Insurance in Australia
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Australia has a sophisticated and well developed insurance market considering the small size of its population.
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[edit] Types of insurance
[edit] Life insurance
Life insurance products sold in Australia include Term life insurance, Disability Income insurance. Australian insurers are unusual in providing a lump sum Total and Permanent Disability insurance. Life insurers also sell superannuation investment products.
[edit] General insurance
General insurance products sold in the Australian include:
- Casualty insurance such as Motor Vehicle and Public Liability Insurance;
- Property insurance such as Home and Contents insurance.
Each Australian state has its own form of motor vehicle Compulsory Third Party insurance.
Worker's compensation, while strictly speaking is life insurance, has traditionally been provided by general insurance companies. This compulsory type insurance is subject to extensive state based regulation (including premium rating and reinsurance rules).
[edit] Health Insurance
Due to the Australian Government provided universal health insurance, Medicare, health insurance in Australia is limited to those services not covered by Medicare or to services provided in private hospitals.
[edit] Industry structure
Life Insurers were traditionally mutual companies, but in the 1980s and 1990’s many of them demutualised and with a few large exceptions are owned by banks. The large remaining insurers have become “financial services” organisations and now derive the majority of their revenue from superannuation investment products.
General Insurers have a more diverse ownership structure, with more stand alone independent general insurers (although some life insurers do own general insurers).
Health insurers are still predominantly mutuals. The notable exception is Medibank Private largest private health insurer in Australia which is owned by the Australian Government.
[edit] Regulators / Regulation
see main article Australian insurance law
The prudential aspects of insurance (solvency etc) are regulated by the Australian Prudential Regulatory Authority. Matters relating to advice or disclosure of insurance products sold are regulated by the Australian Securities and Investments Commission.
The primary legislation is:
- Life Insurance Act 1995 (Life Insurance)
- Insurance Act 1973 (General Insurance)
[edit] Industry bodies
The main industry bodies are:
- Insurance Council of Australia
- Investment and Financial Services Association
[edit] See also
- Insurance
- Australian insurance law
- Margin on Services (accounting method for life insurance in Australia)
- Superannuation in Australia
[edit] External links
[edit] References
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