Insurance Industry in Australia and Acts of Parliament Essay

Insurance Industry in Australia and Acts of Parliament - Essay Example In essence, the insurance industry in Australia offers insurance services to Australians in three major categories, which are: health insurance, life insurance and general insurance. Moreover, the insurance industry in Australia falls under the financial services sector. The above three categories of insurance are regulated by different acts of Parliament. In accordance with Australian pieces of legislation, the major Acts of Parliament that regulate the insurance industry are: (i) The Life Insurance Act (1995), (ii) The Insurance Act 1973 and (iii) The Corporate Act. The government bodies that enforce the above Acts are: â€Å"The Australian Taxation Office (ATO)†, â€Å"The Australian Securities and Investments Commission (ASIC)†, â€Å"The Superannuation Complaints Tribunal (SCT)† and â€Å"The Australian Prudential Regulation Authority (APRA)†. This paper provides a report on how the insurance industry in Australia is regulated by the relevant Acts of Parliament. A law in Australia entails an Act passed by the Federal Parliament as stipulated in the Australian Constitution, Acts passed by Legislative Assemblies and State Parliament, Ordinances created in relation to territories, Australian common law and statute laws (Australian Governement Comlaw 2009: 1). General insurance in Australia The main legislation that regulates general insurance in Australia is â€Å"The Insurance Act 1973 (Cth) (Insurance Act)†. General insurance in Australia is divided into: (i) liability insurance, and (ii) property insurance. A further categorization of liability insurance has the classes of: worker’s compensation, motor insurance (better known as Compulsory Third Party (CPT)), public liability insurance, insurance for business and professional indemnity. In addition, a further categorization of property insurance has the classes of: travel insurance, home and contents insurance, and motor vehicles comprehensive insurance (Gray 2010: 1). Life insurance in Australia In the Australian insurance industry, life insurance is basically divided into the categories of: superannuation investment, life insurance and disability income insurance. The major acts that govern superannuation investment in Australia are: (i) The Superannuation Industry (Supervision) ACT 1993, and (ii) Financial Services Reforms Act 2002. The â€Å"Superannuation Industry (Supervision) Act 1993† is legislation on all the rules of compliance in the insurance industry. In essence, the Act looks into issues that involve: fund accounts and administration, enquiries and complaints, investments, fund management regulation and operation of the vast superannuation funds and setting up penalties for insurers who do not perform in relation to the rules stipulated in the Act. This Act registers all the superannuation trustees in Australian insurance industry. Additionally, all the trustees who seek registration must be qualified in risk management, financial and technology issues and have skills in management profession. On the other hand, the â€Å"Financial Services Reform Act 2002† is an Act that provides standardization in the insurance industry in relation with the financial industry. Essentially, it determines if a license to operate a fund should be given a particular superannuation fund trustee. The major roles of the â€Å"Financial Services Reform Act 2002† are, firstly, providing license to dealers who are to provide insurance services or products; secondly, determine