AGY-1090 | Government Insurance Office (1926-1990) GIO Australia (1990-1991)

Full description

The Government Insurance Office (GIO) came into existence on 1 July 1926 upon the commencement of the Workers' Compensation Act, 1926 (Act No.15 1926), and provided a medium through which officers of the Public Service could take out the obligatory fidelity guarantee policies. Contribution questions as to the authority under which the Office was functioning were settled by the introduction of the Government Insurance (Enabling and Validating) Act, Act No.18 1927, in February 1927. In 1941 the Government Insurance (Amendment) Act (Act No.62, 1941) established the Government Insurance Office as a corporate body with power to carry on the general business of insurance, including any class or form of insurance. The Act commenced on 25 November 1941. The Government Insurance Office was now in open competition with private insurance companies.

Prior to 1984 third party insurance was regulated by the Motor Vehicles (Third Party Insurance) Act, 1942 (Act No.15, 1942). Compulsory third party insurance was initially provided by a number of insurers, but by the early 1980s almost all of this type of insurance was provided by the Government Insurance Office. (1) The Motor Vehicles (Third Party Insurance) Amendment Act, 1984 (Act No.86, 1984) changed the funding arrangements for third party insurance, making the GIO the sole administrator of the third party scheme.

The Motor Accidents Act, 1988 (Act No.102, 1988) provided for an initial 'privatisation' of third party insurance to a number of licensed insurers and the subsequent deregulation of Compulsory Third Party insurance premiums after a phasing in period of two years.

The Government Insurance (Amendment) Act 1985 (Act No.95, 1985) allowed the GIO to have subscribed capital and to pay dividends determined by Treasury in consultation with the Board. The GIO had then become a statutory body free from Commonwealth income tax, sales tax, and stamp duty. It paid the equivalent of these government levies to the New South Wales Government. (2) In 1990 GIO changed its name to GIO Australia. In this year GIO Australia underwrote single premiums worth $461 million, held assets of $8 billion, and was ranked seventh in the life insurance market, and eighth in the annuity market. (3)

The Government Insurance Office (Privatisation) Act, 1991 (Act No.38, 1991) directed the privatisation process. On 1 January 1992, GIO Australia became GIO Australia Holdings Ltd, changing the organisation from a statutory authority to an incorporated company whose share capital was held by the New South Wales Government. GIO Australia Holdings Ltd's shares were traded on the Stock Exchange for the first time on 23 July 1992.

FOOTNOTES

(1) Annual Report of the Motor Accidents Authority of New South Wales for the year ended 30 June 1990, p.16.
(2) Casey, Anthony & Dolley, Brian 'The Privatisation of GIO Australia: Success or Failure?', Australian Journal of Public Administration, Volume 55, No. 3, September 1996, p.18.
(3) Ibid., p.19.