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General Insurance Supervisory Levy Imposition Determination 20091


General Insurance Supervisory Levy
Imposition Determination 20091
General Insurance Supervisory Levy Imposition Act 1998
I, CHRIS BOWEN, Minister for Financial Services, Superannuation and Corporate
Law, make this Determination under subsection 8 (3) of the General Insurance
Supervisory Levy Imposition Act 1998.
Dated 1 July 2009
CHRIS BOWEN
Minister for Financial Services, Superannuation and Corporate Law

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Federal Register of Legislative Instruments F2009L02655
Contents




Page
Contents

1
Name of Determination
2

2
Commencement 2

3
Revocation of General Insurance Supervisory Levy Imposition
Determination 2008
2

4
Interpretation 2

5
General component (Act s 8)
4

6
Asset value (Act s 8)
4

7
Special component (Act s 8)
5

8
Eligible premium income (Act s 8)
8


1
Name of Determination

This Determination is the General Insurance Supervisory Levy Imposition
Determination 2009.
2 Commencement

This Determination commences on 1 July 2009.
3 Revocation
of
General Insurance Supervisory Levy Imposition
Determination 2008

The
General Insurance Supervisory Levy Imposition Determination 2008 is
revoked.
4 Interpretation

(1) In this Determination:
2009–2010 financial year means the financial year beginning on 1 July
2009.
Act means the General Insurance Supervisory Levy Imposition Act 1998.
designated security trust fund has the meaning given by section 69 of the
Insurance Act 1973.
foreign general insurer has the same meaning as in the Insurance Act 1973.
Form GRF 300.0: Statement of Financial Position (B) means the Form
titled GRF_300_0_B: Statement of Financial Position (B) that forms part of
Reporting Standard GRS 300.0 (2008).
Form GRF 300.0: Statement of Financial Position (L) means the Form
titled GRF_300_0_L: Statement of Financial Position (L) that forms part of
Reporting Standard GRS 300.0 (2008).
general insurance company includes Lloyd’s.
Lloyd’s has the meaning given by section 3 of the Insurance Act 1973.

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Section 4

policy file means:

(a) the document required to be submitted by a general insurance company
to APRA under Reporting Standard GRS 800.1 (2005), containing the
information about individual insurance policies required by the data
specifications set out in the Schedule to that Standard; or

(b) the document required to be submitted by a general insurance company
to APRA under Reporting Standard LOLRS 800.1 (2005), containing
the information about individual insurance policies required by the data
specifications set out in the Schedule to that Standard.
product liability insurance includes insurance that provides for
compensation for:
(a)
loss;
or
(b)
injury;
or

(c) loss and injury;
caused by, or as a result of, the use of goods.
professional indemnity insurance includes:
(a)
insurance
that
provides cover for a professional person for actions
taken against that professional in tort, contract or under statute law in
respect of advice or services provided as part of his or her professional
practice, including cover in respect of damages and legal expenses; and

(b) directors’ and officers’ liability insurance and legal expense insurance;
and

(c) medical indemnity insurance.
public liability insurance includes:

(a) insurance covering legal liability to the public in respect of bodily
injury or property damage arising out of the operation of the insured’s
business; and

(b) insurance in respect of environmental clean-up costs resulting from
pollution where not covered by Fire and Industrial Special Risk
policies.
record means a line entry or row in a policy file that contains information
relating to a single insurance policy.
reporting period, in relation to a general insurance company, means the
reporting period that applies to the company under paragraph 6 or 7 of
Reporting Standard GRS 300.0 (2008).
Reporting Standard GRS 300.0 (2008) means Reporting Standard GRS
300.0 (2008) Statement of Financial Position made by Financial Sector
(Collection of Data) (reporting standard) determination No. 77 of 2008
under section 13 of the Financial Sector (Collection of Data) Act 2001.
Reporting Standard GRS 800.1 (2005) means Reporting Standard GRS
800.1 (2005) Policy Data: Public and Product Liability and Professional
Indemnity Insurance made by Financial Sector (Collection of Data)
determination No. 30 of 2005 under section 13 of the Financial Sector
(Collection of Data) Act 2001.


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Section 5

Reporting Standard LOLRS 800.1 (2005) means Reporting Standard
LOLRS 800.1 (2005) Policy Data: Public and Product Liability and
Professional Indemnity Insurance made by Financial Sector (Collection of
Data) determination No. 33 of 2005 under section 13 of the Financial
Sector (Collection of Data) Act 2001.
valuation day means:

(a) for a general insurance company that was a general insurance company
at all times during the period from 17 March 2009 to 30 June 2009 —
31 March 2009; and

(b) for a general insurance company that was a general insurance company
for some, but not all, of the period from 17 March 2009 to 30 June
2009 — the day, after 17 March 2009, on which it became a general
insurance company; and

(c) for a general insurance company that became a general insurance
company after 30 June 2009 — the day on which it became a general
insurance company.

