{"id":"F2010L02331","name":"Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2010 - GRS 310 (2010) - Revenue, Expenses and Statement of Financial Performance","slug":"financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"repealed","isInForce":false,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":125108,"registerId":"commonwealth-F2010L02331-current","compilationNumber":null,"startDate":"2026-04-03","status":"Repealed","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Reporting Standard GRS 310 (2010)","sectionType":"part","heading":"Reporting Standard GRS 310 (2010)","content":"## Reporting Standard GRS 310 (2010)","sortOrder":0},{"sectionNumber":"Statement of Financial Performance","sectionType":"part","heading":"Statement of Financial Performance","content":"# Statement of Financial Performance\n\n### Objective of this reporting standard\n\nThis reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act). It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, information on their:\n\n(a) premium revenue and reinsurance expense;\n\n(b) claims expense and reinsurance recoveries;\n\n(c) investment and operating income and expenses; and\n\n(d) financial and operational performance.\n\nThis reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:\n\n1.  Form GRF 310.0 Statement of Financial Performance (Form GRF 310.0)\n\n(a) for insurers the version designated for a ‘Licensed Insurer’; or\n\n(b) for foreign insurers the version designated for ‘Branch Total Operations’;\n\nand the instructions to the forms (which are attached and all form part of this reporting standard);\n\n2. Form GRF 310.1 Premium Revenue and Reinsurance Expense (Form GRF 310.1) and the instructions to that form (which are attached and form part of this reporting standard)\n\n3. Form GRF 310.2 Claims Expense and Reinsurance Recoveries (Form GRF 310.2) and the instructions to that form (which are attached and form part of this reporting standard)\n\n4. Form GRF 310.3 Investment and Operating Income and Expense, Underwriting expenses and acquisition costs (Form GRF 310.3) and the instructions to that form (which are attached and form part of this reporting standard); and\n\n5. any prudential standards referenced in the attached instructions.\n\n# Purpose\n\n1.  Data collected in Forms GRF 310.0, GRF 310.1, GRF 310.2 and GRF 310.3 is used by APRA for the purpose of prudential supervision of insurers.\n\n# Application and commencement\n\n2. This reporting standard applies to all insurers for reporting periods ending on or after the date of registration of the reporting standard on the Federal Register of Legislative Instruments.\n\n# Information required\n\n3. An insurer must provide APRA with the information required by the version of Form GRF 310.0 designated for a ‘Licensed Insurer’ and GRF 310.1, GRF 310.2 and GRF 310.3 for each reporting period.\n\n4. A foreign insurer must provide APRA with the information required by the version of Form GRF 310.0 designated for ‘Branch Total Operations’ and GRF 310.1, GRF 310.2 and GRF 310.3 for each reporting period.\n\n# Forms and method of submission\n\n5. The information required by this reporting standard must be given to APRA either:\n\n(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or\n\n(b) by manually completing Forms GRF 310.0, GRF 310.1, GRF 310.2 and GRF 310.3 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.\n\nWhere the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).\n\nNote: the Direct to APRA application software and paper forms may be obtained from APRA.\n\n# Reporting periods and due dates\n\n6. Subject to paragraph 7, an insurer must provide the information required by this reporting standard:\n\n(a) in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and\n\n(b) in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.\n\nNote: The annual information required by paragraphs 3 and 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act). This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.\n\n7. APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular insurer to require it to provide the information:\n\n(a) more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or\n\n(b) less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).\n\n8. The information required by paragraphs 3 and 4 of this reporting standard from a locally-incorporated insurer or a foreign insurer must be provided to APRA by the following times:\n\n(a) in the case of the quarterly information required by subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and\n\n(b) in the case of the annual information required by subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.\n\nNote: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards. The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts. Accordingly, the auditor’s certificate relating to the annual information required by paragraphs 3 and 4 read with subparagraph 6(b) must be provided to APRA by the time specified in subparagraph 8(b) of this reporting standard (unless an extension is granted under paragraph 9).