{"id":"C2004A00316","name":"General Insurance Supervisory Levy Imposition Act 1998","slug":"general-insurance-supervisory-levy-imposition-act-1998","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"56 of 1998","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":5950,"registerId":"commonwealth-C2004A00316-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Short title","content":"#### 1 Short title\n\n  This Act may be cited as the General Insurance Supervisory Levy Imposition Act 1998.","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n  (1) This Act commences on the commencement of the Australian Prudential Regulation Authority Act 1998.\n  (2) If this Act commences during a financial year (but not on 1 July of that financial year), this Act has effect in relation to that financial year subject to the modifications specified in the regulations.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Act binds the Crown","content":"#### 3 Act binds the Crown\n\n  This Act binds the Crown in each of its capacities.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"External Territories","content":"#### 4 External Territories\n\n  This Act extends to each external Territory.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Application of Act to Lloyd’s","content":"#### 5 Application of Act to Lloyd’s\n\n  (1) This Act applies to Lloyd’s (within the meaning of section 3 of the Insurance Act 1973), at all times after the commencement of this Act, as if Lloyd’s were a body corporate authorised under that Act to carry on insurance business.\n  (2) For the purpose of this Act, Lloyd’s assets, at a particular time, are taken to be the amounts standing to the credit of all designated security trust funds (within the meaning of Part VII of the Insurance Act 1973) at that time.\n  (3) Nothing in this Act imposes levy on any Lloyd’s underwriter.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Definitions","content":"#### 6 Definitions\n\n  In this Act, unless the contrary intention appears:\n\n> general insurance company means a body corporate that is authorised under the Insurance Act 1973 to carry on insurance business within the meaning of that Act.\n\n> indexation factor means the indexation factor calculated under section 9.\n\n> index number, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.\n\n> levy imposition day, in relation to a general insurance company for a financial year, means:\n\n    (a) if the general insurance company is a general insurance company on 1 July of the financial year—that day; or\n    (b) in any other case—the day, during the financial year, on which the general insurance company becomes a general insurance company.\n\n> special statutory upper limit means:\n\n    (a) for the financial year commencing on 1 July 2006—$500,000; or\n    (b) for a later financial year—the amount calculated by multiplying the special statutory upper limit for the previous financial year by the indexation factor for the later financial year.\n\n> statutory upper limit means:\n\n    (a) for the financial year commencing on 1 July 2020—$10,000,000; or\n    (b) for a later financial year—the amount calculated by multiplying the statutory upper limit for the previous financial year by the indexation factor for the later financial year.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Imposition of general insurance supervisory levy","content":"#### 7 Imposition of general insurance supervisory levy\n\n  Levy payable in accordance with subsection 8(3) of the Financial Institutions Supervisory Levies Collection Act 1998 is imposed.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Amount of levy","content":"#### 8 Amount of levy\n\n  (1AA) The amount of levy payable by a general insurance company for a financial year is the sum of the general component and the special component for the general insurance company for the financial year.\n\n> Note: For general component, see subsections (1) to (2). For special component, see subsection (2A).\n\n  (1) Subject to subsection (2), the general component for a general insurance company for a financial year is the sum of the restricted levy component and the unrestricted levy component for the financial year.\n\n> Note: For restricted levy component, see subsection (1A). For unrestricted levy component, see subsection (1B).\n\n  (1A) The restricted levy component for the financial year is:\n    (a) unless paragraph (b) or (c) applies—the amount that, for the financial year, is the restricted levy percentage of the general insurance company’s levy base; or\n    (b) if the amount worked out under paragraph (a) exceeds the maximum restricted levy amount for the financial year—the maximum restricted levy amount; or\n    (c) if the amount worked out under paragraph (a) is less than the minimum restricted levy amount for the financial year—the minimum restricted levy amount.\n\n> Note: The restricted levy percentage, maximum restricted levy amount, minimum restricted levy amount and the method of working out the general insurance company’s levy base are as determined under subsection (3).