(2) In this Determination, a reference to a period from a specified date to
another specified date includes both of those dates.
5
General component (Act s 8)

For paragraphs 8 (3) (a), (b), (c) and (ca) of the Act, table 5 sets out matters
for the 2009–2010 financial year.
Table 5
Item Company
Maximum
Minimum
Restricted levy
Unrestricted
restricted levy
restricted levy
percentage
levy percentage
amount ($)
amount ($)
1 General
insurance 810 000
4 700
0.02185
0.006796
company
6
Asset value (Act s 8)

(1) For paragraph 8 (3) (d) of the Act, a general insurance company’s asset
value is to be worked out using subsections (2) to (4).

(2) The asset value of Lloyd’s is the value of the amounts standing to the credit
of all designated security trust funds as at 31 March 2009.

(3) If the general insurance company was not a foreign general insurer on the
valuation day, its asset value is the value of the company’s assets as at the
valuation day, worked out in the same way as for item 15 (Total assets) in
Form GRF 300.0: Statement of Financial Position (L).

(4) If the general insurance company was a foreign general insurer on the
valuation day, its asset value is the value of the company’s assets as at the
valuation day, worked out in the same way as for item 15 (Total assets) in
Form GRF 300.0: Statement of Financial Position (B).

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Section 7

7
Special component (Act s 8)

(1) For paragraphs 8 (3) (e), (f) and (g) of the Act, table 7 sets out matters for
the 2009–2010 financial year in relation to the general insurance companies
covered by the table.
Table 7
Part 1
Public/product only insurer or professional only insurer
Item
Company
Special maximum
Special levy
Special
Special levy
Special
levy amount on
percentage
maximum levy
percentage
minimum
public/product
on public/
amount on
on
levy
EPI ($)
product EPI
professional
professional
amount
EPI ($)
EPI
($)
1.1 Public/product
50 000
0.1202
N/A
N/A
5 000
only insurer
1.2 Professional N/A N/A
32
000
0.2647
5
000
only insurer

Part 2
Public/product + professional insurer
Item Company
Special
Special
Special
Special levy percentage
maximum levy
maximum levy
minimum
amount on
amount on
levy
public/product
professional
amount
EPI ($)
EPI ($)
($)
2.1 Public/product
50 000
32 000
5 000
A percentage worked out as
+ professional
follows:
insurer
(a) Work out 0.1202% of the
public/product EPI and, if
necessary:
(i) reduce the result to the
special maximum levy
amount; or
(ii) increase the result to
the special minimum
levy amount.
This is amount A.





(b) Work out 0.2647% of the
professional EPI and, if
necessary:
(i) reduce the result to the
special maximum levy
amount; or
(ii) increase the result to
the special minimum
levy amount.

This is amount B.
(c) Add A and B. This is
amount C.


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Section 7

Part 2
Public/product + professional insurer
Item Company
Special
Special
Special
Special levy percentage
maximum levy
maximum levy
minimum
amount on
amount on
levy
public/product
professional
amount
EPI ($)
EPI ($)
($)





(d) Add the public/product
EPI and the professional
EPI. This is amount D.
(e) The special levy
percentage is the same
percentage as C is of D.

Part 3
General insurance company in runoff
Item Company
Special
maximum Special levy
Special minimum
levy amount on EPI
percentage on EPI
levy amount ($)
3.1 Public/product only runoff insurer
2 500
0.0
2 500
3.2 Professional only runoff insurer
2 500
0.0
2 500
3.3 Public/product
+
professional
5 000
0.0
5 000
runoff insurer

(2) In table 7:
EPI means both classes of eligible premium income referred to in
subsection 8 (2) of this Determination.
general insurance company in runoff means a general insurance company
that did not issue or renew any insurance policies of any of the following
kinds during the 2008 calendar year:
(a)
public
liability
insurance;

(b) product liability insurance;

(c) professional indemnity insurance.
professional only insurer:

(a) means a general insurance company that:

(i) carried on professional indemnity insurance during the 2008
calendar year; and

(ii) did not carry on public liability insurance during the 2008
calendar year; and

(iii) did not carry on product liability insurance during the 2008
calendar year; but

(b) does not include a general insurance company in runoff.
professional only runoff insurer means a general insurance company in
runoff that:

(a) has liabilities in respect of professional indemnity insurance; and

(b) has no liabilities in respect of public liability insurance; and

(c) has no liabilities in respect of product liability insurance.