\n\n9. APRA may grant an insurer an extension of a due date in writing, in which case the new due date for the provision of the information will be the date specified in the notice of extension.\n\n# Quality control\n\n10. The information provided by an insurer under this reporting standard must be the product of processes and controls that have been reviewed and tested by the appointed auditor of the insurer. This will require the auditor to review and test the systems, processes and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable. This review and testing must be done on an annual basis or more frequently if necessary to enable the appointed auditor to form an opinion on the accuracy and reliability of the data.\n\n11. The information provided by an insurer under this reporting standard must be subject to processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.\n\n# Authorisation\n\n12. If the officer of an insurer provides the information required by this reporting standard:\n\n(a) under subparagraph 5(a), the officer must digitally sign, authorise and encrypt the information (for which purpose APRA’s certificate authority will issue digital certificates, for use with the ‘Direct to APRA’ application, to officers of the insurer who have authority from the insurer to transmit data to APRA); or\n\n(b) under subparagraph 5(b), the completed form must be signed in accordance with paragraph 13.\n\n13. If an insurer provides the information required by this reporting standard through an agent under either subparagraphs 5(a) or (b), the agent will not be required to sign or authorise the information. However, the insurer must:\n\n(a) obtain from the agent paper copies of the completed forms as provided to APRA (under either subparagraph 5(a) or (b)); and\n\n(b) cause the paper copies to be signed in accordance with paragraph 14; and\n\n(c) lodge the signed paper copies with APRA by mailing the completed forms to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales, by the relevant due date (unless APRA, in writing, waives the requirement in relation to the insurer to lodge the signed paper copies with APRA).\n\nNote: APRA may, for example, decide to waive the requirement under subparagraph 13(c) where an insurer has undertaken to retain the signed copies of the completed forms for an agreed period of time.\n\n14. If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed forms by either:\n\n(a) the Principal Executive Officer of the insurer; or\n\n(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).\n\n# Minor alterations to forms and instructions\n\n15. APRA may make minor variations to the instructions to a form, to clarify their application to the form provided it does not involve changing any substantive requirement in the form or instructions.\n\n> 16. If APRA makes such a variation it must notify insurers of this in writing.\n\nTransition\n\n> 17. An insurer must report in relation to a reporting period ending prior to 1 July 2010 in accordance with the reporting standards that this reporting standard replaced.\n\nInterpretation\n\n18. In this reporting standard:\n\nappointed auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;\n\nbusiness days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;\n\ncapital standards means the prudential standards which relate to capital adequacy as defined in Prudential Standard GPS 001 Definitions;\n\nforeign insurer means a foreign general insurer within the meaning of the Insurance Act;\n\nNote: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.\n\nInsurance Act means the Insurance Act 1973;\n\ninsurer means a general insurer within the meaning of the Insurance Act;\n\nNote: In the forms and instructions, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.\n\n# Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;\n\nreporting period means a period mentioned in subparagraph 6(a) or (b) or, if applicable, paragraph 7.\n\n19. A reference to a prudential standard means the prudential standard, made under section 32 of the Insurance Act, mentioned in the reference, as amended from time to time. If the prudential standard has been revoked and replaced, the reference shall be taken to be to the prudential standard that has replaced it.","sortOrder":1},{"sectionNumber":"Objective of this reporting standard","sectionType":"division","heading":"Objective of this reporting standard","content":"### Objective of this reporting standard\n\nThis reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act). It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, information on their:\n\n(a) premium revenue and reinsurance expense;\n\n(b) claims expense and reinsurance recoveries;\n\n(c) investment and operating income and expenses; and\n\n(d) financial and operational performance.