13AAdditional criteria for approving or refusing a merger or acquisition

13A Additional criteria for approving or refusing a merger or acquisition

(1) For the purposes of subsection 33(5), additional criteria for refusing to approve applications under section 33 are specified in this rule.

(2) If the application is in respect of an arrangement which involves the transfer of policies referable to the health benefits fund of a not‑for‑profit insurer and there is any financial benefit to any person, the criteria for refusal are that the arrangement would result in a financial benefit:

(a) to any person who is not a policy holder of, or another person insured through, the health benefits fund conducted by the transferor insurer; or

(b) being distributed inequitably between policy holders, or another person insured through, the health benefits fund conducted by the transferor insurer; or

(c) not being distributed at all to policy holders of the health benefits fund conducted by the transferor insurer.

(3) If the application is in respect of an arrangement of a kind referred to in subrule 11(6), the criteria for refusal are that:

(a) the transferee insurer has not paid the market value for the transferor insurer's health insurance business; or

(b) if subrule (2) also applies to the transfer, the financial benefit in respect of the transfer does not represent the market value for the transferor insurer's health insurance business.

(4) In considering the market value of the transferor private health insurer’s health insurance business, APRA may have regard to the statement referred to in subrule 11(6) and any other information it thinks fit.

(5) If APRA requests the applicants to amend in a particular way the arrangement that is the subject of the application, it is a criterion for refusal that the applicants fail to amend the arrangement within a time specified by APRA in writing to the applicants.

14. How a merger or acquisition takes effect

(1) If, on the transfer date:

(a) APRA has approved an arrangement; and

(b) the transferor and transferee insurer(s) have:

(i) complied with rules 11 and 12 including, without limitation, subrules 12(2) and 12(3); and

(ii) taken the actions referred to in Schedule 1,

then:

(c) each transferee insurer is substituted for the transferor insurer as the private health insurer for each policy identified in the arrangement as a policy which is to become referable to a receiving fund of the transferee insurer; and

(d) the policy operates on and from the transfer date as if all references in the policy to the transferor insurer were references to the transferee insurer; and

(e) policies referable to the transferring fund(s) become referable to the receiving fund(s) in accordance with the arrangement; and

(f) the liabilities incurred for the purposes of the transferring fund(s), including without limitation the policy liabilities, become treated as incurred for the purposes of the receiving fund(s) in accordance with the arrangement; and

(g) the assets of the transferring fund(s) become assets of the receiving fund(s) in accordance with the arrangements.

Note: Subsection 33(7) of the Act provides that, for the purposes of the Act, an insurance policy that becomes referable to a health benefits fund of the transferee insurer as a result of the arrangement is treated, after the arrangement takes effect, as if it were an insurance policy issued by the transferee insurer.

15. Notification to interested persons of outcome of a section 33 application

(1) If APRA or the Administrative Appeals Tribunal approves an application for approval of an arrangement for a merger or acquisition, then within 20 days of the arrangement taking effect, the private health insurers who made the application must provide to at least one adult insured under each policy, or, for a policy covering no adults, the person who pays the premium, which is being made, or has been made, referable to a receiving fund, a statement of the outcome of the application.

(2) The notification of outcome referred to in subrule (1) may be combined with the statement provided for the purposes of subsection 93‑20(4) of the PHI Act.

(3) If the application for approval of an arrangement is refused by APRA, then no later than 10 days after the time for the lodging of an application for review of APRA’s decision by the Administrative Appeals Tribunal, the insurers must provide to at least one adult insured under each policy, or, or, for a policy covering no adults, the person who pays the premium, which was proposed for transfer, a statement of:

(a) the outcome of the application; and

(b) whether either of the insurers has lodged or intends to lodge an application for review with the Administrative Appeals Tribunal.

(4) If the application for approval of an arrangement is refused on application to the Administrative Appeals Tribunal, then no later than 10 days after the Tribunal’s decision being delivered, the appellant must provide to at least one adult insured under each policy, or, or, for a policy covering no adults, the person who pays the premium, which was proposed for transfer, a statement of the outcome of the application.

Part 5 – Private health insurers to notify APRA about certain matters

16. Notification of current chief executive officer

For section 125 of the Act, a private health insurer must ensure that, if the name or contact details of its chief executive officer change, the change is notified, not more than 28 days after the change takes effect, to APRA, in the approved form.