Circular No 07/28

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Circular No 07/28

Contact Officers:
 Chris Richardson (02) 6215 7901
email: chris.richardson@phiac.gov.au

Replaces Circular: NA

22 October 2007

PDF Format:

Circ 07/28
DETERMINATION OF INSURANCE LIABILITIES

This circular implements measures through which insurers will provide assurance that it has notified PHIAC of the circumstances in which an insurer has not adopted its appointed actuary’s recommendation(s) in relation to the valuation of insurance liabilities.

Part 4 of the Private Health Insurance (Insurer Obligations) Rules, 2007 defines the duties of an appointed actuary to be closely involved in the determination of the insurance liabilities of the fund.

PHIAC is aware that compliance with this part is practically achieved through either or both of the following methods:

  • The insurance liabilities are calculated by the appointed actuary and adopted by the fund

  • The insurance liabilities are calculated by the insurer using a methodology developed in conjunction with the appointed actuary

PHIAC notes that the board of the insurer retains ultimate responsibility for the determination of insurance liabilities and wishes to be informed of circumstances in which the board of an insurer has decided not to adopt any recommendation in relation to these liabilities made by the appointed actuary.

This measure will be implemented by the inclusion of a statement in the PHIAC 2 template. Certification is to be made quarterly.

A version of the PHIAC 2 return incorporating this minor amendment is available on the PHIAC website. PHIAC acknowledges the short period to the September reporting deadline. However, insurers are encouraged to use the latest version of the template for the September 2007 quarter returns wherever possible. Insurers that have not used the revised template for the September quarter must provide the declaration as an attachment to the return.