\n\nThis reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:\n\n1.  Form GRF 310.0 Statement of Financial Performance (Form GRF 310.0)\n\n(a) for insurers the version designated for a ‘Licensed Insurer’; or\n\n(b) for foreign insurers the version designated for ‘Branch Total Operations’;\n\nand the instructions to the forms (which are attached and all form part of this reporting standard);\n\n2. Form GRF 310.1 Premium Revenue and Reinsurance Expense (Form GRF 310.1) and the instructions to that form (which are attached and form part of this reporting standard)\n\n3. Form GRF 310.2 Claims Expense and Reinsurance Recoveries (Form GRF 310.2) and the instructions to that form (which are attached and form part of this reporting standard)\n\n4. Form GRF 310.3 Investment and Operating Income and Expense, Underwriting expenses and acquisition costs (Form GRF 310.3) and the instructions to that form (which are attached and form part of this reporting standard); and\n\n5. any prudential standards referenced in the attached instructions.","sortOrder":2},{"sectionNumber":"Purpose","sectionType":"part","heading":"Purpose","content":"# Purpose\n\n1.  Data collected in Forms GRF 310.0, GRF 310.1, GRF 310.2 and GRF 310.3 is used by APRA for the purpose of prudential supervision of insurers.","sortOrder":3},{"sectionNumber":"Application and commencement","sectionType":"part","heading":"Application and commencement","content":"# Application and commencement\n\n2. This reporting standard applies to all insurers for reporting periods ending on or after the date of registration of the reporting standard on the Federal Register of Legislative Instruments.","sortOrder":4},{"sectionNumber":"Information required","sectionType":"part","heading":"Information required","content":"# Information required\n\n3. An insurer must provide APRA with the information required by the version of Form GRF 310.0 designated for a ‘Licensed Insurer’ and GRF 310.1, GRF 310.2 and GRF 310.3 for each reporting period.\n\n4. A foreign insurer must provide APRA with the information required by the version of Form GRF 310.0 designated for ‘Branch Total Operations’ and GRF 310.1, GRF 310.2 and GRF 310.3 for each reporting period.","sortOrder":5},{"sectionNumber":"Forms and method of submission","sectionType":"part","heading":"Forms and method of submission","content":"# Forms and method of submission\n\n5. The information required by this reporting standard must be given to APRA either:\n\n(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or\n\n(b) by manually completing Forms GRF 310.0, GRF 310.1, GRF 310.2 and GRF 310.3 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.\n\nWhere the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).\n\nNote: the Direct to APRA application software and paper forms may be obtained from APRA.","sortOrder":6},{"sectionNumber":"Reporting periods and due dates","sectionType":"part","heading":"Reporting periods and due dates","content":"# Reporting periods and due dates\n\n6. Subject to paragraph 7, an insurer must provide the information required by this reporting standard:\n\n(a) in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and\n\n(b) in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.\n\nNote: The annual information required by paragraphs 3 and 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act). This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.\n\n7. APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular insurer to require it to provide the information:\n\n(a) more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or\n\n(b) less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).\n\n8. The information required by paragraphs 3 and 4 of this reporting standard from a locally-incorporated insurer or a foreign insurer must be provided to APRA by the following times:\n\n(a) in the case of the quarterly information required by subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and\n\n(b) in the case of the annual information required by subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.\n\nNote: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards. The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts. Accordingly, the auditor’s certificate relating to the annual information required by paragraphs 3 and 4 read with subparagraph 6(b) must be provided to APRA by the time specified in subparagraph 8(b) of this reporting standard (unless an extension is granted under paragraph 9).\n\n9. APRA may grant an insurer an extension of a due date in writing, in which case the new due date for the provision of the information will be the date specified in the notice of extension.","sortOrder":7},{"sectionNumber":"Quality control","sectionType":"part","heading":"Quality control","content":"# Quality control\n\n10. The information provided by an insurer under this reporting standard must be the product of processes and controls that have been reviewed and tested by the appointed auditor of the insurer. This will require the auditor to review and test the systems, processes and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable. This review and testing must be done on an annual basis or more frequently if necessary to enable the appointed auditor to form an opinion on the accuracy and reliability of the data.