my final report as Chairman and I wish to thank 

everybody for the opportunity to serve GMHBA. When 

I first joined the Board the company’s aim was to 

become one of Australia’s most respected and 

innovative not-for-profit health insurers. GMHBA 

continues to successfully operate as a not-for-profit 

organisation and I believe that GMHBA is recognised 

as being a progressive fund which makes a significant 

contribution to the health insurance industry while 

assisting members access to high quality health care. 

I am very proud of the standing and ability of the 

Board, management and staff. I thank them for their 

efforts and wish to express confidence in them that 

they will continue to work hard to provide appropriate 

and affordable health insurance to our members 

in the future. 

I wish my successor well and I will follow GMHBA’s 

progress with considerable interest in the 

period ahead. 

6

I am pleased to report that in a challenging business 

environment, GMHBA Limited continues to grow and 

succeed in delivering real value to its members. The 

private health insurance sector was not immune to the 

challenges of the world and Australian economies that 

saw increased unemployment, reduced business and 

consumer confidence and volatile investment returns. 

As we know the Australian economy held up better 

than most and importantly to GMHBA the regional 

economies in Geelong and the western districts of 

Victoria held up quite well all things considered. 

The economy, business confidence and consumer 

confidence are recovering albeit there remains room 

for improvement. 

The private health insurance sector also saw 

significant change. In October 2009 Medibank Private 

was converted to a tax and dividend paying entity. 

This means that approximately 71% of the industry 

membership is now in the hands of for-profit entities. 

Far from being a concern to GMHBA, we believe that 

the not-for-profit funds in general and GMHBA 

specifically, can demonstrate a track record of superior 

return to members as compared to the for-profit funds. 

We intend to better communicate this value add so 

that our members and the community understand why 

being not-for-profit matters. 

While the industry continues to grow its membership 

(up 3% in the year to 30 June 2010) the rate of growth 

has slowed significantly due to the aforementioned 

economic conditions and the changes made by 

Government in 2009 to the private health insurance 

rebate thresholds. In response, the major players 

upped their advertising and sponsorship budgets 

significantly and consumers now benefit, at least in 

the short term, by promotional offers. 

Given this environment, the fact that GMHBA achieved 

a growth rate in persons covered (net of persons that 

left the fund during the year) of 5.9% is an 

extraordinary outcome. 

CHieF eXeCutiVe’s RepoRt 

Growth matters because it renews GMHBA each year 

with people of a lower age that have lesser utilization 

of hospital services. The surplus from new members is 

used to the benefit of all. 

From a financial perspective the 2009/10 year saw 

contributions revenue exceed budget. On the other 

hand, we experienced a couple of months with much 

higher than expected claims and that unexpected cost 

combined with some necessary expenditure on 

business development, saw us report a small 

operating loss. With investment income, we reported 

an overall profit of $5.850m. 

While we are taking action to ensure that we maintain 

a stable operating margin into the future, we will not 

seek to make the sort of margins that the for-profitfunds 

must do to provide return to the shareholders. 

We will always keep our eye on ensuring our members 

receive real value for money. 

GMHBA has been independently recognized during 

the year for its continued high levels of member 

satisfaction and positive word of mouth referral. These 

service levels happen only through the dedication, 

responsiveness and genuine friendliness of our staff 

and I thank them for their efforts. 

The next twelve months will see us continuing to grow 

strongly through further innovation in finding new 

ways to reach prospects without having to match what 

we believe are the wasteful significant advertising and 

sponsorship spends of our major competitors. 

We will not lose sight on service and intend to invest 

in technology and processes that provide quality 

service in ever more efficient ways. 

We know that while growth is important so is ensuring 

that we continue to connect to and invest in our 

heartland of Geelong and our other home markets. 

While operating nationally, we have been based in 

Geelong for more than 75 years and we intend to take 

wide ranging and meaningful actions so that we continue 

to be recognized as being “your own health fund”. 

7

BoARD oF DiReCtoRs 

Michael J. Dowling Heather L. Wellington Kenneth e. Jarvis sue Renkin 

gmhBa’s Board of Directors is experienced, with 

longstanding members who understand the business 

of health insurance. gmhBa has displayed industry leadership 

in the important area of diversity of Board appointments, 

and as a result we have a Board with a broad range of skills, 

knowledge and experience. the varied background of the 

directors, which includes medical, legal, academic, financial 

and business expertise obtained in a variety of commercial 

and community settings, means the Board has the abillity 

to govern gmhBa in the best interest of its members. 

8

professor John C. Catford James e. Walsh 

MiCHAeL J. DoWLinG 

KSJ, B.Ec., FCA, SFCDA, Dip CD. 

Chairman since 2001 

Director since 1998 

Chairman Nomination & 

Remuneration Committee 

Member Strategy Committee 

Chartered Accountant 

Director - Dowling Corporate 

Consulting Pty Ltd 

HeAtHeR L. WeLLinGton 

MBBS, B. Med. Sci., 

BHA, FRACMA, LLB, FAICD. 

Resigned July 2010 

Member Health Services Committee 

Member Nomination & 

Remuneration Committee 

Lawyer 

Medical Practitioner 

Director - HPA Consulting Pty Ltd 

Chairman - IPG Ltd 

Consultant - DLA Phillips Fox Lawyers 

KennetH e. JARVis 

OAM, KSJ, B App. Sc (Hons), 

Dip OR. 


Member Audit & Compliance Committee 


Executive Chairman - Aerolite Quarries Pty Ltd 

Executive Chairman - Jakape Pty Ltd 

Executive Chairman - Zambelli RWP Pty Ltd 

Director - Aviation Australia Development Ltd 

sue RenKin 

RN, MBA, MAICD, FCDA. 


Member Nomination & Remuneration 

Committee 

Chief Executive - Open Family Australia 

Managing Director - intuitively focussed p/l 

Chairman - Monash Centre for Green 

Chemicals Future 

Chairman - Clayton Bio Medical Imaging 

Laboratories 

Chairman - Southern Metropolitan 

Cemeteries Trust 

Director - General Practice (VIC) 

Director - Northern Health 

pRoFessoR JoHn C. CAtFoRD 

MA MSc MB BChir DM DCH FFPH FRCP 

FAFPHM FIPAA FAICD. 


Dean of the Faculty of Health, Medicine, 

Nursing and Behavioural Sciences 

and Professor of Health Development, 

Deakin University 

Chair, Postgraduate Medical Council 

of Victoria 

Editor-in-Chief, Journal Health Promotion 

International Oxford University Press 

Adjunct Professor in the Faculty of 

Medicine, Nursing and Health Sciences 

at Monash University 

Chair, Youth Substance Abuse Service 

Chair Kinect Australia (incorporating 

VicFit in Victoria) 

Director, Diabetes Australia (Victoria) 

Director, Research Australia 

Governor, Windermere Foundation 

Governor, Epworth Foundation. 

9 

Russell H. elliott Gerald Miller 

MARK W. siBRee 

BSc (Hons), MBA, MACS, FAICD. 

Resigned September 2009 

Chairman Strategy Committee 

Member Investment Committee 

Trustee of CEDA 

Corporate Strategy Advisor 

Executive Director - Mutual 

Strategies Pty Ltd 

JAMes e. WALsH 

B.Com, MBA, FCA, MAICD. 


Chairman Audit & Compliance Committee 

Member Nomination & Remuneration 

Committee 



Director - Godfrey Hirst Australia Pty Ltd 

President - The Geelong Chamber of 

Commerce 

RusseLL H. eLLiott 

B.Sc., M. Ed., MAICD. 


Chairman Investment Committee 

University Consultant 

Executive Director - Russell Elliott and 

Associates Pty Ltd 

Key Associate - Phillips KPA Pty Ltd 

GeRALD MiLLeR 

BA, LLB. GAICD. 




Lawyer 

Director - Maryville Aged Care Inc. 

Director - The Geelong College Ltd

eXeCutiVe MAnAGeMent teAM 

Mark Valena Michael Carroll Jacqueline Armitage 

gmhBa’s executive management team has a history 

of success, and an ability to deliver quality membership 

growth, strong financial performance, markedly enhanced 

operational capacity and excellence in customer 

service. the management team has the experience to 

successfully integrate and understand the issues relating 

to products, customer service, human resources, 

processes and procedures. 

10

MARK VALenA – CHieF eXeCutiVe 

Mark Valena is an experienced Business 

Executive. He came to the helm at 

GMHBA in early 2008 following seven 

years as the CEO of Medical Defence 

Association Victoria. MDAV was Victoria’s 

largest medical professional indemnity 

insurer (with an 18% national market 

share) and as a not-for- profit 

organisation, in a highly regulated 

insurance market operating in the health 

sector, provided a sound experience base 

for his current role at GMHBA. Mark has 

significant experience in the negotiation 

and implementation of mergers and 

business transitions at MDAV, NRMA and 

Fortis Insurance. Through these 

transitions Mark was able to create an 

environment of goodwill and navigate 

through many complex agendas leading 

to retention of members and employees. 

Mark is an Australian Chartered 

Accountant who has a Bachelor of 

Business and a Graduate Certificate in 

Innovation & Service Management. 

