GMHBA AnnuAL RepoRt 2010 - GMHBA Health Insurance

GMHBA Limited ABN 98 004 417 092
GMHBA Limited ABN 98 004 417 092
Notes to the Financial Statements for the year ended 30 June 2010 (continued)
1. Summary of significant accounting policies (continued)
(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.
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