\n\n11. The information provided by an insurer under this reporting standard must be subject to processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.","sortOrder":8},{"sectionNumber":"Authorisation","sectionType":"part","heading":"Authorisation","content":"# Authorisation\n\n12. If the officer of an insurer provides the information required by this reporting standard:\n\n(a) under subparagraph 5(a), the officer must digitally sign, authorise and encrypt the information (for which purpose APRA’s certificate authority will issue digital certificates, for use with the ‘Direct to APRA’ application, to officers of the insurer who have authority from the insurer to transmit data to APRA); or\n\n(b) under subparagraph 5(b), the completed form must be signed in accordance with paragraph 13.\n\n13. If an insurer provides the information required by this reporting standard through an agent under either subparagraphs 5(a) or (b), the agent will not be required to sign or authorise the information. However, the insurer must:\n\n(a) obtain from the agent paper copies of the completed forms as provided to APRA (under either subparagraph 5(a) or (b)); and\n\n(b) cause the paper copies to be signed in accordance with paragraph 14; and\n\n(c) lodge the signed paper copies with APRA by mailing the completed forms to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales, by the relevant due date (unless APRA, in writing, waives the requirement in relation to the insurer to lodge the signed paper copies with APRA).\n\nNote: APRA may, for example, decide to waive the requirement under subparagraph 13(c) where an insurer has undertaken to retain the signed copies of the completed forms for an agreed period of time.\n\n14. If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed forms by either:\n\n(a) the Principal Executive Officer of the insurer; or\n\n(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).","sortOrder":9},{"sectionNumber":"Minor alterations to forms and instructi","sectionType":"part","heading":"Minor alterations to forms and instructions","content":"# Minor alterations to forms and instructions\n\n15. APRA may make minor variations to the instructions to a form, to clarify their application to the form provided it does not involve changing any substantive requirement in the form or instructions.\n\n> 16. If APRA makes such a variation it must notify insurers of this in writing.\n\nTransition\n\n> 17. An insurer must report in relation to a reporting period ending prior to 1 July 2010 in accordance with the reporting standards that this reporting standard replaced.\n\nInterpretation\n\n18. In this reporting standard:\n\nappointed auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;\n\nbusiness days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;\n\ncapital standards means the prudential standards which relate to capital adequacy as defined in Prudential Standard GPS 001 Definitions;\n\nforeign insurer means a foreign general insurer within the meaning of the Insurance Act;\n\nNote: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.\n\nInsurance Act means the Insurance Act 1973;\n\ninsurer means a general insurer within the meaning of the Insurance Act;\n\nNote: In the forms and instructions, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.","sortOrder":10},{"sectionNumber":"Principal Executive Officer means the pr","sectionType":"part","heading":"Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;","content":"# Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;\n\nreporting period means a period mentioned in subparagraph 6(a) or (b) or, if applicable, paragraph 7.\n\n19. A reference to a prudential standard means the prudential standard, made under section 32 of the Insurance Act, mentioned in the reference, as amended from time to time. If the prudential standard has been revoked and replaced, the reference shall be taken to be to the prudential standard that has replaced it.","sortOrder":11},{"sectionNumber":"Audit requirements","sectionType":"subdivision","heading":"Audit requirements","content":"#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); and\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\nReporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Authorised insurance entities including mutual entities (refer to form ‘Licensed Insurer’ (GRF 310.0 Statement of Financial Performance (L)); a reference to licensed insurer in the form means total operations of the licensed entity);\n2.  