James Arnott tim Boyd 

MiCHAeL CARRoLL – FinAnCe 

Michael Carroll is an experienced Finance 

Executive. He is responsible for the 

Finance Division including supervision of 

the Company’s Investments. His role at 

GMHBA also incorporates that of 

company Secretariat, with compliance as 

another major responsibility. Michael is 

accredited with a Bachelor of Business 

(Accounting) from Swinburne University, 

he is a Certified Practicing Accountant, 

has completed his MBA at Deakin 

University in 2004 and in 2007 completed 

a Graduate Diploma in Applied 

Corporate Governance with Chartered 

Secretaries Australia. 

JACqueLine ARMitAGe – MeMBeR 

seRViCes 

Jacqueline is a professional Customer 

Service Executive with over 30 years 

Australian and Asian experience and a 

proven track record in managing multisite 

operations for ‘blue chip’ 

organisations. Jacqueline’s success in her 

field is attributed to her ability to develop 

both strategic and tactical solutions to 

improve quality, productivity and 

customer satisfaction. This ensures 

customers’ expectations are consistently 

met and often exceeded. 

11 

JAMes ARnott – BeneFits 

MAnAGeMent 

James Arnott is a Business Executive with 

over 20 years experience. His business unit 

is responsible for Health Services, Claims 

Audit, Product Development and 

Marketing. James previously worked with 

Caulfield General Medical Centre and The 

Alfred Hospital for over 13 years where he 

was responsible for a diverse group of 

services. James has a Diploma of Applied 

Science from Lincoln Institute of Health 

Sciences, a Bachelor of Prosthetics and 

Orthotics from LaTrobe University, and an 

MBA from the University of NSW. James is 

also a member of the Executive Committee 

of the G21 Health and Wellbeing Pillar. 

tiM BoyD – HuMAn ResouRCes 

Tim is a Human Resource practitioner with 

over 17 years experience in HR generalist 

roles and has specialist skills in Learning 

and Development and Organisational 

Development functions. Tim has had a long 

career in Automotive Development with a 

large multi-national manufacturer in roles 

ranging from HR consultancy, Learning and 

Organisational Development and 

international experience in the Asia Pacific 

region. Tim’s experience in Asia Pacific has 

developed an ability to understand 

organisational cultures and build 

relationships based on trust and respect. 

Tim currently manages the Human 

Resources team at GMHBA providing a 

comprehensive range of HR services 

to the organisation.

FinAnCiALLy stRonG 

to proviDe SuStainaBle premiumS to our memBerS 

As a not-for-profit organisation, we seek to keep our 

expenses low, and maintain margins which are just 

enough to ensure our long term success. This is 

good for our members, because it ultimately means 

lower prices. 

During this past financial year the organisation has 

invested heavily in our future. We have committed 

funds to – Frank Health Insurance, business 

development, and exploring other opportunities aimed 

at providing profitable growth for years to come. 

New member growth means that GMHBA can keep 

premiums as low as possible for all of our members, 

new and old. 

sales growth 

GMHBA remains one of the fastest growing health 

funds in Australia. During the past financial year the 

fund grew in memberships by 6.2%, compared to 

total industry growth of 3%. 

Aided by strong customer retention, advocacy and 

distribution relationships, GMHBA has been able to 

make these gains without being dependent upon 

multimillion dollar advertising campaigns. 

During the past year, we also developed an 

enhanced understanding of our customer and 

product profitability. This helps us to match the 

‘right’ customers with the ‘right’ products, and refine 

our product portfolio. 

investment strategy & cash management 

Due to the uncertainty in the business environment 

globally, GMHBA adopted a conservative investment 

strategy - which was reviewed quarterly – where we 

decided not to participate in equity markets. 

From a cash management perspective, we have a 

“portfolio” of term deposits, with staggered maturity 

dates, at entities rated A- or higher. 

Claims audit & analysis 

Expert people and strong systems identified errors 

in claims made by members, hospitals and ancillary 

providers. The outcome was savings of more than 

$1m. In turn, these savings have a direct impact on 

GMHBA’s ability to keep premiums down. 

12

CoMMunity ConneCteD 

to Develop mutually Beneficial relationShipS with communitieS 

GMHBA seeks to be an integral part of any community 

that we’re involved with, and aims to be the most 

recommended health fund in our communities. 

The way we define our communities encompasses 

not just geographical locations like our traditional 

‘home markets’ of Geelong, Ballarat, Bendigo, Colac, 

Warrnambool, Portland and Hamilton, but our entire 

membership base, no matter where they live, and 

our staff. 

To be truly connected we need to develop mutually 

beneficial relationships. Initiatives to build these 

relationships include: 

• A partnership with the Bendigo Bank Community 

Enterprises where we help fund worthwhile health 

and wellbeing projects such as health seminars in 

Bannockburn and the Men’s Shed in Torquay 

• A Community Benefits Program - where we make 

donations for health insurance sales made “in the 

name” of selected not-for-profit organisations 

• Having a GMHBA staff member work with United 

Way – an organisation that seeks to improve lives 

and create positive, long term social change 

- as a part of their “Loaned Executive Program” 

• Employee volunteering through BacLinks (which 

links business and the community). GMHBA has 

also been involved with BacLinks in the Workplace 

Big Day Out, which brings people with disabilities 

from various agencies and workplace volunteers 

together for fun activities. 

• An environmental initiative donating trees and 

employee time to plant more than 700 trees with 

primary school children. 

Member wellness 

• GMHBA has been promoting a bowel cancer 

screening program to its members, so far 3,350 

members have been tested. 

• In partnership with the Baker IDI Heart & Diabetes 

Institute, GMHBA members with a history of 

cardiovascular disease or diabetes, were offered 

the opportunity to participate in Baker IDI’s chronic 

disease management programs. The programs 

were designed to ensure people were getting the 

best possible care and management to reduce 

future risk. 

staff wellness 

The public face of GMHBA is our 136 staff so a healthy 

and motivated workforce is vital. In addition to a 

culture and policies which promote wellbeing, team 

activities combining group participation and 

fundraising for worthwhile causes have been common. 

some examples during the year... 

• October 2009 – United Way’s Corporate Head of 

the River rowing regatta – the quality of the rowing 

was nowhere near as high as the schools’ version 

but a lot of fun. 

• March 2010 - The 520km Murray to Moyne team 

relay charity bike ride. GMHBA’s team raised $12,000 

for the St John of God Foundation’s Special Care 

Nursery Appeal and Colac Area Health. 

• May 2010 – The Mothers Day Classic run/walk. The 

entire event raised more than $2.1m for breast 

cancer research. 

13

tRusteD pARtneR 

a Better way of Service that iS noticeaBly Different 

There’s an obvious relationship between our 

‘Community Connected’ strategic intent and our desire 

to be a ‘Trusted Partner’. 

At GMHBA, we’re not like other health funds. We don’t 

wish to just have a transactional relationship with 

‘customers’, but become a trusted partner with our 

‘members’ and staff as a part of the same community. 

Our wish is to provide member value, not shareholder 

value. This trusted partner intent shapes the way 

we do business. 

It means that we focus on delivering both great value 

health insurance and outstanding service. 

Stringent service standards, the ability to connect 

immediately to a customer service advisor rather than 

navigating through automated call centre technology, 

and the option of face-to-face contact at one of our 12 

branches contributes to highly satisfied members (and 

staff) who stay with us and recommend us to others. 

Our regular customer satisfaction surveys indicate that 

GMHBA has highly satisfied members. On a scale 

where a “7” is the maximum, GMHBA averages 

between 6.1 and 6.5. 

While a major syndicated research study, “Health Care 

& Insurance – Australia 2009” conducted by research 

firm Ipsos Australia, revealed that GMHBA is the 

major, non-restricted health fund, most recommended 

by its members. No health fund open to the general 

public, with at least 75,000 members, rated higher. 1 

1 The sample size for GMHBA was 137 members 

The study asked those with health insurance whether 

they would recommend their health fund to friends 

and colleagues. Across the industry, less than half 

(48%) would, whereas 66% of GMHBA’s members 

would recommend it. 

Our actual experience supports the survey’s findings, 

with this advocacy, or positive word of mouth, a key 

driver of GMHBA’s ongoing success. 

staff satisfaction 

We believe that GMHBA has employees that are proud 

to work at GMHBA. We judge this primarily through 

our member satisfaction; we believe it is only possible 

to have highly satisfied members when employees are 

committed to that cause. 

Naturally, both members and staff satisfaction are 

closely linked. GMHBA has introduced and continues 

to refine a staff merit payment program, designed to 

reward performance in achievement of individual key 

performance indicators and a proportion of the merit 

program is linked to demonstration of GMHBA’s 

Values and Behaviours. 

This program directly rewards staff for contributing to 

the overall success of GMHBA and has proven to be 

very successful. 

14

suCCess tHRouGH innoVAtion 

to innovate for Differentiation anD growth 

The two most visible illustrations of GMHBA’s 

innovation this year – both aimed at attracting more 

new members to the fund, so that we can keep our 

premiums as affordable as possible for all our 

members – were: 

the launch of Frank Health insurance 

Few people who buy health insurance find the process 

easy. Many who start the process, find it too hard, and 

don’t buy it from anyone. 

