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Private Health Insurance (Insurer Obligations) Amendment Rules 2010 (No. 1)

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Private Health Insurance (Insurer Obligations) Amendment Rules 2010 (No. 1)1
Private Health Insurance Act 2007
The Private Health Insurance Administration Council makes these Rules under section 333-25 of the Private Health Insurance Act 2007.
Dated 19 November 2010
DAVID LEARMONTH
Private Health Insurance Administration Council
1              Name of Rules
                These Rules are the Private Health Insurance (Insurer Obligations) Amendment Rules 2010 (No. 1).
2              Commencement
                These Rules commence on 1 January 2011.
3              Amendment of Private Health Insurance (Insurer Obligations) Rules 2009
                Schedule 1 amends the Private Health Insurance (Insurer Obligations) Rules 2009.
Schedule 1        Amendments
(rule 3)
  
[1]           Rule 4, after definition of Appointed Actuaries Standard
insert
ASIC means the Australian Securities and Investments Commission.
[2]           Rule 4, after definition of corporate group
insert
Corporations legislation has the meaning given by section 9 of the Corporations Act 2001.
Disclosure Standard means the standard set out in Schedule 3.
[3]           Rule 4, note, at the foot
after
·      health benefits fund
insert
·      officer
[4]           After rule 11
insert
12            Disclosure Standard
                Schedule 3 sets out the Disclosure Standard.
[5]           Schedule 1, sections 12 and 13
omit
[6]           After Schedule 2
insert
Schedule 3        Disclosure Standard
(rule 12)
  