Authorised reinsurance entities (refer to form ‘Licensed Insurer’ (GRF 310.0 Statement of Financial Performance (L)); a reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Australian branch insurers of foreign insurers; a reference to licensed insurer in the form means total operations of the branch. Do not include the operations of the foreign parent entity. Branch insurers should complete the ‘Branch’ form GRF 310.0 Statement of Financial Performance (B).\n\nDefinitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nThis form is to be presented in Australian currency, rounded to thousands of dollars, with no decimal place. Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 for translation are:\n\n1.  Foreign currency monetary items[\\[1\\]](#_ftn1) outstanding at the reporting date must be translated at the spot rate[\\[2\\]](#_ftn2) at the reporting date.\n2.  Foreign currency non-monetary items[\\[3\\]](#_ftn3) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n3.  Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\nReporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\nReporting lag\n\nThis form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in the Reporting Standard GRS 310.0 Statement of Financial Performance.\n\nBasis of preparation\n\nUnless specified otherwise, general insurers are requested to follow the Australian accounting standards regarding the recognition and measurement of items of income and expense (profit or loss) in completing this form, notably AASB 1023 ‘General Insurance Contracts’ (AASB 1023).\n\nFair value measurement of assets\n\nAPRA applies the notion of assets backing general insurance liabilities for its regulatory reporting which is consistent with the classification basis in AASB 1023. The value of investment income and expense reported in this form should be equal to the value of investment income and expense relating to assets backing insurance liabilities for statutory reporting.\n\nInvestment income and expense reported in this form that relates to assets backing insurance liabilities must be measured at fair value. The investments must not be valued at cost. Fair value has the same meaning as defined in AASB 139, that is, the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's-length transaction, and is determined as follows:\n\n1.  The quoted market price (i.e. bid or ask price) in an active and liquid market; or\n2.  When there is infrequent activity in a market, and the market is not well established, small volumes are traded relative to the asset or liability to be valued, or a quoted market price is not available – a realistic estimate of fair value on the basis of the results of a valuation technique that makes maximum use of market inputs, and relies as little as possible on entity-specific inputs[\\[4\\]](#_ftn4).\n\nFair value of charged/encumbered assets\n\nIf an asset is in any way subject to a charge, covenant, encumbrance, option to purchase or any other arrangement by way of agreement or statute, that restricts the fair value of the asset, the value attached to the assets needs to reflect the existence of these arrangements. For example, if the insurer has agreed to deliver an asset to a purchaser at a price below the arms length value, the fair value cannot exceed the agreed price. This may also have relevance to this form.\n\nNetting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’ (AASB 132).\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nPremium revenue – Direct business and Inwards reinsurance\n\nReport total premium revenue for direct business and inwards reinsurance business. These items should equal the amounts for ‘Total Direct Business’ and ‘Total Reinsurance Business’ in column 5 ‘AASB 1023 Gross earned premium (excluding FSL)’ reported in Part 3: Total in GRF 310.1 Premium Revenue and Reinsurance Expense.\n\nFire service levy (and other levies imposed by state and territory governments), which is part of total premium revenue should be reported separately below.\n\nFire service levy (and other levies imposed by state and territory governments)\n\nReport at this item total fire service levy (and other levies imposed by state and territory governments). This item should equal the total of column 6 ‘Fire service levy and other levies imposed by state and territory governments’ reported in Part 3: Total in GRF 310.1 Premium Revenue and Reinsurance Expense.\n\nTotal Premium Revenue\n\nThis is automatically calculated by the form and represents the total of premium revenue for direct business and inwards reinsurance plus fire service levy (and other levies imposed by state and territory governments).\n\nOutwards reinsurance expense relating to current and prior years cover\n\nReport at this item total outwards reinsurance expense relating to current and prior years cover in accordance with AASB 1023. This should equal the total of column 11 ‘Total Reinsurance expense’ reported in Part 3: Total in GRF 310.1 Premium Revenue and Reinsurance Expense.