In response to this insight, in October 2009 GMHBA 

launched Frank Health Insurance. Frank is a low cost, 

online offering that makes health insurance less 

confusing and complex. It does so through a simplified 

product range – hospital insurance is Best, Better or 

Basic; and Some or Lots of Extras with 50% or 80-% 

back - the use of straight talking language instead of 

jargon, and by stream lined processes. 

The proportion of people switching from other health 

insurers is testimony to how well Frank is meeting the 

needs of the market. 

the introduction of our premium product range 

In April 2010, we introduced our premium hospital 

range and platinum extras product. 

While GMHBA is renowned for its affordable, quality 

health insurance and our “simply great value” 

positioning, there are customers who want the best in 

life, including health insurance. At the same time, 

these people want a good “deal”. 

So, true to our value positioning, we developed a 

range that are big on benefits, not on price. 

15

enABLinG CApABiLity 

to align capaBility So aS to effectively execute Strategy 

Enabling capability underpins the delivery of the other 

strategic intents; focusing on delivery through 

technology and developing employees. To ensure 

GMHBA can deliver on strategy, we must have the 

relevant tools and employees with the right skills, 

combined to be effective. 

performance Management 

The focus on improving performance has centred on 

our leadership and cultural change initiatives. Over the 

last financial year our aim has been to create a high 

performance culture and leadership capable of 

delivering our strategic plan. We have had a sustained 

effort across GMHBA to also ensure the leadership 

team and culture is capable of anticipating and 

adjusting to changes in the environment as they occur. 

Some of the projects or initiatives in support of 

leadership development and cultural change 

have been: 

• Development of our new values and behaviours 

• Leading team’s leadership development program 

• Multifactor Leadership Questionnaire MLQ 360 

degree feedback program 

• Open communication from CEO directly to 

employees through all staff briefing sessions 

• Development of new performance management 

practices and model 

• Merit payment system linked to achievement of 

KPI’s and demonstration of values and behaviours 

• Cross functional project teams 

Head office Building Redevelopment 

This financial year has seen a significant 

redevelopment and refurbishment of our head office 

building. Over the last few years a proportion of head 

office staff has been working out of two separate 

office locations. 

This factor along with the continued growth in 

employee numbers to support our members has 

meant we had outgrown our current offices. GMHBA 

has acquired the two adjacent properties which are 

being redeveloped and integrated with the existing 

head office building. These new offices will allow all 

staff to be located on one site in modern office 

environment. The new building will meet GMHBA’s 

needs for the foreseeable future and represents a 

significant investment in the Geelong community. 

GMHBA enterprise Agreement 

A key element of our relationship with employees 

is the terms and conditions of their employment. 

The majority of our team are covered by an enterprise 

agreement which was successfully renegotiated 

in 2010. 

A representative team from across the business 

came together to work through the process of 

determining outcomes which were in the best interest 

of employees, the business and our members. The 

negotiations were successful in achieving this 

outcome and the new three year agreement was 

resoundingly endorsed by our employees. 

16

GMHBA Limited 

ABN 98 004 417 092 

Financial Report 

For the year ended 30 June 2010 

17 

17

GMHBA Limited ABN 98 004 417 092 


CONTENTS 

18 

PAGE 

Members of the Board of Directors 19 

Directors’ Report 20 – 21 

Lead Auditor’s Independence Declaration 22 

Corporate Governance Statement 23 – 24 

Statement of comprehensive income for the year ended 30 June 2010 25 

Statement of financial position as at 30 June 2010 26 

Statement of changes in equity for the year ended 30 June 2010 27 

Statement of cash flow for the year ended 30 June 2010 28 

Notes to the Financial Statements for the year ended 30 June 2010 29 – 50 

Directors’ Declaration for the year ended 30 June 2010 51 

Independent auditor’s report 52 – 53 

Principal Registered Office, Branch Locations, Affiliations and Agency 54 

18



Members of the Board of Directors 

The directors of the Company at any time during or since the end of the financial year were: 

Michael J. Dowling, KSJ, B.Ec., FCA, SFCDA, Dip CD. 

Chairman since 2001 


Chairman Nomination & Remuneration Committee 



Director – Dowling Corporate Consulting Pty Ltd 

Heather L. Wellington, MBBS, B. Med. Sci., 

BHA, FRACMA, LLB, FAICD. 

Resigned July 2010 

Member Health Services Committee 

Lawyer 

Medical Practitioner 

Director – HPA Consulting Pty Ltd 

Chairman – IPG Ltd 

Consultant – DLA Phillips Fox Lawyers 

Kenneth E. Jarvis, OAM, KSJ, B App. Sc (Hons), 

Dip OR. 




Executive Chairman – Aerolite Quarries Pty Ltd 

Executive Chairman – Jakape Pty Ltd 

Executive Chairman – Zambelli RWP Pty Ltd 

Director – Aviation Australia Development Ltd 

Sue Renkin, RN, MBA, MAICD, FCDA. 


Member Nomination & Remuneration Committee 

Chief Executive – Open Family Australia 

Managing Director – intuitively focussed p/l 

Chairman – Monash Centre for Green Chemicals Future 

Chairman – Clayton Bio Medical Imaging Laboratories 

Chairman –Southern Metropolitan Cemeteries Trust 

Director – General Practice (VIC) 

Director – Northern Health 

Professor John C. Catford, MA MSc MB BChir DM DCH 

FFPH FRCP FAFPHM FIPAA FAICD. 


Dean of the Faculty of Health, Medicine, Nursing and 

Behavioural Sciences and Professor of Health 

Development, Deakin University 

Chair – Postgraduate Medical Council of Victoria 

Editor-in-Chief, Journal Health Promotion International 

Oxford University Press 

Adjunct Professor in the Faculty of Medicine, Nursing and 

Health Sciences at Monash University 

Chair – Youth Substance Abuse Service 

Chair – Kinect Australia (incorporating VicFit in Victoria) 

Director – Diabetes Australia (Victoria) 

Director – Research Australia 

Governor – Windermere Foundation 

Governor – Epworth Foundation 

19 

19 

Mark W. Sibree, BSc (Hons), MBA, MACS, FAICD. 

Resigned September 2009 

Chairman Strategy Committee 


Trustee of CEDA 

Corporate Strategy Advisor 

Executive Director – Mutual Strategies Pty Ltd 

James E. Walsh, B.Com, MBA, FCA, MAICD. 


Chairman Audit & Compliance Committee 

Member Nomination & Remuneration Committee 



Director – Godfrey Hirst Australia Pty Ltd 

President – The Geelong Chamber of Commerce 

Russell H. Elliott, B.Sc., M. Ed., MAICD. 


Chairman Investment Committee 

University Consultant 

Executive Director – Russell Elliott and Associates Pty Ltd 

Key Associate – Phillips KPA Pty Ltd 

Gerald Miller, BA, LLB. GAICD. 




Lawyer 

Director – Maryville Aged Care Inc. 

Director – The Geelong College Ltd 

CHIEF EXECUTIVE: 

Mark Valena, BBus (Acc), CA, MAICD. 

EXECUTIVE MANAGER FINANCE & COMPANY 

SECRETARY: 

Michael Carroll, BBus (Acc), CPA, MBA, FCIS. 

AUDITORS: 

KPMG 

147 Collins Street 

Melbourne Victoria 3000 

BANKERS: 

Commonwealth Bank of Australia 

Cnr Moorabool & Malop Streets 

Geelong Victoria 3220 

APPOINTED ACTUARY: 

Michael Howard, FFA, FIAA, MBA, FAICD



Directors’ Report 

The Directors submit their report on the financial statements of GMHBA Limited (Company) for the 

year ended 30 June 2010, made out in accordance with a resolution of the Directors. 

Directors 

The Directors of the Company at the date of this report are: 

Michael Joseph Dowling 

John Charles Catford 

Russell Henry Elliott 

Kenneth Edward Jarvis 

Gerald Miller 

Sue Renkin 

James Edmund Walsh 

The qualifications, expertise and special responsibilities of Directors are set out on page 19 of the 

financial report. 

Principal Activities 

The principal activity of the Company for the financial year ended 30 June 2010 was the provision 

of benefits against claims by Fund members relating to hospital, dental and paramedical services. 

The Company, being not for profit, does not earn taxable income and is therefore not subject to 

income taxation. Refer Note 1(u). The profit for the year was $5.850million (2009: $7.960million). 

Review of Operations 

A review of the operations and results of the Company during the financial year are set out in the 

Chairman’s Report on page 6. 

Significant Changes in the State of Affairs 

There were no significant changes in the state of affairs of the Company. 

Matters Subsequent to the End of the Financial Year 

There were no post-balance date events of any significance affecting or which may affect: 

(a) the operations of the Company; 

(b) the results of these operations; or 

(c) the state affairs of the Company in financial years subsequent to this financial year. 

Environmental Regulations 

The Company is not subject to any significant environmental regulation. 

Information on Directors 

All Directors are Fund members of the Company. No Director has received any benefit since the 

end of the previous financial year, by reason of any contract with the Company or with a firm of 

which he or she is a member or with a company in which the Director has a substantial interest, 

with the exception of the Director benefits that may be deemed to have arisen in relation to the 

following transactions entered into in the ordinary course of business: 

- As Fund members of the health fund conducted by the Company. 