\n\n  (1B) The unrestricted levy component for the financial year is the amount that, for the financial year, is the unrestricted levy percentage of the general insurance company’s levy base.\n\n> Note: The unrestricted levy percentage is as determined under subsection (3).\n\n  (2) If the levy imposition day for the general insurance company for the financial year is later than 1 July in the financial year, the general component for the general insurance company for the financial year is the amount worked out using the following formula:\n  ![](image.002.png)\n  (2A) The special component for a general insurance company for a financial year is:\n    (a) nil, if the general insurance company belongs to a class of general insurance company for which no provision is made in the Treasurer’s determination under paragraph (3)(h); or\n    (b) if the general insurance company belongs to a class of general insurance company for which provision is made in the Treasurer’s determination under paragraph (3)(h):\n    (i) unless subparagraph (ii) or (iii) applies—the amount that, for the financial year, is the special levy percentage of the general insurance company’s eligible premium income; or\n    (ii) if the amount worked out under subparagraph (i) exceeds the special maximum levy amount for the financial year—the special maximum levy amount; or\n    (iii) if the amount worked out under subparagraph (i) is less than the special minimum levy amount for the financial year—the special minimum levy amount.\n\n> Note: The special levy percentage, the special maximum levy amount and the special minimum levy amount are as determined under subsection (3).\n\n  (3) The Treasurer is, by legislative instrument, to determine:\n    (a) the maximum restricted levy amount for each financial year; and\n    (b) the minimum restricted levy amount for each financial year; and\n    (c) the restricted levy percentage for each financial year; and\n    (ca) the unrestricted levy percentage for each financial year; and\n    (d) how a general insurance company’s levy base is to be worked out; and\n    (e) the special maximum levy amount for each financial year; and\n    (f) the special minimum levy amount for each financial year; and\n    (g) the special levy percentage for each financial year; and\n    (h) how a general insurance company’s eligible premium income is to be worked out.\n  (4) An amount determined under subsection (3) as the maximum restricted levy amount for a financial year must not exceed the statutory upper limit for the financial year.\n  (4A) An amount determined under subsection (3) as the special maximum levy amount for a financial year must not exceed the special statutory upper limit for the financial year.\n  (5) The Treasurer’s determination under paragraph (3)(d) of how a general insurance company’s levy base is to be worked out is to include, but is not limited to, a determination of the day as at which the general insurance company’s levy base is to be worked out. That day must be:\n    (a) if the general insurance company was a general insurance company at all times from and including 17 March of the previous financial year to and including the following 30 June—a day in the period from and including that 17 March to and including the following 14 April; or\n    (b) if the general insurance company was not a general insurance company at all times from and including 17 March of the previous financial year to and including the following 30 June—the day after that 17 March when the general insurance company became, or becomes, a general insurance company.\n  (6) The Treasurer’s determination under paragraph (3)(h) of how a general insurance company’s eligible premium income is to be worked out is to include, but is not limited to, a determination of:\n    (a) that part of the premium income of a company that is eligible premium income; and\n    (b) the period for which the eligible premium income is to be worked out.\n  (7) A determination under subsection (3) may make different provision for different classes of general insurance company.","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Calculation of indexation factor","content":"#### 9 Calculation of indexation factor\n\n  (1) The indexation factor for a financial year is the number worked out by:\n    (a) ascertaining the index number for the most recent quarter for which the Australian Statistician has published an index number, as at the start of the day on which the Treasurer makes the first determination under subsection 8(3) of an amount or percentage for the financial year; and\n    (b) dividing that index number by the index number for the quarter 12 months before the quarter mentioned in paragraph (a); and\n    (c) adding 0.030 to the number worked out under paragraph (b).\n  (2) The indexation factor is to be calculated to 3 decimal places, but increased by .001 if the 4th decimal place is more than 4.