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Section 7

public/product only insurer:

(a) means a general insurance company that:

(i) carried on either or both of public liability insurance and product
liability insurance during the 2008 calendar year; and

(ii) did not carry on professional indemnity insurance during the
2008 calendar year; but

(b) does not include a general insurance company in runoff.
public/product only runoff insurer means a general insurance company in
runoff that:

(a) has liabilities in respect of public liability insurance or product liability
insurance; and

(b) has no liabilities in respect of professional indemnity insurance.
public/product + professional insurer:

(a) means a general insurance company that:

(i) carried on either or both of public liability insurance and product
liability insurance during the 2008 calendar year; and

(ii) carried on professional indemnity insurance during the 2008
calendar year; but

(b) does not include a general insurance company in runoff.
public/product + professional runoff insurer means a general insurance
company in runoff that:

(a) has liabilities in respect of either or both of public liability insurance
and product liability insurance; and

(b) has liabilities in respect of professional indemnity insurance.
special levy percentage on professional EPI means the special levy
percentage (within the meaning of paragraph 8 (3) (g) of the Act) on the
class of eligible premium income referred to in paragraph 8 (2) (a) of this
Determination.
special levy percentage on public/product EPI means the special levy
percentage (within the meaning of paragraph 8 (3) (g) of the Act) on the
class of eligible premium income referred to in paragraphs 8 (2) (b), (c) and
(d) of this Determination.
special maximum levy amount on professional EPI means the special
maximum levy amount (within the meaning of paragraph 8 (3) (e) of the
Act) in relation to the special component of levy on the class of eligible
premium income referred to in paragraph 8 (2) (a) of this Determination.
special maximum levy amount on public/product EPI means the special
maximum levy amount (within the meaning of paragraph 8 (3) (e) of the
Act) in relation to the special component of levy on the class of eligible
premium income referred to in paragraphs 8 (2) (b), (c) and (d) of this
Determination.
special minimum levy amount has the same meaning as in
paragraph 8 (3) (f) of the Act.


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Section 8

8
Eligible premium income (Act s 8)

(1) For paragraph 8 (3) (h) of the Act, a general insurance company’s eligible
premium income is to be worked out using subsections (2) to (6).

(2) The part of the general insurance company’s premium income that is
eligible premium income is:

(a) gross premium income from professional indemnity insurance during
the 2008 calendar year, calculated in accordance with subsection (5);
and

(b) for a general insurance company that carries on public liability
insurance, but not product liability insurance — gross premium income
from that public liability insurance during the 2008 calendar year,
calculated in accordance with subsection (3); and

(c) for a general insurance company that carries on product liability
insurance, but not public liability insurance — gross premium income
from that product liability insurance during the 2008 calendar year,
calculated in accordance with subsection (3); and

(d) for a general insurance company that carries on public liability
insurance and product liability insurance — gross premium income
from that public liability insurance and product liability insurance
during the 2008 calendar year, calculated in accordance with
subsection (3).

(3) Gross premium income from public liability insurance, and gross premium
income from product liability insurance, during the 2008 calendar year is
the sum of:

(a) the aggregate of the amounts required to be reported in the policy file
in the column headed ‘Gross Earned Premium’ (and referred to as
‘field 15b’) for each of the reporting periods ending 30 June 2008 and
31 December 2008, where the class of business reported in the column
headed ‘Class of Business’ (and referred to as ‘field 2’) is ‘Public &
Product’ (‘PL’); and

(b) for each record in relation to which the general insurance company has
not completed the column headed ‘Gross Earned Premium’ — the
aggregate of GEP amounts for each such record calculated in
accordance with subsection (4).

(4) For subsection (3), a GEP amount is the amount calculated in accordance
with the formula:
GAP
× F
where:
GAP is the gross annualised premium reported in respect of the relevant
policy in the column headed ‘Gross Annualised Premium’ (and referred to
as ‘field 15a’) for each of the reporting periods ending 30 June 2008 and
31 December 2008, where the class of business reported in the column
headed ‘Class of Business’ (and referred to as ‘field 2’) is ‘Public &
Product’ (‘PL’).

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Section 8

F is the number of days in the 6 month reporting period during which the
policy was in force, expressed as a percentage of the number of days in the
relevant calendar year.

(5) Gross premium income from professional indemnity insurance during the
2008 calendar year is the sum of:

(a) the aggregate of the amounts required to be reported in the policy file
in the column headed ‘Gross Earned Premium’ (and referred to as
‘field 15b’) for each of the reporting periods ending 30 June 2008 and
31 December 2008 where the class of business reported in the column
headed ‘Class of Business’ (and referred to as ‘field 2’) is ‘Professional
Risk’ (‘PI’); and

(b) for each record in relation to which the general insurance company has
not completed the column headed ‘Gross Earned Premium’ — the
aggregate of GEP amounts for each such record calculated in
accordance with subsection (6).

(6) For subsection (5), a GEP amount is the amount calculated in accordance
with the formula:
GAP
× F
where:
GAP is the gross annualised premium reported in respect of the relevant
policy in the column headed ‘Gross Annualised Premium’ (and referred to
as ‘field 15a’) for each of the reporting periods ending 30 June 2008 and
31 December 2008, where the class of business reported in the column
headed ‘Class of Business’ (and referred to as ‘field 2’) is ‘Professional
Risk’ (‘PI’).
F is the number of days in the 6 month reporting period during which the
policy was in force, expressed as a percentage of the number of days in the
relevant calendar year.
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.



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