Only a private health insurer may carry on health insurance business. A private health insurer is a company that is registered under Division 3 of Part 2.

A private health insurer must have at least one health benefits fund. There are regimes governing:

       (a)     how health benefits funds are operated; and

      (b)     changing the health benefits fund to which a policy of insurance is referable; and

       (c)     terminating health benefits funds; and

      (d)     external management of health benefits funds.

Private health insurers must comply with prudential standards made by APRA, and with directions given by APRA.

Private health insurers and their appointed actuaries also have various other obligations.

APRA has monitoring and investigative powers in relation to private health insurers.

APRA may accept enforceable undertakings, and may seek remedies in the Federal Court in relation to contraventions of enforceable obligations.

Note:       The Private Health Insurance Act 2007 defines the key concepts of health insurance business and health benefits funds as well as other concepts that relate to health benefits funds. That Act also sets out rules governing private health insurance products and provides incentives to encourage people to have private health insurance.