\n  (3) Calculations under subsection (1):\n    (a) are to be made using only the index numbers published in terms of the most recently published index reference period for the Consumer Price Index; and\n    (b) are to be made disregarding index numbers that are published in substitution for previously published index numbers (except where the substituted numbers are published to take account of changes in the index reference period).","sortOrder":8},{"sectionNumber":"10","sectionType":"section","heading":"Regulations","content":"#### 10 Regulations\n\n  The Governor‑General may make regulations for the purposes of subsection 2(2).","sortOrder":9}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"No material change of scope is evident within the supplied text. The Act defines its scope: it applies to bodies corporate authorised under the Insurance Act 1973 described as 'general insurance company' (s6), treats Lloyd’s as if a body corporate for levy purposes but excludes individual underwriters (s5), binds the Crown (s3) and extends to external Territories (s4). Commencement and mid‑year effect adjustments are provided (s2). There is no provision in the text that alters or narrows the Act’s expressly stated coverage."},"complexity_factors":["Multiple interacting levy components (general component = restricted + unrestricted; special component optional) and conditional floors/caps (s8(1AA), s8(1A), s8(1B), s8(2A)).","Wide discretion to the Treasurer to fix key parameters and methods by legislative instrument (restricted/unrestricted percentages, caps, floors, levy base method, eligible premium income method) — creates delegated-rule complexity and variation by year and class (s8(3), s8(7)).","Caps and special caps limited by statutory upper limits which are themselves indexed (statutory upper limit and special statutory upper limit definitions; s6; s8(4), s8(4A)).","Timing rules for levy imposition day and determination of the day for calculating a company’s levy base introduce pro rata and transitional calculations (s6 definition of levy imposition day; s8(2), s8(5)).","Dependence on an external collection mechanism (reference to Financial Institutions Supervisory Levies Collection Act 1998 s8(3) in s7) increases cross‑legislative interaction.","Indexation calculation has specific CPI sourcing, an added 0.030 adjustment, and rounding rules — numerical precision matters (s9(1)–(3)).","Special treatment for Lloyd’s (treated as body corporate with assets from designated security trust funds; underwriters not levied) creates sectoral nuance (s5(1)–(3)).","Commencement and mid‑year-start modifications may alter application within a financial year, requiring delegated regulations (s2(1)–(2); s10)."],"plain_english_summary":"Imposes an annual supervisory levy on Australian general insurance companies. Each company’s levy is the sum of a general component (restricted and unrestricted parts) and, when applicable, a special component tied to eligible premium income. The Treasurer determines percentages, caps, floors and the methods for calculating levy bases by legislative instrument. Caps are indexed to CPI with an added 3% factor. The Act applies to Lloyd’s assets (not individual underwriters), binds the Crown and extends to external territories."},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":true,"description":"The original 1998 Act appears to have been a simpler levy imposition mechanism. The current version shows significant expansion through amendments: (1) introduction of a 'special component' levy (subsection 8(2A)) with its own separate calculation methodology; (2) bifurcation of the general component into 'restricted' and 'unrestricted' parts (subsections 8(1A)-(1B)); (3) addition of statutory upper limits with indexation (section 6 definitions for 'statutory upper limit' and 'special statutory upper limit'); and (4) the 3% fixed addition to CPI in the indexation formula (section 9(1)(c)), which ensures levy caps grow faster than pure inflation. These changes suggest the legislation has evolved from a basic cost-recovery mechanism to a more sophisticated, multi-tiered funding system with differentiated treatment of insurer classes."},"complexity_factors":["Nested calculation structure: levy = general component + special component; general component = restricted + unrestricted; each with their own percentage calculations, caps, and floors","Multiple interdependent defined terms (8 defined terms in section 6, with 'indexation factor' requiring its own calculation methodology in section 9)","Conditional logic throughout: 4 different formulas for determining levy imposition day; 3-tier conditional logic for restricted levy component (paragraphs 8(1A)(a)-(c)); 4-tier conditional logic for special component (subsection 8(2A))","External references: relies on Insurance Act 1973 for definitions of 'general insurance company' and Lloyd's provisions; Financial Institutions Supervisory Levies Collection Act 1998 for collection