Life insurance corporations offer termination insurance and investment policies. Termination insurance includes the payment of a sum of money on the death of the insured or on the insured receiving a permanent disability. Investment products include annuities and superannuation plans. The life insurance industry in Australia consists of 42 direct insurers, including six reinsurers. As with the banking industry, the life insurance industry is dominated by a few very large companies holding a majority of the industry's assets.
Life insurance companies are supervised by the APRA under the Life Insurance Act 1995 (Cwlth).
Table 26.6 shows the financial assets and liabilities arising from both policyholder and shareholder investment in life insurance corporations.
26.6 LIFE INSURANCE CORPORATIONS, Financial assets and liabilities
|
 | Amounts outstanding at 30 June |
|
|
| 2000 | 2001 | 2002 |
| $m | $m | $m |
|
FINANCIAL ASSETS |
|
| Currency and deposits | 12,524 | 13,123 | 11,760 |
| Bills of exchange | 3,810 | 4,693 | 4,031 |
| One name paper | 14,002 | 10,389 | 12,212 |
| Bonds | 45,070 | 41,074 | 37,891 |
| Derivatives | 119 | 28 | 359 |
| Loans and placements | 10,375 | 9,235 | 6,097 |
| Equities | 100,336 | 110,404 | 113,762 |
| Other accounts receivable | 5,469 | 5,551 | 8,864 |
| Total | 191,705 | 194,497 | 194,976 |
|
LIABILITIES |
|
| Bills of exchange | - | - | 36 |
| One name paper issued offshore | - | 674 | 431 |
| Bonds etc. issued in Australia | 1,240 | 1,115 | 1,104 |
| Bonds etc. issued offshore | 1,327 | 1,261 | 1,012 |
| Derivatives | 295 | 371 | - |
| Loans and placements | 4,885 | 4,914 | 3,695 |
| Listed and unlisted equity | 38,091 | 46,192 | 36,723 |
| Net equity in reserves | 60,410 | 53,518 | 53,337 |
| Net equity of pension funds | 108,079 | 116,070 | 117,729 |
| Other accounts payable | 4,170 | 4,879 | 5,477 |
| Total | 218,497 | 228,994 | 219,544 |
|
| Source: Australian National Accounts: Financial Accounts (5232.0). |
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