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Risk Management in Private Health Insurers

Note: This page is a representation of information published on the PHIAC website prior to 1 July 2015. This information is provided for reference and research purposes only. 

PHIAC, through its ongoing program of fund reviews, has become concerned with the variability in the effectiveness of risk management in the Australian private health insurance industry. This concern was articulated in a Risk Management Consultation Paper No. 1 issued in January 2013 which aimed to:

  1. to generate discussion within the industry about the adequacy of existing risk management practices;
  2. to raise awareness of PHIAC’s regulatory expectations in relation to risk management; and
  3. to discuss options to enhance risk management practices across the industry.

The options proposed in the discussion paper were:

  • Option 1: Retain the status quo, no changes to existing arrangements.
  • Option 2: Promulgation of non-binding risk management guidance material for the industry.
  • Option 3: Development of a Prudential Standard to require all insurers to adopt standard risk management practices.

PHIAC received 22 submissions during this first round of consultation, all of which can be found on the Risk Management Submissions page.

Having regard to the submissions received during this first round of consultation as well as the direction being taken by peer and co-regulators, PHIAC has now released a Risk Management Consultation Paper No. 2 which includes a draft risk management prudential standard which – if chosen as the preferable regulatory option – would apply to private health insurers.

This second consultation paper seeks submissions from the private health insurance industry and other stakeholders on any element of the discussion paper but is specifically interested in views on:

  • the clarity of insurer requirements included in the proposed standard;
  • issues associated with monitoring compliance with, or reporting against the proposed standard; and
  • costs of complying with the proposed standard.

The consultation period extends from November 2013 to January 2014 for 10 weeks. Submissions can be emailed to or sent to:

General Manager, Industry Operations
Private Health Insurance Administration Council
PO Box 4549
Kingston ACT 2604

PHIAC will continue to engage and consult with the industry regarding this and all other aspects of regulation of the private health insurance industry in Australia.