\n\nNet Premium Revenue\n\nThis is automatically calculated by the form and represents the difference between total premium revenue and outwards reinsurance expense.\n\nClaims expense\n\nClaims expense for both direct business and inwards reinsurance business should be split between Paid claims and the Movement Outstanding Claims Liability (OCL).\n\nThe movement in OCL is calculated in the following way:\n\n-   OCL at the end the reporting period\n\nLess:\n\n-   OCL at beginning of financial year.\n\nGross Claims Expense\n\nGross claims expense is automatically calculated by the form and represents the total of the ‘Claims expense’ items.\n\nNon-reinsurance recoveries revenue\n\nThis is revenue from recoveries other than reinsurance recoveries, in respect of claims. This amount should equal the total of the column titled‘Other recoveries revenue relating to current and prior years’ in Part 3: Total from GRF 310.2 Claims Expense and Reinsurance Recoveries.\n\nReinsurance recoveries revenue relating to current and prior years\n\nReport total reinsurance recoveries for the reporting period. This should equal the total of the column titled ‘Reinsurance recoveries revenue relating to current and prior years’ in Part 3: Total from GRF 310.2 Claims Expense and Reinsurance Recoveries.\n\nTotal Recoveries\n\nThis is automatically calculated by the form and represents the sum of the values reported for ‘Non-reinsurance recoveries revenue’ and ‘Reinsurance recoveries revenue relating to current and prior years’.\n\nNet claims expense\n\nThis is automatically calculated by the form and represents the difference between ‘Gross Claims Expense’ and ‘Total Recoveries’.\n\nNet claims expense which is: Current period net claims expense\n\nThis item should be equal to the total of the column titled “Current period net claims expense” in Part 3: Total from GRF 310.2 Claims Expense and Reinsurance Recoveries.\n\nReport at this item:\n\n-   current period claims payments;\n-   current period reported outstanding case estimates (that is, case estimates created in the current period); and\n-   current period incurred but not reported (and incurred but not enough reported) claims expenses.\n\nCurrent period net claims expense should be defined and reported according to the following:\n\n-   the current period is defined as the current financial year to date;\n-   net of all recoverables (including input tax credits reinsurance, salvage, subrogation and other recovery types);\n-   inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;\n-   the outstanding claims component be inflated only i.e. undiscounted; and\n-   the outstanding claims component be on a central estimate basis i.e. without risk margins.\n\nNet claims expense which is: Non-recurring items that are part of total net claims expense\n\nReport the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ above.\n\nQuarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.\n\nAcquisition costs (excluding the results of liability adequacy tests)\n\nReport acquisition costs as recognised under AASB 1023. Acquisition costs are incurred in obtaining and recording general insurance contracts. They usually include commission or brokerage paid to agent or brokers for obtaining business for the insurer, selling and underwriting costs such as advertising and risk assessment, the administrative costs of recording policy information and premium collection costs. However for the purposes of reporting on this form, commission expenses should be excluded and reported separately.\n\nAcquisition costs recognised in this line item should exclude the results of the liability adequacy test (LAT).\n\nResults of liability adequacy tests (current year)\n\nReport any adjustments to deferred acquisition costs or the unexpired risk liability as a result of performing the LAT in accordance with AASB 1023. Report at this item only the results of the LAT performed in the current financial year. Results of LAT failures should be reported as a positive value.\n\nResults of liability adequacy tests (prior years)\n\nReport any adjustments to deferred acquisition costs or the unexpired risk liability as a result of performing the LAT in accordance with AASB 1023. Report at this item the results of liability adequacy tests performed in prior years which have a profit and loss impact in the current financial year. Results of LAT failures should be reported as a positive value.\n\nOther underwriting expenses\n\nThis item will include all other underwriting expenses which are not included in ‘Acquisition costs (excluding the results of the liability adequacy tests)’ and subject to deferral.\n\nLevies and charges\n\nThis item will include levies and charges payable by the insurer. It excludes the amounts collected on behalf of third parties.