1              Insurers must give copies of certain forms lodged with ASIC to Council
     (1)       If a private health insurer lodges with ASIC any of the following forms, the insurer must, at the same time, give a copy of the lodged form to the Council:
                (a)    Form 205 — Notification of resolution;
               (b)    Form 315 — Notification of resignation, removal or cessation of auditor;
                (c)    Form 388 — Copy of financial statements and reports;
               (d)    Form 484 — Change to company details;
                (e)    Form 2501 — Application for extension of time to hold Annual General Meeting.
     (2)       A reference in subsection (1) to a lodged form includes a reference to any other material required by the Corporations legislation to be lodged with the form.
     (3)       In this section, a reference to a form followed by a number is a reference to:
                (a)    if a form of that number is prescribed in the Corporations Regulations 2001 for a provision of the Corporations Act 2001 or a provision of those Regulations — the form so numbered in those Regulations; and
               (b)    if a form of that number is not prescribed in those Regulations — the form of that number that is approved by ASIC.
Note   Forms approved by ASIC under paragraph 350 (1) (b) of the Corporations Act 2001 are available on the ASIC website at http://www.asic.gov.au.
2              Insurers to give copies of notice of meetings of members to Council
     (1)       A private health insurer must give to the Council:
                (a)    written notice of a meeting of the members of the insurer in the same way that a member of the insurer is entitled to receive notice of a meeting under section 249J of the Corporations Act 2001; and
               (b)    any other communications relating to the meeting that a member of the insurer is entitled to receive under that Act.
     (2)       The private health insurer must give to the Council the information mentioned in subsection (1) in accordance with:
                (a)    if the insurer is a listed company — the notice requirements mentioned in section 249HA of the Corporations Act 2001; and
               (b)    if the insurer is not a listed company — the longer of:
                          (i)    the notice requirements mentioned in section 249H of the Corporations Act 2001; and
                         (ii)    the period for giving notice specified in the insurer’s constitution.
3              Insurers to notify Council of resolution to remove director
     (1)       A private health insurer must notify the Council, in writing, if:
                (a)    the insurer by resolution removes a director from office; or
               (b)    for an insurer that is not a public company — the directors of the insurer by resolution remove a director from office.
     (2)       The insurer must notify the Council within 14 days after the day the resolution is passed.
4              Insurers to notify Council of termination of person’s complying health insurance policy
     (1)       A private health insurer must notify the Council, in writing, if:
                (a)    a decision is made to terminate a person’s complying health insurance policy with the insurer; and
               (b)    the termination:
                          (i)    does not relate to the person’s payment of premiums under the policy; and
                         (ii)    is not a result of a request by the person to cancel the policy.
     (2)       The notification must:
                (a)    be made within 14 days after the end of the month in which the termination occurred; and
               (b)    include only the following information:
                          (i)    the number of terminations in the month;
                         (ii)    the reason for each termination.
5              Insurers to notify Council of investigation of insurer or officer of insurer
     (1)       A private health insurer must notify the Council, in writing, if:
                (a)    the insurer, or an officer of the insurer, is under investigation or subject to criminal or civil proceedings in relation to an alleged or suspected contravention of:
                          (i)    the Act; or
                         (ii)    the Corporations legislation, or any law of a foreign country that corresponds to the Corporations legislation; or
                         (iii)    the Trade Practices Act 1974; or
                        (iv)    a law in force in Australia, or the law of a foreign country, if the offence concerns dishonest conduct or conduct relating to a financial sector company (within the meaning of the Financial Sector (Shareholdings) Act 1998); or
               (b)    the insurer, or an officer of the insurer, is under investigation or subject to disciplinary action, by a regulatory authority or other body established by or under a law of the Commonwealth or of a State or Territory, for conduct that is reasonably likely to affect the operations of the insurer; or
                (c)    the insurer gives a written undertaking to the Australian Competition and Consumer Commission for section 87B of the Trade Practices Act 1974.
     (2)       The insurer must give to the Council details of a matter mentioned in subsection (1) within 14 days after the insurer becomes aware of the matter.
     (3)       The insurer must report the outcome of the matter to the Council within 14 days after the day the insurer is notified of the outcome of the matter.
     (4)       This section does not apply to:
                (a)    a preliminary inquiry for the purpose of deciding:
                          (i)    how to deal with a complaint relating to a private health insurer or an officer of a private health insurer; or
                         (ii)    whether to conduct an investigation in relation to a private health insurer or an officer of a private health insurer; or
               (b)    a request under section 96‑15 of the Act by the Secretary of the Department or the Private Health Insurance Ombudsman for a private health insurer to give specified information about a complying health insurance product or products, or a complying health insurance policy, of the insurer; or
                (c)    a request under subsection 191‑1 (1) of the Act by the Minister for a private health insurer to explain its operations; or
               (d)    an investigation by the Minister of the operations of a private health insurer under Division 194 of the Act; or
                (e)    the exercise of search powers by an authorised officer in accordance with Division 313 of the Act; or
                (f)    an investigation by the Private Health Insurance Ombudsman.
Note   The Council must comply with the Information Privacy Principles — see section 16 of the Privacy Act 1988. For the limits on disclosure of personal information, see Principle 11 in section 14 of that Act.
6              Insurer must notify Council of unusual incidents or circumstances
     (1)       A private health insurer must notify the Council, in writing or by telephone, as soon as practicable after an unusual incident or circumstance occurs that affects prudential matters relating to the insurer.
Note   For the meaning of prudential matters, see section 163‑1 of the Act.
     (2)       For subsection (1), an unusual incident or circumstance includes, but is not limited to, any of the following:
                (a)    fire, flood or other damage to infrastructure resulting in a substantial loss of operational capacity of the insurer for more than 24 hours;
               (b)    total or partial loss of information and communications technology infrastructure for more than 72 hours;
                (c)    an accident that:
                          (i)    causes the death of, or serious personal injury to, a substantial proportion of the officers of the insurer; or
                         (ii)    causes a substantial proportion of the officers of the insurer to be incapacitated from performing work;
               (d)    biohazard, bomb threat, lockdown or other event that results in a substantial loss of operational capacity of the insurer for more than 24 hours.
7              Exemptions and modifications by Council
                The Council may, on written application by a private health insurer or on its own initiative, in writing:
                (a)    exempt the insurer from all or specified provisions of this Standard; or
               (b)    modify the application of specified provisions of this Standard in relation to the insurer.
8              Transitional arrangements
     (1)       On the commencement of this Standard, a private health insurer that is not able to comply with all of the provisions of the Standard must, in writing to the Council:
                (a)    identify all provisions of the Standard with which the insurer is not able to comply; and
               (b)    specify a date by which the insurer can comply with the identified provisions.
     (2)       The Council must approve a date for compliance by the private health insurer with the identified provisions and tell the insurer, in writing, of the approved date.
     (3)       The private health insurer must comply with the identified provisions by the date approved by the Council.
Note   The date approved by the Council under subsection (2) need not be the same date as the date specified by the insurer under paragraph (1) (b).
Note
1.       All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See http://www.frli.gov.au.