I, BILL SHORTEN, Minister for Financial Services and Superannuation, make this Determination under subsection 8 (3) of the General Insurance Supervisory Levy Imposition Act 1998.

Dated 23 June 2011

BILL SHORTEN

Minister for Financial Services and Superannuation

1 Name of Determination

  This Determination is the General Insurance Supervisory Levy Imposition Determination 2011.

2 Commencement

  This Determination commences on the day after it is registered.

3 Revocation

  The General Insurance Supervisory Levy Imposition Determination 2010 is revoked on 1 July 2011.

4 Interpretation

 (1) In this Determination:

2011–2012 financial year means the financial year commencing on 1 July 2011.

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.

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.

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 2011 to 30 June 2011 — 31 March 2011; and

 (b) for a general insurance company that was a general insurance company for some, but not all, of the period from 17 March 2011 to 30 June 2011 — the day, after 17 March 2011, on which it became a general insurance company; and

 (c) for a general insurance company that became a general insurance company after 30 June 2011 — 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  

  For paragraphs 8 (3) (a), (b), (c) and (ca) of the Act, the table sets out matters for the 2011–2012 financial year.

6 General insurance company’s levy base

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

 (2) The general insurance company’s levy base of Lloyd’s is the value of the amounts standing to the credit of all designated security trust funds as at 31 March 2011.

 (3) If the general insurance company was not a foreign general insurer on the valuation day, the general insurance company’s levy base 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, the general insurance company’s levy base 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).

7 Special component

 (1) For paragraphs 8 (3) (e), (f) and (g) of the Act, the table sets out matters for the 2011–2012 financial year in relation to the general insurance companies covered by the table.

 (2) In the table:

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 2010 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 2010 calendar year; and

 (ii) did not carry on public liability insurance during the 2010 calendar year; and

 (iii) did not carry on product liability insurance during the 2010 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.

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 2010 calendar year; and

 (ii) did not carry on professional indemnity insurance during the 2010 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 2010 calendar year; and

 (ii) carried on professional indemnity insurance during the 2010 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.

8 Eligible premium income

 (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 2010 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 2010 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 2010 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 2010 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 2010 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 2010 and 31 December 2010, 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 using the formula:

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 2010 and 31 December 2010, where the class of business reported in the column headed ‘Class of Business’ (and referred to as ‘field 2’) is ‘Public & Product’ (‘PL’).

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 2010 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 2010 and 31 December 2010 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 using the formula:

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 2010 and 31 December 2010, 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.

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.