Financial services providers – including life and general insurers – will pay nearly $68 million in levies to keep the regulators running in 2001/02.

The total levy is about $7 million more than the Federal Government raised in 2000/01. The levies cover the supervisory costs of prudentially regulated financial institutions, paying the operational costs of APRA and the consumer protection and market integrity functions of ASIC and the ATO.

Announcing the new imposts last week, Financial Services and Regulation Minister Joe Hockey said part of the increase “reflects an increase in APRA’s operating costs”.

Under the new rates, life insurers will each pay a maximum of $280,000 each (a 0.02% levy on the value of assets), and general insurers $240,000 (0.025%).

It might cost more to operate, but APRA found itself under fire in a parliamentary inquiry last week for not using the funding it already has available. The Senate Inquiry into Superannuation and Financial Services was told that APRA scaled down its actuarial scrutiny of insurance companies three years ago to save $60,000.

Former government actuary Craig Thorburn said his office stopped producing regular reports on all insurers three years ago, concentrating its efforts on “high-risk” companies instead. This decision allowed APRA to cut one middle-level public service position, saving about $60,000 a year.