The Private Health Insurance Administration Council (PHIAC) was the independent prudential regulator of the private health insurance industry (the PHI industry) in Australia during the 201415 year. PHIAC was established in 1989 and continued to exist under section 264-1 of the Private Health Insurance Act 2007 (PHI Act) as a statutory authority reporting to the Minister for Health, the Hon Peter Dutton MP (to December 2014) and the Hon. Sussan Ley MP (the Minister) until 30 June 2015. During this time, PHIAC was also subject to guidance from the Minister for Finance, the Hon Mathias Cormann.
PHIAC's prudential supervision functions, and its assets and liabilities were transferred to the Australian Prudential Regulation Authority (APRA) with effect from 1 July 2015.
PHIAC was responsible for monitoring the prudential performance of private health insurers. PHIAC administered entry and exit from the industry, conducted oversight on a range of industry transactions, and calculated and distributed the Risk Equalisation Trust Fund (RETF). PHIAC's supervisory approach was forward looking and risk based, recognising that the board and the management of each insurer are primarily responsible for the soundness of their operations.
PHIAC also provided specialist advice to the Parliament through the Minister for Health, Senate Estimates Committee meetings, individual requests about the operations of the industry and the annual health insurance premium applications.
Private health insurance is a key element in the Australian health system and PHIAC played an important role in protecting the interests of consumers by seeking to ensure that the industry operated soundly. This important role will continue through APRA from 1 July 2015.
Through the PHI Act, PHIAC was required to take all reasonable steps to strike an appropriate balance between three objectives:
- fostering an efficient and competitive health insurance industry;
- protecting the interests of consumers; and
- ensuring the prudential safety of individual insurers.
PHIAC applied the highest standards in meeting those objectives in all areas of its work.
These standards were applied to PHIAC's interactions with the Parliament, the private health insurance industry and consumers, as it sought to demonstrate the core values of the Australian Public Service of impartiality, transparency, commitment to service, respect and integrity.