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Private Health Insurance Bill 2007

Part 6-3 Private Health Insurance Administration Council

Division 261 Introduction

261-1   What this Part is about

The Private Health Insurance Administration Council continues in existence with functions and powers relating largely to the regulation of private health insurers through the administration of Chapter 4 and Part 5-3.

261-5   The Private Health Insurance (Council) Rules

                   * External management and * terminating management of * health benefits funds is also dealt with in the Private Health Insurance (Council) Rules. The provisions of this Part indicate when a particular matter is or may be dealt with in these Rules.

Note:          The Private Health Insurance (Council) Rules are made by the Minister under section 333-20.



 

Division 264 Continuation, purposes, functions and powers

264-1   Continuation of the Council

             (1)  The Private Health Insurance Administration Council established under section 82B of the National Health Act 1953 continues in existence by force of this section, under and subject to the provisions of this Act.

             (2)  The Council:

                     (a)  is a body corporate with perpetual succession; and

                     (b)  must have a common seal; and

                     (c)  may acquire, hold and dispose of real and personal property; and

                     (d)  may sue and be sued in its corporate name.

Note:         The Commonwealth Authorities and Companies Act 1997 applies to the Council (subject to section 267-20). That Act deals with matters relating to Commonwealth authorities, including reporting and accountability, banking and investment, and conduct of officers.

             (3)  The common seal of the Council must be kept in such custody as the Council directs and must not be used except as authorised by the Council.

             (4)  All courts, judges and persons acting judicially must:

                     (a)  take judicial notice of the imprint of the common seal of the Council appearing on a document; and

                     (b)  presume that the document was duly sealed.

264-5   Objectives of the Council

                   In performing its functions and exercising its powers, the Council must take all reasonable steps to achieve an appropriate balance between the following objectives:

                     (a)  fostering an efficient and competitive health insurance industry;

                     (b)  protecting the interests of consumers;

                     (c)  ensuring the prudential safety of individual private health insurers.

264-10   Functions of the Council

General

             (1)  The functions of the Council are:

                     (a)  to administer the * Risk Equalisation Trust Fund; and

                     (b)  to administer the registration of private health insurers under Part 4-3; and

                     (c)  the information collection function under subsection (2); and

                     (d)  the compliance functions under subsection (3); and

                     (e)  the enforcement functions under subsection (4); and

                      (f)  the public information functions under subsection (5); and

                     (g)  the agency cooperation functions under subsection (6); and

                     (h)  to advise the Minister about the financial operations and affairs of private health insurers; and

                      (i)  functions incidental to any other functions of the Council; and

                      (j)  any other functions conferred on the Council by this, or any other, Act.

Information collection function

             (2)  The information collection function of the Council is to obtain from each private health insurer regular reports about the insurer’s operations, including reports supported by actuarial certification.

Compliance functions

             (3)  The compliance functions of the Council are:

                     (a)  to establish a * solvency standard and a * capital adequacy standard to be complied with by private health insurers, and to give * solvency directions and * capital adequacy directions to private health insurers; and

Note:       The solvency standard and the capital adequacy standard are established by the Private Health Insurance (Health Benefits Administration) Rules.

                     (b)  to exercise powers and discretions under the * prudential standards, and to give directions to private health insurers relating to compliance with the prudential standards; and

Note:       The prudential standards are established by the Private Health Insurance (Insurer Obligations) Rules.

                     (c)  to consider, in accordance with Division 160, whether persons should, or should not, be * appointed actuaries; and

                     (d)  to consider, in accordance with Division 166, whether persons should, or should not, be * disqualified persons; and

                     (e)  to examine, from time to time, the financial affairs of private health insurers, by the inspection and analysis of the records, books and accounts of the insurers and any other relevant information; and

                      (f)  to review, by carrying out independent actuarial assessment, the value of the assets and liabilities of each * health benefits fund; and

                     (g)  if it is necessary, for the purpose of making a proper examination of the financial affairs of a private health insurer, for the Council to incur unusually high costs—to impose an appropriate fee on the private health insurer concerned.

Enforcement functions

             (4)  The enforcement functions of the Council are:

                     (a)  to take action under Part 5-2 to monitor compliance with, and to encourage or compel compliance with, * Council-supervised obligations; and

                     (b)  to appoint, under section 214-1, * inspectors for the purpose of investigating the affairs of private health insurers under Division 214, and to exercise other related powers and functions of the Council under that Division; and

                     (c)  to appoint, under Subdivision 217-B, persons as * external managers of * health benefits funds, and to exercise other related powers and functions of the Council under Division 217 and 220.