\n\nCommission Revenue\n\nThis item includes commission revenue received in relation to the insurance business. Commission revenue should be reported in accordance with the pattern in which it is earned. Do not include ‘premium rebates’ received from reinsurers in this line item.\n\nCommission expense\n\nReport at this item commission or brokerage paid to agents or brokers for obtaining business for the insurer.\n\nTotal Underwriting Expenses\n\nTotal underwriting expenses are calculated automatically and are derived from:\n\n-   Acquisition costs (excluding the results of the liability adequacy test)\n\nAdd:\n\n-   Results of liability adequacy tests (current and prior years)\n-   Other underwriting expenses\n\n-   Levies and charges\n-   Commission expense\n\nLess:\n\n-   Commission revenue\n\nUnderwriting result\n\nThe underwriting result is calculated automatically and is derived from:\n\n-   Net Premium Revenue\n\nLess:\n\n-   Net claims expense\n\nLess:\n\n-   Total underwriting expenses\n\nInvestment Income on assets backing insurance liabilities\n\nReport investment income on assets backing insurance liabilities at this item.\n\nInvestment expenses on assets backing insurance liabilities\n\nReport investment expenses relating to assets backing insurance liabilities at this item.\n\nInsurance result\n\nThe insurance result is calculated automatically and is derived from the\n\n-   Underwriting result\n\nAdd\n\n-   Investment income on assets backing insurance liabilities\n\nLess\n\n-   Investment expenses on assets backing insurance liabilities.\n\nInvestment income on shareholders’ funds\n\nReport investment income on shareholders’ / equity holders’ funds at this item. This item must correspond to the memo item ‘Total Investment Income which is attributable to shareholders’ funds’ reported in GRF 310.3 Investment and Operating Income and Expense.\n\nOther Operating Income\n\nReport all other income not reported above in this item. This item must correspond to the ‘Total Other Operating Income’ reported in GRF 310.3 Investment and Operating Income and Expense.\n\nOther Operating Expenses\n\nReport operating expenses in this item. This item must correspond to the ‘Total Operating Expenses’ reported in GRF 310.3 Investment and Operating Income and Expense.\n\nBargain purchase immediately recognised in profit or loss\n\nThis item must be completed in accordance with the requirements of AASB 3 ‘Business Combinations’.\n\nThe acquirer shall recognise goodwill as of the acquisition date measured as the excess of (a) over (b) below:\n\n(a) the aggregate of:\n\n(i) the consideration transferred which generally requires acquisition-date fair value;\n\n(ii) the amount of any non-controlling interest in the acquiree measured in accordance with this Standard; and\n\n(iii) in a business combination achieved in stages (see paragraphs 41 and 42), the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree.\n\n(b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.\n\nProfit (loss) from non-current assets and disposal groups classified as held for sale and discontinued operations\n\nReport any gain or loss on the measurement of a non-current asset (or disposal group) classified as held for sale which meets the definition of a discontinued operation.\n\nThis item must be completed in accordance with the requirements of AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’.\n\nProfit (loss) from continuing operations before income tax expense (benefit)\n\nThe profit (loss) from continuing operations is calculated automatically and is derived from:\n\n-   Insurance result\n\nPlus:\n\n-   Investment income on shareholders’ funds\n\n-   Other operating income\n\nLess:\n\n-   Other operating expenses\n-   Bargain purchase immediately recognised in profit or loss\n\nPlus:\n\n-   Profit (loss) from non-current assets and disposal groups classified as held for sale and discontinued operations\n\nIncome tax expense (benefit) from continuing operations\n\nThis item represents the income tax expense or benefit attributable to the profit or loss from continuing operations.\n\nThis item must be completed in accordance with the requirements of AASB 112 ‘Income Taxes’.\n\nProfit (loss) from continuing operations after income tax\n\nThis item is calculated automatically and is derived from:\n\n-   Profit or loss from continuing operations before income tax expense (benefit)\n\nLess:\n\n-   Income tax expense (benefit) from continuing operations\n\nProfit (loss) from discontinued operations after income tax\n\nProfit (loss) after income tax from discontinued operations is to be presented in accordance with the Australian accounting standards.\n\nNet profit (loss) after income tax attributable to members of the company / Net profit (loss) after income tax (Branches)\n\nThis is calculated automatically and is derived from:\n\n-   Profit (loss) from continuing operations after income tax\n\nAdd:\n\n-   Profit (loss) from discontinued operations after income tax\n\nRetained profits / (losses) at beginning of the financial year\n\nReport here the relevant retained profit (loss) amount at the beginning of the current financial year. For the first year of reporting the APRA forms, use the retained profits figure as per the insurer’s statutory accounts prepared in accordance with Australian accounting standards.