13Assessment of initial contribution amount

13 Assessment of initial contribution amount

13 Assessment of initial contribution amount

(1) The initial contribution amount payable by an insurer for a financial year is the amount determined by the Chief Commissioner in accordance with the following formula—

where—

It is the initial contribution amount payable by an insurer for the financial year (represented by “t”).

Ct is the contribution target for the financial year (represented by “t”).

P(t-2) is the total amount of premiums of the insurer subject to contribution in the financial year that commenced 2 years before the period “t” (represented by “t-2”).

T(t-2) is the total amount of premiums of all insurers subject to contribution in the financial year that commenced 2 years before the period “t” (represented by “t-2”).

(2) The Chief Commissioner may, instead of determining the initial contribution amount as provided for by subsection (1), estimate the final contribution amount that is reasonably likely to be payable by the insurer for the financial year. In that case, that estimate is the initial contribution amount payable by the insurer for the financial year.

(3) Subsection (2) applies only if the insurer was not required to pay a contribution in the financial year that commenced 2 years before the financial year for which the determination is made.

(4) An assessment that is made under subsection (2) does not affect the determination of the initial contribution amount for other insurers who are assessed in accordance with subsection (1).

Note—

An assessment under subsection (2) may result in the total of all initial contribution amounts exceeding the contribution target for the financial year, but when final assessments are made any over-collection amounts are refunded to insurers.

(5) The initial contribution amount is to be rounded down to the nearest whole dollar amount.