Public information functions

             (5)  The public information functions of the Council are:

                     (a)  to make statistics, and other financial information, relating to a private health insurer or private health insurers, publicly available in accordance with the Private Health Insurance (Council) Rules; and

                     (b)  to collect and disseminate information about private health insurance, for the purpose of enabling people to make informed choices about private health insurance.

Agency cooperation functions

             (6)  The agency cooperation functions of the Council are:

                     (a)  to cooperate with other regulatory agencies on matters affecting private health insurers and the private health insurance industry generally; and

                     (b)  to provide the Private Health Insurance Ombudsman, from time to time, with information in the Council’s possession that the Council considers likely to be of use in production of the State of the Health Funds Reports referred to in paragraph 238-5(c).

264-15   Report on private health insurers

             (1)  The Council must, as soon as practicable after 30 September in each year, give the Minister a report, for presentation to the Parliament, on the operations of private health insurers during the financial year ending on 30 June in that year.

Note:          See also section 34C of the Acts Interpretation Act 1901 , which contains extra rules about annual reports.

             (2)  The report must include, in respect of each * health benefits fund conducted by a private health insurer during the year to which the report relates, the following information:

                     (a)  premiums payable to the fund;

                     (b)  other amounts payable to the fund;

                     (c)  fund benefits payable out of the fund;

                     (d)  management expenses;

                     (e)  other amounts payable out of the fund;

                      (f)  the balance of the fund as at the end of that year;

                     (g)  details of how the reserves of the fund have been invested;

                     (h)  such other information as the Minister requires to be included.

Note:          An annual report on the Council’s operations must also be prepared under section 9 of the Commonwealth Authorities and Companies Act 1997 .

264-20   Powers

                   The Council has power to do all things necessary or convenient to be done for, or in connection with the performance of its functions.

264-25   Directions by Minister

             (1)  The Minister may, by legislative instrument, give directions with respect to the performance of the Council’s functions or the exercise of its powers.

             (2)  The Council must comply with any such direction.

             (3)  Before giving a direction under subsection (1), the Minister must consult the Council about the proposed direction.



 

Division 267 Constitution and administration

267-1   Constitution of the Council

             (1)  The Council consists of the following members:

                     (a)  a Commissioner of Private Health Insurance Administration;

                     (b)  at least 2, and not more than 4, other members.

             (2)  The performance of the functions, or the exercise of the powers, of the Council is not affected only because there is a vacancy or vacancies in the membership of the Council.

267-5   Appointment of members

             (1)  The * members are to be appointed in writing by the Minister.

             (2)  One of the * members may be appointed in writing by the Minister to be the Deputy Commissioner.

             (3)  Appointments must be made in accordance with the requirements (if any) specified in the Private Health Insurance (Council) Rules.

             (4)  The * Commissioner is to be appointed on a full-time basis or on a part-time basis.

             (5)  A * member, other than the * Commissioner, is to be appointed on a part-time basis.

             (6)  If a * member is appointed as * Deputy Commissioner, that appointment is on a part-time basis.

             (7)  A person cannot be appointed as a * member if that person is a * director, * officer or employee of a body regulated by the Council.

267-10   Meetings of the Council

             (1)  Subject to subsection (2), the * Commissioner must convene a meeting of the Council when:

                     (a)  the Commissioner thinks it necessary for the efficient performance of the Council’s functions; or

                     (b)  directed to do so by written notice of the Minister; or

                     (c)  requested in writing to do so by at least 2 * members.

             (2)  The * Commissioner must convene a meeting at least once every 6 months.

             (3)  The * Commissioner must determine the time and place at which a meeting is to be held.

             (4)  A majority of the * members constitutes a quorum.

             (5)  The * Commissioner must preside at all meetings.

             (6)  A question arising at a meeting is decided by a majority of the votes of the * members present and voting. The * Commissioner has a deliberative vote and, if necessary, also has a casting vote.

             (7)  Subject to this section, the * Commissioner must determine the procedure of the meeting.