20 

20


21



Corporate Governance Statement for the year ended 30 June 2010 

The Board of GMHBA Limited has a governance framework to ensure that the Board complies with 

the relevant requirements of the Corporations Act 2001, the Company’s Constitution, the Private 

Health Insurance Act 2007 and Associated Rules and embodies relevant corporate governance 

best practice. 

The Company is committed to achieving the highest practicable standards of corporate 

governance. This statement provides an overview of the main corporate governance practices that 

were in place throughout the financial year. 

Code of conduct 

The code of conduct has been established as the basis for ethical and professional conduct 

necessary to meet the expectation of Fund members and other stakeholders. As these 

expectations will change over time, the code is subject to regular review. 

The main purpose of a code of conduct is to provide a common understanding of the Company’s 

expectations in regard to ethical and professional conduct and to assist Directors in discharging 

their obligations. Achieving this objective will also deliver other benefits to the Company. 

Conflict of interest 

Subject to the provisions of the Corporations Act and the Company’s Constitution, the Board is 

empowered to regulate its meetings and proceedings, including the processes it will apply in 

instances of a declared, actual or perceived conflict of interest. 

Board Committees 

The Board Committees in operation throughout the year were: 

Audit & Compliance Committee 

The role of the Committee is to oversee the establishment and maintenance of a framework of 

internal control, to monitor the audit and actuarial function ensuring regulatory compliance and 

advise on appropriate ethical standards for the management of the Company. This enables the 

committee to give the Board additional assurance regarding the quality and reliability of financial 

information prepared for use by the Board in determining policies or for inclusion in financial 

reports. 

Nomination & Remuneration Committee 

The role of the Committee is to assist the Board of Directors in fulfilling its responsibilities for 

determining and reviewing compensation arrangements for Directors and senior management, 

succession planning and the appointment and removal of Directors. 

Investment Committee 

The role of the Committee is to advise on the Company’s total investment portfolio, managed both 

internally and externally. 

Strategy Committee 

The role of the Committee is to assist the Board of Directors in identifying and establishing 

GMHBA’s future strategic direction in line with the Company’s Mission and Vision statements. 

Health Services Committee 

The role of the Committee is to assist the Board of Directors in fulfilling their responsibilities in 

relation to ensuring that all health services initiatives comply with the Company’s mission, 

specifically working as a trusted partner to improve Fund members’ health. 

23 

23



Corporate Governance Statement for the year ended 30 June 2010 (continued) 

Internal control framework 

The Board acknowledges that it is responsible for the overall internal control framework, but 

recognises that no cost effective internal control system will preclude all errors and irregularities. 

To assist in discharging this responsibility, the Board has instigated an internal control framework 

that can be described under four headings: 

• Effectiveness and efficiency of operations 

• Reliability of reporting 

• Compliance with applicable laws & regulations 

• Code of conduct 

Internal audit function 

The internal audit function assists the Board in ensuring compliance with these internal controls. 

The Audit & Compliance Committee is responsible for approving the program of internal audit to be 

conducted each financial year and for the scope of the work to be performed. The internal audit 

function, while operationally reporting to the Chief Executive, also reports to the Audit & 

Compliance Committee. The Committee meets with the internal auditor on a regular basis. 

Business risk management 

The Audit & Compliance Committee provides advice to the Board and reports on the status of 

business risks to the Company through an integrated risk management plan aimed at ensuring 

risks are identified, assessed and appropriately managed. 

The risk management process involves ensuring: 

• Strategic, operational and financial risks are identified 

• The systems are in place to monitor and manage the risks 

• Reporting systems are in place 

• The risk management systems are operating effectively 

• Compliance with relevant legislation 

• Compliance with the code of ethical conduct 

A comprehensive insurance program provides protection against major risk exposures that cannot 

be eliminated by appropriate risk management practices. 

24 

24



Statement of comprehensive income for the year ended 30 June 2010 

Revenue from operating activities 

25 

NOTE 2010 

$’000 

2009 

$’000 

Premium income 216,897 191,355 

Total revenue from operating activities 216,897 191,355 

Expenses from operating activities 

Benefits paid to fund members 9 (188,487 ) (160,814) 

Payments to Health Benefits Reinsurance Trust Fund (7,262 ) (7,406) 

Total cost of fund benefits (195,749 ) (168,220) 

Gross underwriting result 21,148 23,135 

Management expenses 

Employee benefits expenses (9,471 ) (8,459) 

Depreciation (577 ) (497) 

Other management expenses (11,784 ) (9,350) 

Total management expenses (21,832) (18,306) 

Net underwriting result (684 ) 4,829 

Revenue from outside the operating activities 

Investment income 6,550 7,892 

Investment unrealised gains/(losses) (82 ) 397 

Investment realised losses - (5,207) 

Other income 66 49 

Total Revenue/(Expenses) from outside the operating 

activities 6,534 3,131 

Profit for the period 2 5,850 7,960 

Other comprehensive income 

Revaluation of property, plant and equipment - 210 

Total comprehensive income for the period 5,850 8,170 

Profit attributable to: 

The Company 5,850 7,960 

Profit for the period 5,850 7,960 

Total comprehensive income attributable to: 

The Company - 210 

Total comprehensive income for the period 5,850 8,170 

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 

25




Statement 

Statement 

of 

of 

financial 

financial 

position 

position 

as 

as 

at 

at 

30 

30 

June 

June 

2010 


Current 

Current 

assets 

assets 

NOTE 

NOTE 



$’000 

$’000 

2009 

2009 

$’000 

$’000 

Cash 

Cash 

and 

and 

cash 

cash 

equivalents 

equivalents 

Trade 

Trade 

and 

and 

other 

other 

receivables 

receivables 

Financial 

Financial 

assets 

assets 

Other 

Other 

assets 

assets 

Total 

Total 

current 

current 

assets 

assets 

3 

4 

5 

6 

4,816 

4,816 

11,245 

11,245 

141,933 

141,933 

157 

157 

158,151 

158,151 

7,472 

7,472 

9,654 

9,654 

126,117 

126,117 

81 

81 

143,324 

143,324 

Non-current 

Non-current 

assets 

assets 

Financial 

Financial 

assets 

assets 

Property, 

Property, 

plant 

plant 

and 

and 

equipment 

equipment 

Total 

Total 

non-current 

non-current 

assets 

assets 

5 

7 

- 

6,601 

6,601 

6,601 

6,601 

4,011 

4,011 

5,358 

5,358 

9,369 

9,369 

Total 

Total 

assets 

assets 

164,752 

164,752 

152,693 

152,693 

Current 

Current 

liabilities 

liabilities 

Trade 

Trade 

and 

and 

other 

other 

payables 

payables 

Provisions 

Provisions 

Other 

Other 

liabilities 

liabilities 

Total 

Total 

current 

current 

liabilities 

liabilities 

Non-current 

Non-current 

liabilities 

liabilities 

8 

9 

10 

10 

6,424 

6,424 

30,834 

30,834 

30,293 

30,293 

67,551 

67,551 

3,191 

3,191 

30,085 

30,085 

28,092 

28,092 

61,368 

61,368 

Provisions 

Provisions 

Total 

Total 

non-current 

non-current 

liabilities 

liabilities 

9 

129 

129 

129 

129 

103 

103 

103 

103 

Total 

Total 

liabilities 

liabilities 

67,680 

67,680 

61,471 

61,471 

Net 

Net 

assets 

assets 

97,072 

97,072 

91,222 

91,222 

Equity 

Equity 

Retained 

Retained 

earnings 

earnings 

Asset 

Asset 

revaluation 

revaluation 

reserve 

reserve 

96,125 

96,125 

947 

947 

90,275 

90,275 

947 

947 

Total 

Total 

equity 

equity 

97,072 

97,072 

91,222 

91,222 

The above Statement of Financial Position should be read in conjunction with the accompanying notes. 

The above Statement of Financial Position should be read in conjunction with the accompanying notes. 

26 

26 

26



Statement of changes in equity for the year ended 30 June 2010 

27 

Retained 

Earnings 

Asset 

Revaluation 

Reserve Total 

$’000 $’000 $’000 

Balance at 1 July 2008 82,315 737 83,052 

Total comprehensive income for the period 

Profit 7,960 - 7,960 

Other comprehensive income 

Revaluation Increment - 210 210 

Total other comprehensive income - 210 210 

Total comprehensive income for the period 7,960 210 8,170 

Balance at 30 June 2009 90,275 947 91,222 

Balance at 1 July 2009 90,275 947 91,222 

Total comprehensive income for the period 

Profit 5,850 - 5,850 

Total comprehensive income for the period 5,850 - 5,850 

Balance at 30 June 2010 96,125 947 97,072 

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. 

27



Statement of cash flows for the year ended 30 June 2010 

Cash flows from operating activities 

28 

NOTE 2010 

$’000 

2009 

$’000 

Premium receipts 218,257 194,071 

Investment interest 5,721 8,323 

Investment distributions - (5,207) 

Other (payments)/receipts 145 (24) 

Benefits paid (194,024) (167,477) 

Management expenses (19,036) (17,982) 

Net cash provided by operating activities 11(a) 11,063 11,704 

Cash flows from investing activities 

Purchase of investment securities (11,887) (7,049) 

Purchase of property, plant and equipment (1,841) (752) 

Proceeds from sale of property, plant and equipment 9 - 

Net cash used in investing activities (13,719) (7,801) 

Net (decrease)/increase in cash held (2,656) 3,903 

Cash and cash equivalents at beginning of the financial year 7,472 3,569 

Cash and cash equivalents at end of the financial year 11(b) 4,816 7,472 

The above Cash Flow Statement should be read in conjunction with the accompanying notes. 

