32Restructure of health benefits funds

#### 32 Restructure of health benefits funds When an insurer may restructure its health benefits funds (1) A private health insurer may restructure its health benefits funds so that insurance policies that are referable to a health benefits fund (a transferring fund) of the insurer become referable to one or more other health benefits funds (receiving funds) of the insurer (whether existing or proposed) if: (a) the insurance policies concerned are all of the policies that, immediately before the restructure, were referable to the transferring fund and belonged to one or more policy groups of that fund; and (b) the insurer applies to APRA, in the approved form, for approval of the restructure; and (c) APRA approves the restructure in writing; and (d) the insurer complies with any requirements imposed on the insurer in relation to the restructure by APRA rules made for the purpose of this paragraph. How APRA decides whether to approve the restructure (2) Subject to subsection (4), APRA must approve the restructure if it is satisfied that: (a) the assets and liabilities that would be transferred to the receiving fund or funds represent a reasonable estimate of what would, immediately before the restructure, be the net asset position of the transferring fund; and (b) if there is more than one receiving fund—those assets and liabilities would be fairly distributed between the receiving funds; and (c) the restructure will not result in any contravention of prudential standards. (3) For the purposes of paragraph (2)(a), in working out the net asset position of the transferring fund, disregard the net asset position of the fund to the extent that it relates to insurance policies that do not belong to a policy group referred to in paragraph (1)(a). (4) APRA must not approve the restructure if: (a) it considers that the restructure will result in unfairness to the policy holders of a health benefits fund of the insurer as that fund exists immediately before the restructure, when those policy holders are viewed as a group; or (b) it considers that the restructure will result in unfairness to the persons who would be policy holders of a health benefits fund of the insurer as that fund would exist immediately after the restructure, when those persons are viewed as a group; or (c) the insurer is being wound up when the application is made. > Note: Refusals to approve restructures are reviewable under section 168. APRA rules may provide for various matters (5) APRA rules may provide for the following: (a) criteria for the approval of applications under subsection (1); (b) how to work out reasonable estimates of the kind referred to in paragraph (2)(a); (c) criteria for deciding under paragraph (2)(b) whether assets and liabilities would be fairly distributed; (d) requirements to notify interested persons of the outcomes of such applications; (e) matters connected with how restructures take place, including the following: (i) insurance policies becoming referable to a receiving fund or funds; (ii) policy liabilities and other liabilities incurred for the purposes of a transferring fund becoming treated as policy liabilities and other liabilities incurred for the purposes of a receiving fund or funds; (iii) assets of a transferring fund becoming assets of a receiving fund or funds; (iv) the timing of restructures; (v) if a receiving fund is a proposed new health benefits fund—the establishment of that fund; (f) requirements for private health insurers to give APRA information following restructures. Approval is not a legislative instrument (6) An approval under this section is not a legislative instrument. Definition (7) A policy group of a health benefits fund, is all of the insurance policies: (a) that are referable to the fund; and (b) the addresses of the policy holders of which, as known to the private health insurer conducting the fund, are located in the same risk equalisation jurisdiction. APRA rules may provide for how to work out the policy group for a policy that has 2 or more holders whose addresses are not all located in the same risk equalisation jurisdiction.