267-15   Delegation by the Council

                   The Council may, by writing under its common seal, delegate to:

                     (a)  the * Chief Executive Officer; or

                     (b)  another member of staff of the Council;

all or any of the functions and powers of the Council, other than functions and powers under the Commonwealth Authorities and Companies Act 1997 .

267-20   Modification of the Commonwealth Authorities and Companies Act 1997

                   Section 14 of the Commonwealth Authorities and Companies Act 1997 does not apply in relation to the Council.



 

Division 270 Members

270-1   Terms and conditions etc.

                   The Private Health Insurance (Council) Rules may, subject to this Part, specify:

                     (a)  the terms and conditions of appointment of the * Commissioner, of the other * members, and of a member as * Deputy Commissioner; and

                     (b)  their periods of appointment.

270-5   Validity of appointments

                   The appointment of a person as * Commissioner or as another * member is not invalid because of a defect or irregularity in connection with the person’s appointment.

270-10   Acting Commissioner

             (1)  The Minister may appoint a person to act as * Commissioner:

                     (a)  during a vacancy in the office of Commissioner (whether or not an appointment has been previously made to the office); or

                     (b)  during any period, or during all periods, when, the Commissioner is absent from duty or from Australia or is, for any other reason, unable to perform the duties of the office;

but a person appointed to act during a vacancy must not continue to act for more than 12 months.

             (2)  Anything done by or in relation to a person purporting to act as * Commissioner is not invalid because:

                     (a)  the occasion for the appointment had not arisen; or

                     (b)  there was a defect or irregularity in connection with the appointment; or

                     (c)  the appointment had ceased to have effect; or

                     (d)  the occasion for the person to act as Commissioner had not arisen or had ceased.

270-15   Deputy Commissioner to act as Commissioner in certain circumstances

             (1)  The * Deputy Commissioner is to act as * Commissioner:

                     (a)  during a vacancy in the office of Commissioner (whether or not an appointment has been made to the office) if no-one has been appointed to act as Commissioner; or

                     (b)  during any period, or during all periods, when the Commissioner, and any person appointed to act as Commissioner, are absent from duty or from Australia or are, for any other reason, unable to perform the duties of the Commissioner.

             (2)  The * Deputy Commissioner must not act as * Commissioner during a vacancy in the office of Commissioner for more than 12 months.

             (3)  Anything done by or in relation to a person purporting to act as * Commissioner under this section is not invalid because the occasion for the person to act as Commissioner had not arisen or had ceased.

270-20   Powers and duties of persons acting as Commissioner

             (1)  Subject to any direction by the * Commissioner, an acting Commissioner, or the * Deputy Commissioner when acting as Commissioner, has all the powers and functions of the Commissioner under this Act.

             (2)  A power or function of the * Commissioner under this Act or any other Act, when exercised or performed by an acting Commissioner, or by the * Deputy Commissioner when acting as Commissioner, is to be taken, for the purposes of this Act or any other Act, to have been exercised or performed by the Commissioner.

             (3)  The exercise of a power or the performance of a function of the * Commissioner under this Act or any other Act by an acting Commissioner, or by the * Deputy Commissioner when acting as Commissioner, does not prevent the exercise of the power or the performance of the function by the Commissioner.

             (4)  If, under this Act or any other Act:

                     (a)  the exercise of a power or the performance of a function by the * Commissioner; or

                     (b)  the operation of a provision of this Act or that other Act;

is dependent on the opinion, belief or state of mind of the Commissioner in relation to a matter:

                     (c)  that power or function may be exercised or performed by an acting Commissioner, or by the * Deputy Commissioner when acting as Commissioner; and

                     (d)  that provision may operate;

on the opinion, belief or state of mind in relation to that matter of the acting Commissioner, or of the Deputy Commissioner when so acting.

270-25   Remuneration and allowances of members

             (1)  A * member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the member is to be paid the remuneration that is specified in the Private Health Insurance (Council) Rules.

             (2)  A * member is to be paid such allowances as are set out in the Private Health Insurance (Council) Rules.

             (3)  This section has effect subject to the Remuneration Tribunal Act 1973 .

270-30   Leave of absence

             (1)  A full-time * Commissioner has such recreation leave entitlements as are determined by the Remuneration Tribunal.

             (2)  The Minister may grant a full-time * Commissioner leave of absence, other than recreation leave, on such terms and conditions as to remuneration or otherwise as are specified in the Private Health Insurance (Council) Rules.