28



Notes to the Financial Statements for the year ended 30 June 2010 

1. Summary of significant accounting policies 

GMHBA Limited is a not for profit company, incorporated and domiciled in Australia. Its 

registered office is 60-68 Moorabool Street, Geelong, Victoria, 3220. 

(a) Statement of compliance 

The Company’s financial statements are a general purpose financial report prepared in 

accordance with the requirements of the Corporations Act 2001 and the Australian 

Accounting Standards (AASBs) (including Australian Interpretations) adopted by the 

Australian Accounting Standards Board (AASB). 

The Company’s financial statements were authorised for issue on 31 August 2010 by the 

GMHBA Limited Board. 

(b) Basis of measurement 

The accounting policies adopted in the preparation of this financial report have been applied 

consistently by the Company and are the same as those applied for the previous reporting 

period unless otherwise noted. The Company’s financial statements were prepared in 

accordance with the historical costs convention, except for the following: 

• Financial instruments are measured at fair value through the income statement 

• Land and Buildings are recorded at fair value with movements in value taken to an asset 

revaluation reserve 

• Connect Rewards benefit provision is carried at present value 

The presentation currency used for the preparation of these financial statements is Australian 

dollars. 

(c) Australian Accounting Standards issued but not yet effective 

The following standards, amendments to standards and interpretations have been identified 

as those which may impact the entity in the period of initial application that are available for 

early adoption at 30 June 2010, but have not been applied in preparing this financial report: 

AASB 

amendment 

AASB 2009-5 

Further 

Amendments to 

Australian 

Accounting 

Standards 

arising from the 

Annual 

Improvements 

Process 

Nature of change 

to accounting policy 

This Standard affects various AASBs resulting in 

minor changes for presentation, disclosure, 

recognition and measurement purposes. The 

amendments are not expected to have a 

significant impact on the financial statements. 

29 

29 

Application date 

of standard 

Application 

date for 


1 January 2010 30 June 2011



Notes to the Financial Statements for the year ended 30 June 2010 

1. Summary of significant accounting policies 

AASB 

amendment 

AASB 124 – 

Related party 

disclosures. 

2010 Annual 

Improvements 

Nature of change 

to accounting policy 

Revised AASB 124 replaces the incumbent AASB 

124. The main change is the amendment to the 

definition of a ‘related party’. 

Further amendments made to six standards. In 

particular, terminology used in respect of the 

values of awards and award credits in a customer 

loyalty program is amended. IFRIC 13 as 

amended states that the fair value of award 

credits takes into account the amount of 

discounts or incentives that otherwise would be 

offered to customers that have not earned the 

award credits. 

30 

Application date 

of standard 

Application 

date for 


1 January 2011 30 June 2012 

Various application 

dates 

(d) Changes in accounting policies 

There were a number of Australian Accounting Standards and Interpretations, applicable for 

the current reporting period. Adopting some of these standards and interpretations resulted 

in changes in accounting policies. However, none of these changes have a material financial 

impact on the Company. 

The adoption of the revised AASB101 Presentation of Financial Statements impacted the 

financial report disclosure for the current reporting period. The adopted standard requires 

the presentation of a statement of comprehensive income by amalgamating the previously 

disclosed income statement and statement of recognised income and expense. 

The issuance of AASB 2009-2 Amendments to Australian Accounting Standards Improving 

Disclosures about Financial Instruments requires changes to the disclosures in relation to 

assets measured at fair value, by using a fair value hierarchy. 

30



Notes to the Financial Statements for the year ended 30 June 2010 (continued) 

1. Summary of significant accounting policies (continued) 

(e) Use of estimates and judgements 

The preparation of financial statements requires management to make judgements, 

estimates and assumptions that affect the application of accounting policies and the reported 

amounts of assets, liabilities, income and expenses. Actual results may differ from these 

estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. 

Revisions to accounting estimates are recognised in the period in which the estimate is 

revised and in any future periods affected. 

In particular, information about significant areas of estimation uncertainty and critical 

judgements in applying accounting policies that have the most significant effect on the 

amount recognised in the financial statements are described in the following notes: 

Claims outstanding, see note 1(n) 

Liability Adequacy Test, see note 1(o) 

Connect Reward benefits, see note 1(p) 

Deferred Acquisition Costs, see note 1(q) 

(f) Determination of fair values 

A number of the Group’s accounting policies and disclosures require the determination of fair 

value, for both financial and non-financial assets and liabilities. Fair values have been 

determined for measurement and/or disclosure purposes based on the following methods 

and where applicable, further information about the assumptions made in determining fair 

values is disclosed in the notes specific to that asset or liability. 

(i) Term Deposits, Debentures, Bank Bonds and Notes 

The fair value of these investments is based on their listed market price, if available. If 

a listed market price is not available, then fair value is estimated by discounting the 

difference between the contractual forward price and the current forward price for the 

residual maturity of the contract using a market interest rate (based on government 

bonds). These investments are held for a set term and rolled over at maturity. 

(ii) Equity investments and unit trusts 

For securities listed in an active market, fair value is determined by reference to 

published bid price quotations. For investments in unlisted investment trusts the fair 

value is determined with reference to the quoted redemption price provided by the 

Trustee. There were no equity investments or investments in unit trust in the period 

ending 30 June 2010. 

(iii) Land and buildings 

The Company uses Landlink Property Group Pty Ltd, a valuations and advisory services 

company which employs accredited independent valuers, to determine the fair value of its 

land and buildings. Fair value is determined directly by reference to market based 

evidence, which is the amounts for which the assets could be exchanged between a 

knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length 

transaction as at the valuation date. The effective dates of the valuations were 30 June 

2009 for the Geelong properties. 

31 

31





(g) Cash and cash equivalents 

For the purposes of the Cash Flow Statement, cash includes cash on hand and bank 

deposits at call within 90 days. 

(h) Trade and other receivables 

The Premium receivable as at 30 June 2010 consists of: 

(i) Actual cash premium receipts for periods in advance of the reporting date; plus 

(ii) Forecast premiums receivable from policyholders at 30 June 2010. 

(i) Property, plant and equipment 

Land and buildings are recorded at valuation (buildings are subsequently subject to 

depreciation) and plant and equipment are recorded in the financial statements at cost less 

accumulated depreciation. The Company engages an appropriately qualified person to 

undertake a full valuation of its land and buildings at intervals not greater than three years 

(see 1 (f)(iii)). 

(j) Recoverable amount of non-current assets 

Non-current assets, except for investments and land and buildings are recorded in the 

financial statements at cost less accumulated depreciation. The carrying values of all noncurrent 

assets are reviewed by management at regular intervals to ensure that they are not 

stated at amounts in excess of their recoverable amounts. Except where stated, recoverable 

amounts are not determined using discounted cash flows. Management has reviewed the 

assets and are of the opinion that there has been no impairment of the asset’s current values 

within the asset classes. 

(k) Depreciation 

Property, plant and equipment, other than land, is depreciated using either the diminishing 

value method or the straight line method over the period during which benefits are expected 

to be derived from the asset. Profits and losses on disposal of property, plant and equipment 

are taken into account in determining the profit for the year. The following rates of 

depreciation are applied: 


2009 

% 

% 

Buildings 1.5 1.5 

Furniture & Fittings 10.0 10.0 

Office Equipment 15.0 to 40.0 15.0 to 40.0 

Motor Vehicles 22.5 22.5 

32 

32





(l) Employee benefits 

Salaries and wages and annual leave 

Liabilities for salaries and wages and annual leave are recognised, and are measured as the 

amount unpaid at the reporting date based on remuneration rates expected to apply when 

the obligation is settled, including on-costs, in respect of employees’ services up to that date. 

Long service leave 

A liability for long service leave is recognised, and is measured as the present value of 

expected future payments to be made in respect of services provided by employees up to the 

reporting date. Consideration is given to the expected future wage and salary levels, 

experience of employee departures and periods of services. Expected future payments are 

discounted using interest rates on national government guaranteed securities with terms to 

maturity that match, as closely as possible, the estimated future cash flows. 

(m) Health benefits risk equalisation trust fund 

Under the provisions of the Private Health Insurance Risk Equalisation Policy Rules 2007, 

hospital benefits are submitted to the Risk Equalisation Trust Fund and shared amongst all 

health benefit funds in the following circumstances: 

Where a fund has directly paid these benefits, which are proportionally less than the average 

of other funds in the State, it is required to pay to the Risk Equalisation Trust Fund an 

amount equivalent to the shortfall. Conversely, where the direct payment is proportionally 

greater than the average, the difference is paid to the Company from the Risk Equalisation 

Trust Fund. Eligible claims are assessed on a quarterly basis. 

