Private Health Insurance (Health Benefits Fund Administration) Amendment Rules 2008 (No. 1)
 
The Private Health Insurance Administration Council makes these Rules under item 1 of the table in section 333-25 of the Private Health Insurance Act 2007.
Dated  1 May 2008
 
 
 
 
____________________________________
James Dominguez
Commissioner
Private Health Insurance Administration Council
 
 
 
Contents
 
Part 1                   Preliminary                                                                                           3
1.           Name of Rules                                                                                        3
2.           Commencement                                                                                      3
3.           Amendment of the Private Health Insurance (Health Benefits Fund Administration) Rules 2007       3
Schedule―Amendments                                                                                                   4
 
 
Part 1        Preliminary
1.      Name of Rules
These Rules are the Private Health Insurance (Health Benefits Fund Administration) Amendment Rules 2008 (No. 1).
2.      Commencement
These Rules commence on the day after they are registered.
3.      Amendment of the Private Health Insurance (Health Benefits Fund Administration) Rules 2007
The Schedule amends the Private Health Insurance (Health Benefits Fund Administration) Rules 2007.
Schedule―Amendments
[1]         Rule 3
The note after the heading for rule 3 is amended by adding in alphabetical order
for profit insurer
[2]          Rule 11
Before rule 11, insert
10A.          Interpretation
In this Part:
financial benefit includes any consideration or payment of any kind in respect of the transfer, but does not include any benefit to a policy holder, or other insured person, arising under the policy that insures the person.
market value means the value of the business concerned if it were disposed of to an unrelated purchaser bidding in a market on an ordinary commercial basis for business of the kind disposed of, without any sort of discount or incentive for the business being offered.
not-for-profit insurer means an insurer which is not registered as a for profit insurer.
[3]          Subrule 11 (4)
After subrule 11 (4), insert
(5)     If the proposed transfer of policies involves any form of financial benefit to any person, the arrangement must state the details of the financial benefit, whether or not the person to benefit is a party to the arrangement.
(6)     If the proposed transfer of policies involves the transfer of policies referable to the health benefits fund of a not-for-profit insurer to the health benefits fund of a for profit insurer, and the transferor insurer has, or will have if the application is approved, any interest in the transferee insurer, the application for approval must provide a statement by an appropriately qualified person, independent of the insurers involved, certifying as to what would be the market value if the transfer involved the sale of the transferor insurer's health insurance business.
(7)     In subrule (6), health insurance business means the assets and liabilities proposed to be transferred under the arrangement referred to in subrule (2).
[4]          Rule 13
After rule 13, insert
13A           Additional criteria for approving or refusing a merger or acquisition
(1)                             For the purposes of subsection 146-5 (5), additional criteria for refusing to approve applications under section 146‑5 are specified in this rule.
(2)                             If the application is in respect of an arrangement which involves the transfer of policies referable to the health benefits fund of a not-for-profit insurer and there is any financial benefit to any person, the criteria for refusal are that the arrangement would result in a financial benefit:
(a)                             to any person who is not a policy holder of, or another person insured through, the health benefits fund conducted by the transferor insurer; or
(b)                             being distributed inequitably between policy holders, or another person insured through, the health benefits fund conducted by the transferor insurer; or
(c)                             not being distributed at all to policy holders of the health benefits fund conducted by the transferor insurer.
(3)                             If the application is in respect of an arrangement of a kind referred to in subrule 11 (6), the criteria for refusal are that:
(a)                             the transferee insurer has not paid the market value for the transferor insurer's health insurance business; or
(b)                             if subrule (2) also applies to the transfer, the financial benefit in respect of the transfer does not represent the market value for the transferor insurer's health insurance business.
(4)                             In considering the market value of an insurer, the Council may have regard to the statement referred to in subrule 11 (6) and any other information it thinks fit.
(5)                             If the Council requests the applicants to amend in a particular way the arrangement that is the subject of the application, it is a criterion for refusal that the applicants fail to amend the arrangement within a time specified by the Council in writing to the applicants.
Note
1.       All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See www.frli.gov.au
2.       These Rules amend the Private Health Insurance (Health Benefits Fund Administration) Rules 2007 (see F2007L00885) as amended by the Private Health Insurance (Health Benefits Fund Administration) Amendment Rules 2007 (No. 1) (see F2007L04875).