mechanism","Delegated legislative power: Treasurer determines 8 separate variables (subsection 8(3)) with constraints (subsections 8(4), (4A), (5), (6))","Mathematical complexity: indexation factor calculation involves CPI quarter comparisons, division, addition of fixed 0.030, and specific rounding rules (3 decimal places with rounding up)","Temporal complexity: multiple date-dependent rules for levy base calculation day (subsection 8(5)) and pro-rata formula for mid-year entrants (subsection 8(2))","Class-based differentiation: Treasurer can set different rates for different classes of insurers (subsection 8(7))"],"plain_english_summary":"This law sets up a system for charging **general insurance companies** (businesses authorised to sell insurance in Australia) an annual fee called a **supervisory levy**. This money funds the Australian Prudential Regulation Authority (APRA), which oversees and regulates these insurers to make sure they remain financially stable and can pay out claims.\n\n**Key points:**\n\n- **Who pays:** General insurance companies operating in Australia, including Lloyd's of London (treated as if it were a single corporate body, though individual underwriters at Lloyd's don't pay directly).\n- **How much:** The levy has two parts:\n  - **General component:** Made up of a \"restricted\" part (capped and floored) and an \"unrestricted\" part (no caps), both calculated as percentages of the company's \"levy base\" (a financial measure determined by the Treasurer).\n  - **Special component:** An extra charge for certain classes of insurers, calculated as a percentage of their eligible premium income (also with caps and floors).\n- **Who decides the rates:** The **Treasurer** sets the specific percentages, caps, floors, and calculation methods each year through a legislative instrument (a formal government decision).\n- **Inflation adjustment:** The maximum amounts the Treasurer can set automatically increase each year based on the Consumer Price Index (CPI) plus 3%.\n- **Timing:** Companies that start operating mid-year pay a pro-rata (reduced) amount based on when they began.\n\n**Why it matters:** This ensures Australia's insurance industry contributes to its own regulation, with larger and more complex insurers generally paying more. The system is designed to be flexible so the government can adjust rates annually without needing to pass new laws each time."},"summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The Act remains focused on its original purpose: imposing a supervisory levy on general insurance companies to fund APRA oversight. Amendments over time have added the special component and inflation-indexing mechanisms, but these are refinements to the funding model rather than a change in scope. The core subject matter — who pays, why, and with what caps — is consistent with the original intent."},"complexity_factors":["Multi-layered levy calculation with two distinct components (general and special), each with their own sub-components (restricted and unrestricted levy components)","Numerous interacting variables set by Treasurer determination rather than fixed in the Act itself, requiring reference to external legislative instruments","Inflation-adjustment mechanism using CPI indexation with a specific formula and rounding rules","Different treatment for companies that commence mid-financial year, requiring pro-rata calculations via a formula referenced by image (not reproduced in text)","Special treatment of Lloyd's of London requiring deemed corporate status and a specific definition of 'assets'","Multiple cross-references to other Acts (Insurance Act 1973, Financial Institutions Supervisory Levies Collection Act 1998, APRA Act 1998)","Class-based differentiation allowing the Treasurer to set different rates for different categories of insurer","Specific date-sensitive rules for determining a company's levy base (the 17 March to 14 April window)"],"plain_english_summary":"This Act requires authorised general insurers (including Lloyd’s of London treated as an entity) to pay an annual supervisory levy that funds APRA’s oversight. It applies across Australia and territories and can indirectly affect insurance premiums.\n\nThe Treasurer sets the levy each year; it comprises a general charge tied to an insurer’s levy base and a special charge linked to premium income, both subject to CPI‑indexed caps and proportional reductions for insurers operating part of the year."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/general-insurance-supervisory-levy-imposition-act-1998","history":"/api/acts/general-insurance-supervisory-levy-imposition-act-1998/history","analysis":"/api/acts/general-insurance-supervisory-levy-imposition-act-1998/analysis","conflicts":"/api/acts/general-insurance-supervisory-levy-imposition-act-1998/conflicts","importantCases":"/api/acts/general-insurance-supervisory-levy-imposition-act-1998/important-cases","documents":"/api/acts/general-insurance-supervisory-levy-imposition-act-1998/documents"}}