(n) Claims outstanding 

Claims that have been incurred by Fund members, but not yet presented to the Company for 

reimbursement, are estimated based on the claims experience in previous accounting 

periods. Outstanding claims are not discounted as they are usually settled within six months 

of the reporting date. The provision is calculated in accordance with the principles of the 

chain ladder method which can be used under the prudential regulations of the Private 

Health Insurance Industry. 

AASB 1023 requires a risk margin be applied to allow for the inherent uncertainty in the 

central estimate. GMHBA adopted a risk margin of 6% giving in excess of 90% probability of 

adequacy. The risk margin has been based on an analysis of the past experience of the 

Company by our Appointed Actuary on the adequacy of the provision over the prior years. 

33 

33





(n) Claims outstanding (continued) 

The liability for outstanding claims provides for claims received but not assessed and claims 

incurred but not received. The liability is based on an actuarial assessment taking into 

account historical patterns of claim incidence and processing. Changes in claims estimates 

are recognised in profit or loss in the reporting period in which the estimates are changed. 

The liability also allows for an estimate of claims handling costs which include internal and 

external costs incurred in connection with the negotiation and settlement of the claims 

department and any part of the general administrative costs directly attributable to the claims 

function. The allowance for the claims handling cost at 30 June 2010 is 5% of the claims 

liability. 

(o) Liability Adequacy Test 

Under AASB 1023 the Company is required to perform a Liability Adequacy Test to 

determine whether the carrying amount of insurance liabilities is adequate based on 

expected future cash flows. The test is carried out with the inclusion of a risk margin and is 

undertaken at the level of portfolio contracts that are subject to broadly similar risks and are 

managed together as a single portfolio. Any deficiency arising is recognised by writing down 

any related intangible assets, then the related deferred acquisition costs with any remaining 

balance being recognised as an unexpired risk liability. 

The Liability Adequacy Test is required to be performed to determine whether the unearned 

premium liability (premiums in advance) is adequate to cover the present value of expected 

cash flows relating to future claims arising from rights and obligations under current 

insurance coverage plus an additional risk margin to reflect the inherent uncertainty in the 

central estimate. The risk margin adopted is 2.5% which corresponds to a 70% probability of 

adequacy. The reason these percentages differ from those adopted in determining the 

outstanding claims liability is that the former is in effect an impairment test used only to 

assess the sufficiency of net premium liabilities whereas the latter is an accounting policy 

measurement used in determining the carrying value of the outstanding claims liability. 

If the present value of the expected future cash flows relating to future claims plus the 

additional risk margin to reflect the inherent uncertainty in the central estimate exceeds the 

unearned premium liability less related intangible assets and related deferred acquisition 

costs then the unearned premium is deemed to be deficient. 

The Liability Adequacy Testing as at 30 June 2010 did not result in any adjustment, as a 

surplus was identified. 

34 

34





(p) Connect Reward benefits 

The Company operates a Connect Reward benefits entitlement for Fund members who have 

at least one year of eligible combined (hospital and ancillary) membership. Fund members 

receive an additional annual allocation of benefits as long as their eligible cover is 

maintained. In addition, the ‘Connect Rewards’ product entitles eligible combined Fund 

members to accumulate annual allocations, which they can use to claim additional benefits. 

Provision is made for the future liability for claims under the Connect Rewards entitlements. 

The Company has provided for the total eligible benefit to combined Fund members as at 

30 June 2010 with due allowance for both expected timing of payments and foregone benefit 

entitlements on the basis that it is likely that not all Fund members will use their full 

entitlement. This allowance is reviewed periodically and the provision is currently 70% of the 

full Connect Reward entitlement in respect of membership up to 30 June 2010. 

(q) Deferred acquisition costs 

The Company incurs costs to acquire and establish new members and policy holders. These 

costs include commissions paid to agents or brokers. Deferred acquisition costs are 

capitalised and amortised in accordance with the pattern of the incident of risk. The 

Company capitalised and amortised these costs in the income statement over three years on 

a straight-line basis. 

(r) Comparative information 

Where necessary, comparative figures have been adjusted to conform to changes in 

presentation for the current financial year. No items have been reclassified from the 

Company’s prior year financial report to conform to the current period’s presentation. 

(s) Unearned premium liability 

Premiums received or receivable up to the end of the financial year are recorded as revenue 

for the period from the date of the attachment of risk. Premiums received prior to 30 June 

2010 relating to the period beyond 30 June 2010 are recognised an Unearned Premium 

Liability. Also, forecast premiums receivable from policyholders at 30 June 2010 are 

recognised as unclosed business premiums. 

(t) Trade and Other Payables 

Liabilities are recognised for amounts payable in the future for goods and services received 

at balance date, whether or not billed to the Company. The company’s payables are all 

considered short term. 

(u) Income tax 

The Company is exempt from income tax by virtue of Section 50-30 item 6.3 of the Income 

Tax Assessment Act. 

35 

35





(v) Rounding of amounts 

The Company is an entity to which Australian Securities and Investment Commission Class 

Order 98/100 applies and amounts have been rounded off in accordance with that Class 

Order. All amounts shown in the financial statements are expressed to the nearest $1,000. 

(w) Investments 

Investments comprise assets held to back insurance liabilities. All investments are managed 

and performance evaluated on a fair value basis for both external and internal reporting 

purposes in accordance with a documented investment management strategy. 

All investments are determined to be assets backing insurance liabilities and accordingly are 

designated as fair value through profit or loss upon initial recognition. They are initially 

recorded at fair value being the cost of acquisition excluding transaction costs and are 

subsequently remeasured to fair value at each reporting date. 

Changes in the fair value from the previous reporting date (or cost of acquisition excluding 

transaction costs if acquired during the financial period) are recognised as realised or 

unrealised investment gains or losses in profit or loss. Purchases and sales of investments 

are recognised on a trade date basis, being the date on which a commitment is made to 

purchase or sell the asset. 

Transaction costs for purchases of investments are expensed as incurred and presented in 

the income statement as investment expenses on assets backing insurance liabilities. 

Investments are derecognised when the rights to receive future cash flows from the assets 

have expired, or have been transferred, and substantially all the risks and rewards of 

ownership have transferred. 

Investment revenue, comprising interest is brought to account on an accruals basis. 

(x) Revenue recognition 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to 

the Company and the recognition can be reliably measured. The following specific 

recognition criteria must also be met before revenue is recognised. 

Premium Income 

Premium income comprises amounts charged to policyholders for insurance contracts. 

Premium income is recognised in the Income Statement from the attachment date, as soon 

as there is a basis on which it can be reliably measured. Revenue is recognised in 

accordance with the pattern of the incidence of risk expected over the term of the contract. 

The proportion of premium received or receivable not earned in the Income Statement at the 

reporting date is recognised in the Balance Sheet as unearned premium liability. 

36 

36





(y) Asset revaluation reserve 

The reserve represents increments/decrements from the revaluation of the Company’s land 

and buildings. 

(z) Leases 

The Company has several operating leases. The lease payments are recognised as an 

expense in the Income Statement on a straight line basis over the term of the lease. 

37 

37




2. Profit 

Profit for the year includes the following specific 

expenses: 

38 


$’000 

2009 

$’000 

Net gain / (loss) on disposal of non-current assets (15) (10) 

Rental expenses on operating leases 417 406 

3. Cash and cash equivalents 

Cash on hand 98 96 

Cash at bank 4,718 7,376 

4,816 7,472 

4. Trade and other receivables 

Unclosed premium earned 1,280 1,200 

Unclosed premium unearned 897 798 

2,177 1,998 

Accrued investment income 2,742 1,914 

Other debtors 120 198 

Federal government rebate 6,206 5,544 

11,245 9,654 

5. Financial assets 

Current 

Bank Term Deposits 141,933 122,594 

Debentures - 3,021 

Bank Bonds - 502 

At fair value 141,933 126,117 

Cost 141,933 126,117 

Non-current 

Term Deposits - 4,011 

At fair value - 4,011 

Cost - 4,011 

The Company’s exposure to interest rate risk and a sensitivity analysis for financial assets are 

disclosed in note 15. 

