Australia Insurance

The insurance market in Australia is made up of three components. These are life insurance, health insurance, and general insurance. Most Australian insurance agencies only cover one of these three components, although there are agencies that branch out to offer coverage on two or all categories. Life insurance includes disability income insurance, term life insurance, and superannuation investment products. Health insurance is basically covered by the Australian government through Medicare. There are private insurance agencies in Australia that offer certain policies not covered by Medicare. General insurance comes in two classes: property insurance and liability insurance.

Throughout the 1980's and 1990's, most of the Australian insurance agencies in life insurance were mutual companies. While most of these insurers demutualised, there are some exceptions owned by banks. Because of their nature, most of these large Australian insurance companies turned into organisations which offer financial services such as products in superannuation investment. Health insurers are mostly made up of mutuals, except for the government owned Medibank Private, which is the largest insurance company in Australia that is privately owned. General insurers are composed mostly of independent Australian insurance companies.

Because of the role of the government, the Australian insurance system can be more complex than those in other countries. Another factor that adds to the complexity of Australian insurance is the superannuation pension system. Basically, the Australia insurance system is comprised of government and privately owned insurers, which are all regulated by the Australian insurance law. Some of the organisations that have regulatory roles in Australian insurance include the Australian Prudential Regulatory Authority (APRA), the Private Health Insurance Administration Council (PHIAC), and the Australian Securities and Investments Commission.

There are three pieces of legislation that regulate Australian insurance. First is the Insurance Act of 1973, which has to do with general insurance. Second is the Insurance Contracts Act of 1984, which regulates contracts and policies. Finally, there is the Life Insurance Act of 1995. Under the Australian Constitution, the Commonwealth Parliament reserves the authority to make laws pertaining to insurance. In addition, state governments have their own legislation that shapes the Australian insurance system of each state.

The advantage of Australian insurance is the ability to consolidate such factors as superannuation funds with insurance policies. Another advantage is that insurance in Australia is highly regulated by both the Commonwealth Government and state governments. The government is required to provide health insurance, and the government requires employers to provide superannuation funds to employees.