             (3)  The * Commissioner may grant another * member leave to be absent from a meeting or meetings of the Council.

270-35   Resignation

                   A * member may resign by writing signed and given to the Minister.

270-40   Termination of appointment

             (1)  The Minister may terminate the appointment of a * member for misbehaviour or physical or mental incapacity.

             (2)  The Minister must terminate the appointment of * a member if:

                     (a)  the member becomes bankrupt, applies to take the benefit of a law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors or makes an assignment of his or her remuneration for their benefit; or

                     (b)  the member is absent, except with the leave of the * Commissioner, from 3 consecutive meetings of the Council; or

                     (c)  the member is appointed as the Commissioner on a full-time basis and engages, except with the Minister’s approval, in paid employment outside the duties of his or her office; or

                     (d)  the member is appointed on a part-time basis and engages in paid employment that, in the Minister’s opinion, conflicts with the proper performance of his or her duties; or

                     (e)  the member fails, without reasonable excuse, to comply with section 270-45.

270-45   Disclosure of interests

             (1)  A * member who has a direct or indirect pecuniary interest in a matter being considered or about to be considered by the Council must disclose the nature of the interest to a meeting of the Council.

             (2)  The disclosure must be made as soon as possible after the relevant facts have come to the * member’s knowledge.

             (3)  The disclosure must be recorded in the minutes of the meeting of the Council.

             (4)  The * member:

                     (a)  must not be present during any deliberation by the Council on the matter; and

                     (b)  must not take part in any decision on the Council with respect to the matter.



 

Division 273 Chief Executive Officer and staff

273-1   Chief Executive Officer

             (1)  There is to be a * Chief Executive Officer of the Council who is to be appointed by the Council.

             (2)  The Council may:

                     (a)  determine the terms and conditions of service of the * Chief Executive Officer in respect of matters not provided for by this Part; and

                     (b)  at any time terminate such an appointment.

             (3)  The * Chief Executive Officer holds office on a full-time basis.

             (4)  The * Chief Executive Officer holds office for the period, and subject to the terms and conditions, specified in the instrument of appointment.

             (5)  The appointment of a person as * Chief Executive Officer is not invalid because of a defect or irregularity in connection with the person’s appointment.

273-5   Duties of Chief Executive Officer

             (1)  To the extent determined by the Council, the * Chief Executive Officer is to manage the affairs of the Council.

             (2)  The * Chief Executive Officer must, in managing the affairs of the Council, act in accordance with the policy of, and with any directions given by, the Council.

273-10   Conflict of interests

             (1)  The * Chief Executive Officer must not be present at a meeting of the Council when the Council is making a decision in relation to the office of Chief Executive Officer.

             (2)  If the * Chief Executive Officer has a direct or indirect pecuniary interest in a matter related to his or her duties as Chief Executive Officer, he or she must disclose the nature of the interest to the * Commissioner as soon as possible after the relevant facts have come to his or her knowledge.

273-15   Staff and consultants

             (1)  The Council may employ such staff as the Council thinks necessary to employ to assist the Council in the performance of its functions and the exercise of its powers.

             (2)  The * Commissioner may arrange with an Agency Head (within the meaning of the Public Service Act 1999 ) for the services of * officers or employees in the Agency to be made available to the Council.

             (3)  The Council may engage, under agreements in writing, persons having suitable qualifications and experience to perform services as consultants to the Council.

             (4)  The terms and conditions of staff employed, or consultants engaged, by the Council are such as are determined by the Council from time to time.

273-20   Remuneration and allowances of Chief Executive Officer

             (1)  The * Chief Executive Officer is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the Chief Executive Officer is to be paid the remuneration that is specified in the Private Health Insurance (Council) Rules.

             (2)  The * Chief Executive Officer is to be paid such allowances as are set out in the Private Health Insurance (Council) Rules.

             (3)  This section has effect subject to the Remuneration Tribunal Act 1973 .

273-25   Leave of absence of Chief Executive Officer

             (1)  The * Chief Executive Officer has such recreation leave entitlements as are determined by the Remuneration Tribunal.

             (2)  The Council may grant the * Chief Executive Officer leave of absence, other than recreation leave, on such terms and conditions as to remuneration or otherwise as are specified in the Private Health Insurance (Council) Rules.