38




6. Other assets 

39 


$’000 

2009 

$’000 

Prepayments - 81 

Deferred Acquisition Costs 157 - 

157 81 

7. Property, plant and equipment 

Freehold land at valuation 1,955 1,955 

Land at valuation 1,955 1,955 

Buildings at valuation 1,745 1,745 

Less accumulated depreciation (26) (0) 

1,719 1,745 

Furniture and fittings at cost 1,219 1,209 


244 368 

Office equipment at cost 4,086 3,371 

Less accumulated depreciation (2,633) (2,223) 

1,453 1,148 

Motor vehicles at cost 31 29 


25 21 

Capital Work in Progress 1,205 121 


1,205 121 

Total 6,601 5,358 

39




7. Property, plant and equipment (continued) 

Reconciliation of the carrying amounts of each class of property, plant and equipment at the 

beginning and end of the financial year are set out below: 

Land Buildings Furniture Office Motor Capital Total 

&Fittings Equipment Vehicles WIP 

$’000 $’000 $’000 $’000 $’000 $’000 $’000 

Carrying amount at 1 July 2009 1,955 1,745 368 1,148 21 121 5,358 

Additions - - 11 594 31 - 636 

Additions WIP - - - - - 1,205 1,205 

WIP Re-allocation - - - 121 - (121) - 

Disposals - - - - (30) - (30) 

Depreciation - (26 ) (134) (411 ) (6) - (577) 

Write Offs/adjustments - - (1) 1 9 - 9 

Carrying amount at 30 June 2010 1,955 1,719 244 1,453 25 1,205 6,601 

Land Buildings Furniture Office Motor Capital Total 

&Fittings Equipment Vehicles WIP 

$’000 $’000 $’000 $’000 $’000 $’000 $’000 

Carrying amount at 1 July 2008 1,665 1,854 511 848 25 - 4,903 

Additions - - 4 627 - - 631 

Additions Hi Software Dev WIP - - - - - 121 121 

Revaluations 290 (80 ) - - - - 210 

Depreciation - (29 ) (147 ) (317) (4) - (497) 

Write Offs - - - (10) - - (10) 

Carrying amount at 30 June 2009 1,955 1,745 368 1,148 21 121 5,358 

8. Trade and other payables 

40 


$’000 

2009 

$’000 

Health Benefits Risk Equalisation Trust Fund 2,036 976 

Creditors and accruals 4,388 2,215 

6,424 3,191 

40 

.




9. Provisions 

Current 

41 


$’000 

2009 

$’000 

Outstanding claims 14,177 12,755 

Risk margin 2,419 2,166 

16,596 14,921 

Connect Reward benefits 13,340 14,351 

Employee annual leave 600 534 

Employee long service leave 298 279 

30,834 30,085 

Non-current 

Employee long service leave 129 103 

129 103 

The reconciliation of the provisions are as follows: 

Outstanding claims including risk margin 

Balance at beginning of year 14,921 12,202 

Add claims incurred 183,423 161,125 

Less claims paid (181,748 ) (158,406) 

Net outstanding claims liability 16,596 14,921 

Benefits paid to fund members 

Gross Claims - undiscounted 

Current 188,858 159,213 

Prior (371 ) 1,601 

Total benefits paid 188,487 160,814 

Current year claims relate to claim events that occurred in the current financial year. Prior year 

claims relate to a reassessment of the claim events that occurred in all previous financial periods. 

A major component of the prior year movement is the release of risk margins in respect of claims 

payments settled during the year. In order to maintain strong reserves, much of this release is 

transferred to current reserves for which the development of claims is less mature and there is 

much greater uncertainty attaching to the ultimate cost of claims. 

Insurance contracts 

Insurance contracts are defined as those containing significant insurance risk at the inception of 

the contract or those where at the inception of the contract there is a scenario with commercial 

substance where the level of insurance risk may be significant over time. The significance of 

insurance risk is dependant on both the probability of an insurance event and the magnitude of its 

potential effect. 

41




9. Provisions (continued) 

Insurance contracts (continued) 

Once a contract has been classified as an insurance contract, it remains an insurance contract for 

the remainder of its lifetime, even if the insurance risk reduces significantly during this period. The 

Company has determined that all current contracts with policyholders are insurance contracts. 

Underwriting insurance contracts expose the Company to liquidity risk through payment obligations 

of unknown amounts on unknown dates. Liquidity risk is the risk of having insufficient cash 

resources to meet payment obligations. 

The assets held to back insurance liabilities consist largely of money market securities, fixed 

interest investments and other highly liquid assets. Asset management is designed to ensure 

consistency between forecasted claims payment obligation and asset maturity profiles. 

Management of liquidity risk is incorporated into GMHBA’s risk management strategy. 

Insurance Risk Management 

The risk management structure offers a level of assurance that the Company’s risks are 

administered thoroughly and astutely. The Risk Management Plan addresses the operational risks 

of the Company. 

The structure is inclusive of a Risk Management Plan, which is the process of planning, 

organising, directing and controlling the resources and activities of an organisation in order to 

minimise the adverse effects of accidental losses to that organisation at least possible cost. It is 

recognised as an integral part of good management practice, which involves a process consisting 

of steps which when undertaken in sequence, enable continual improvement in decision-making. 

Risk management is as much about identifying opportunities as avoiding or mitigating losses. 

The risk management plan defines management responsibilities and the processes involved in 

mitigating any qualitative and quantitative risks through a set of developed guidelines. The risk 

management plan is subject to a formal review process to ensure continued effectiveness. 

42 

42




9. Provisions (continued) 

Connect Reward benefits 2010 

$’000 

43 

2009 

$’000 

Balance at beginning of year 14,351 15,324 

Add Benefits accrued 4,649 3,002 

less Benefits utilised (5,660) (3,975) 

13,340 14,351 

Employee annual leave 

Balance at beginning of year 534 533 

Add annual leave incurred 643 589 

Less annual leave paid (577) (588) 

600 534 

Long service Leave 

Balance at beginning of year 382 393 

Add long service leave incurred 119 67 

Less long service leave paid (74) (78) 

427 382 

10. Other liabilities 

Unearned premium liability 29,396 27,294 

Unclosed business premium 897 798 

30,293 28,092 

11. Notes to the Cash Flow Statement 

(a) Reconciliation of net cash provided by operating 

activities to operating profit: 

Operating profit 5,850 7,960 

Depreciation 577 497 

Net gain / (loss) on sale of non-current assets 12 10 

Revaluation of investments 515 117 

(Increase) in receivables (1,591) (1,008) 

(Increase) in investments (433) (515) 

(Increase) in other assets (76) (81) 

Increase/(decrease) in payables 3,234 (1,096) 

Increase in provisions 774 1,738 

Increase in other liabilities 2,201 4,082 

Net cash provided by operating activities 11,063 11,704 

43




11. Notes to the Cash Flow Statement (continued) 

(b) Reconciliation of cash 

For the purposes of the cash flow statement, cash 

includes cash on hand and bank deposits at call 

within 90 days, net of any outstanding bank overdraft. 

Cash at the end of the financial year as shown in the 

cash flow statement is reconciled to the related items 

in the Balance Sheet: 

44 


$’000 

2009 

$’000 

Cash on hand 98 96 

Cash at bank 4,718 7,376 

4,816 7,472 

(c) Standby arrangements 

The Company has no credit standby arrangements or 

loan facilities. 

12. Commitments 

Leases 

The following is a schedule by years of future 

minimum rental payments required under operating 

leases that have non-cancellable lease terms in 

excess of one year as at 30 June 2010. 

Due: 

Not later than one year 353 416 

Later than one year but not later than five years 226 361 

579 777 

44




13. Contingent liabilities 

There are no contingent liabilities. 

14. Related parties 

Key Management Personnel 

Under AASB 124 “Related Party Disclosures” financial disclosures will be required for the Key 

Management Personnel. Under the standard Key Management Personnel (KMP) are defined 

as: 

“Those people having authority and responsibility for planning, directing and controlling the 

activities of the entity, directly or indirectly, including any director whether (executive or 

otherwise) of that entity.” 

Under AASB 124, non-disclosing entities must provide a breakdown of their total remuneration of 

their KMP in aggregate for the comparative period. 

Compensation of Key Management Personnel - Directors 

45 


$ 

2009 

$ 

Short term benefits 332,455 312,650 

No long term benefits or termination benefits were paid to Directors at balance date. 

Compensation of Key Management Personnel - Management 

Short term benefits 1,478,520 1,361,856 

No long term benefits or other termination benefits were paid to key management personnel during 

the 2009-10 financial year. 

Directors 

The names of persons who were Directors of the Company at any time during the financial year 

are as follows: 

Michael Joseph Dowling 

John Charles Catford 

Russell Henry Elliott 

Kenneth Edward Jarvis 

Gerald Miller 

Sue Renkin 

45 

Mark William Sibree 

James Edmund Walsh 

Heather Louise Wellington




15. Financial instruments 

The Company is exposed to a variety of financial risks in the normal course of business; market 

risk (including currency risk, interest rate risk and price risk), credit risk, and liquidity risk. 

Interest rate risk disclosures 

The Company’s exposure to interest rate risk is set out below: 

2010 Floating/Fixed 

interest 

rate 

46 

Interest Maturing in: 

1 year or less Over 1 to 5 

years 

Non-interest 

bearing 

Financial assets $’000 $’000 $’000 $’000 $’000 

Cash 3 4,816 - - - 4,816 

Receivables 4 - - - 11,245 11,245 

Bank term deposits 5 - 141,933 - - 141,933 

Debentures 5 - - - 

Bank bonds 5 - - - - - 

Total 

4,816 141,933 - 11,245 157,994 

Weighted average interest rate % 5.65 - 

Financial liabilities 

Payables 8 - - - 6,424 6,424 

- - - 6,424 6,424 

Net financial assets 4,816 141,933 - 4,821 151,570 

2009 NOTE Floating/Fixed 

interest 

rate 

Interest Maturing in: 

1 year or less Over 1 to 5 

years 

Non-interest 

bearing 

Financial assets $’000 $’000 $’000 $’000 $’000 

Cash 3 7,472 - 7,472 

Receivables 4 - - 9,654 9,654 

Bank term deposits 5 122,594 4,011 126,605 

Debentures 5 3,021 3,021 

Bank bonds 5 502 502 

Total 

7,472 126,117 4,011 9,654 147,254 

Weighted average interest rate % 7.50 4.38 

Financial liabilities 

Payables 8 - 3,191 3,191 

3,191 3,191 

Net financial assets 7,472 126,117 4,011 6,463 144,063 

46




16. Auditor’s remuneration 

47 


$’000 

2009 

$’000 

Audit and review of financial reports 110 100 

17. Market Risk 

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate 

because of changes in market factors. Market risk comprises three types of risk: currency risk (due 

to fluctuations in foreign exchange rates), interest rate risk (due to fluctuations in market interest 

rates) and price risk (due to fluctuations in market prices). The following policies and procedures 

are in place to mitigate the company’s exposure to market risk. 

• A risk management plan and investment plan setting out the assessment and determination 

of what constitutes market risk for the company. 

• The Investment Committee is responsible for compliance with the investment plan which it 

monitors for any exposures or breaches. It is also the role of the Investment Committee to 

determine action plans in mitigation of market risk. 

Currency risk 

Currency risk is the risk that the fair value of future cash flows of a financial instrument will 

fluctuate because of changes in foreign exchange rates. 

The company does not have any foreign investments and therefore is not exposed to foreign 

exchange rate risk. 

Interest rate risk 

Interest rate risk is the risk that the value of future cash flows of a financial instrument will fluctuate 

because of changes in market interest rate. The company invests primarily in financial instruments 

with fixed interest rates which expose the company to fair value interest rate risk. 

The following table illustrates the sensitivity of the net result for the year ended 30 June 2010 to a 

reasonably possible change in interest rates of + / -1% (2009: + / - 1%). These changes are 

considered to be reasonably possible based on observation of current market conditions. The 

calculations are based on the company’s financial instruments held at balance sheet date, with all 

other variables held constant. 


2009 

$’000 

$’000 

+1% -1% +1% -1% 

Money Market Securities 

Net result (603) 612 (650) 661 

The company actively manages its investments in high quality liquid fixed interest securities and 

cash for the duration of the fixed interest period, which should be taken into consideration when 

considering the impact of the above movement. 

47




17. Market Risk (continued) 

Fair Value hierarchy 

The table below separates the total investments balance based on a hierarchy that reflects the 

significance of the inputs used in the determination of fair value. The fair value hierarchy has the 

following levels: 

I. Level 1 quoted prices 

Quoted prices (unadjusted) in active markets for identical assets and liabilities are used. 

II. Level 2 other observable inputs 

Inputs that are observable (other than Level 1 quoted prices) for the asset or liability, either 

directly (i.e. as prices) or indirectly (i.e. derived from prices) are used. 

III. Level 3 unobservable inputs 

Inputs for the asset or liability that are not based on observable market data (unobservable 

inputs) are used. 

Where the determination of fair value for an instrument involves inputs from more than one 

category, the level within which the instrument is categorised in its entirety is determined on the 

basis of the lowest level input that is significant to the fair value measurement in its entirety. 


Financial assets designated at fair value 

through profit or loss 

Level 1 Level 2 Level 3 Total 

$000 $000 $000 $000 

141,933 - - 141,933 

At 30 June 2010 the company investments are term deposits. Quoted market rates at balance date 

are used to determine the market value of these investments. 

48 

48




17. Market Risk (continued) 

Price risk 

Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate 

because of changes in market prices, whether those changes are caused by factors specific to the 

individual financial instrument or its issuer, or factors affecting all similar financial instruments 

traded on the market. 

The company is not materially exposed to price risk. At 30 June 2010 the company investments 

are composed of term deposits. The company holds its investments to maturity and do not trade 

these investments. 

Credit risk 

Credit risk is the risk that one party to a financial instrument will cause financial loss to the other 

party by failing to discharge an obligation. 

Credit risk in relation to trade receivables is considered low as the balance is largely unearned. 

Measurement is based on unbiased support and taking into account past experience. The 

Company minimises concentrations of credit risk by undertaking transactions with a large number 

of customers/contributors. The Company is not materially exposed to any individual customer, 

however is exposed to credit risk through insurance, reinsurance and investments. 

Credit risk in respect of insurance and reinsurance receivables is actively monitored through the 

risk management plan which includes analysis of claiming patterns. 

The Company developed and adopted an investment plan to maximise return of the investment 

portfolio within defined risk categories. The Company minimises concentrations of investment risk 

by undertaking direct investment transactions with a wide variety of suitably rated financial 

institutions. 

The Standard & Poor’s Credit rating as at 30 June 2010 for each class of instrument held are: 

Term Deposits - A-1+ 

18. Capital Management 

The capital structure of the company consists of cash reserves and investments representing 

member funds. Operating cash flows are used to maintain and increase the company’s 

investments. The company’s investments at reporting date are composed of term deposits and the 

company does not hold investment in the equity market. The investment and audit committee 

along with the Board continue to monitor the market conditions. The company does not have any 

external borrowings. 

49 

49




18. Capital Management (continued) 

The company manages its capital to ensure it will be able to continue as a going concern and 

protect member funds. Capital reserves have increased as follows: 

$ % 

Year ‘000 Increase 

2008 83,052 1.28% 

2009 91,222 9.84% 

2010 97,072 6.41% 

The company is subject to externally imposed capital requirements under the Private Health 

Insurance Act 2007 and aims to maintain capital reserves at a sufficient level to meet Board policy 

reserving at 10% of total assets above the statutory capital adequacy requirement. The company 

Capital Adequacy Reserve requirement, as per the Private Health Insurance (Health Benefits Fund 

Administration) Rules 2007, is $26.239 million. Total Health Benefits Fund Assets are $164.752 

million, representing a surplus of $70.833 million over the Capital Adequacy Reserve and total 

Health Benefit Fund Liabilities ($67.680 million). The surplus represents 370% above the statutory 

requirement. 

Solvency requirement 

GMHBA’s Solvency Reserve, as per the Private Health Insurance (Health Benefits Fund 

Administration) Rules 2007, is $15.797 million. Total Health Benefits Fund Assets are $164.752 

million, representing a surplus of $81.275 million over the Solvency Reserve and total Health 

Benefit Fund Liabilities ($67.680 million). 

19. Company information 

GMHBA Limited is a public company limited by guarantee. If the Company is wound up, the 

constitution states that each Company member is required to contribute a maximum of $20 

towards meeting any outstanding obligations of the Company. At 30 June 2010 the number of 

Company members was 8 (2009: 7). 

50 

50


51



Principal Registered Office and Branch Locations: 

60 – 68 Moorabool Street, Geelong, Victoria, 3220. Telephone: (03) 5224 8636 

P.O. Box 761, Geelong, 3220. Facsimile: (03) 5224 8659 

Email: service@gmhba.com.au 

Web Site: www.gmhba.com.au 

BRANCH LOCATIONS: 

GEELONG AREA 

BELMONT 178 High Street Telephone: (03) 5260 8540 

Facsimile: (03) 5244 2012 

NORLANE Bellpost Shopping Centre Telephone: (03) 5274 3131 

Anakie Road Facsimile: (03) 5275 4092 

NEWCOMB Bellarine Village Telephone: (03) 5248 7333 

Queenscliff Road Facsimile: (03) 5248 7944 

OTHER AREAS 

BALLARAT 62 Bridge Mall Telephone: (03) 5331 7855 

Facsimile: (03) 5331 4910 

BENDIGO Shop 11A, Fountain Court Telephone: (03) 5442 7400 

Charing Cross Facsimile: (03) 5443 7106 

COLAC 178 Murray Street Telephone: (03) 5231 3146 

Facsimile: (03) 5231 1234 

HAMILTON 182 Gray Street Telephone: (03) 5572 4444 

Facsimile: (03) 5571 9013 

MELBOURNE 441 Little Collins Telephone: (03) 9602 1475 

Facsimile: (03) 9670 7162 

PORTLAND 112a Percy Street Telephone: (03) 5523 3376 

Facsimile: (03) 5523 6303 

WARRNAMBOOL 114 Lava Street Telephone: (03) 5562 8777 

Facsimile: (03) 5561 1737 

PERTH Suite 7 168 St Georges Telephone: (08) 6266 6400 

Terrace Perth Facsimile: (08) 9481 5568 

Affiliations: 

GMHBA is a member of: 

- The Australian Health Insurance Association 

- The Australian Health Service Alliance 

- The International Federation of Health Plans 

- The Geelong Chamber of Commerce 

- The Committee for Geelong 

- 

Agency: 

The Victorian Employers’ Chamber of Commerce and Industry 

GMHBA is an Agent for: 

- Allianz Insurance 

54 

54

56 

GMHBA Limited 

60-68 Moorabool Street, Geelong Vic 3220 

PO Box 761, Geelong Vic 3220 

Ph: 1300 4 GMHBA (46422) 

Fax: (03) 5221 4582 

Email: service@GMHBA.com.au 

Website: GMHBA.com.au 

GMHBA is a registered not-for-profit 

Health Benefits Organisation 

ABN 98 004 417 092 

GMHBA Limited is a public company limited by 

guarantee and incorporated in Australia. 

Registered office and principal place of business: 

60-68 Moorabool Street, Geelong Victoria 3220

GMHBA AnnuAL RepoRt 2010 - GMHBA Health Insurance

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