\n\nAdjustments to retained profits due to change in accounting policies/standards\n\nInclude the value of aggregate adjustments to retained earnings due to changes in accounting policies or accounting treatment as required by a revised accounting standard.\n\nReduction in retained profits on share buy back (Non-branch insurers only)\n\nDisclose that portion of the consideration used for share buy backs during the reporting period that is allocated to retained earnings. Report any reduction in retained earnings as a negative figure.\n\nAmounts transferred to / from reserves\n\nDisclose the amount of funds transferred to / (from) other reserves to retained earnings during the reporting period.\n\nTotal available for appropriation\n\nThis amount is calculated automatically and is derived from:\n\n-   Net profit (loss) after income tax attributable to members of the company\n\nPlus:\n\n-   Retained profits / (losses) at the beginning of the financial year\n\nPlus/:\n\n-   Adjustments to retained profits due to change in accounting policies/standards\n\nPlus:\n\n-   Reduction in retained profits on share buy back\n-   Amounts transferred from reserves\n\nDividends / head office transfers declared or paid\n\nA dividend is the amount paid out of a company’s profits to its shareholders (interim and final dividend). The annual dividend equals the final dividend plus the interim dividend if declared. Accordingly, report dividends which are declared or paid by the insurer.\n\nBranches should report any head office transfers declared or paid at this item that are not reported in ‘Aggregate of amounts transferred from / to parent entity (Branches)’ below.\n\nAggregate of amounts transferred (from) / to parent entity (Branches only)\n\nDisclose the amount of dividends or funds transferred (from)/to the parent entity during the reporting period. This should be split between contributions of capital and dividends.\n\nNote: If capital is provided by the parent entity, which is not required to be repaid by the branch, this contribution of capital is to be disclosed in this form as funds transferred from the parent entity.\n\nIf the capital provided by the parent is in the form of debt and must be repaid, the amount should be disclosed in the liability section of GRF 300.0 Statement of Financial Position under item 23.1 ‘Loan capital’.\n\nAggregate of other amounts\n\nReport the aggregate of any other amounts that are transferred to or from reserves or retained earnings.\n\nRetained profits / (losses) at the end of the reporting period\n\nThis is calculated automatically and for non-branch insurers is derived from:\n\n-   Total available for appropriation\n\nLess:\n\n-   Dividends / head office transfers declared or paid\n\nFor branches, it is derived from:\n\n-   Net profit (loss) after income tax\n\nPlus\n\n-   Retained profits / (losses) at the beginning of the financial year\n-   Adjustments to retained profits due to change in accounting policies / standards\n-   Aggregate of amounts transferred from / to reserves\n-   Aggregate of amounts transferred from parent entity (i.e. contributions of capital) (Branches only)\n-   Aggregate of amounts transferred to parent entity (i.e. dividends) (Branches only).\n-   Aggregate of other amounts\n\nLess\n\n-   Head office transfers declared or paid.","sortOrder":12},{"sectionNumber":"Reporting Form GRF 310.1","sectionType":"part","heading":"Reporting Form GRF 310.1","content":"## Reporting Form GRF 310.1\n\n## Premium Revenue and Reinsurance Expense\n\n### Instruction Guide\n\n### Introduction\n\nThe purpose of GRF 310.1 Premium Revenue and Reinsurance Expense is to provide information on written and earned premium revenue gross and net of reinsurance expense by class of business, which supports the summarised underwriting result disclosed in GRF 310.0 Statement of Financial Performance.\n\nThe form reports total gross written, gross earned and net earned premium revenue by class of business, on accrual and cashflow bases, for both direct and inwards reinsurance business.\n\nThe following items should be reported:\n\n1.  total gross written premium;\n2.  gross written premium relating to unclosed business;\n3.  gross unearned premium liability at the beginning of the financial year on a AASB 1023 basis;\n4.  gross unearned premium liability at the end of the reporting period on a AASB 1023 basis;\n5.  gross earned premium on a AASB 1023 ‘General Insurance Contracts’ (AASB 1023) basis excluding fire service levy and other levies imposed by state and territory governments;\n6.  fire service levy and other levies imposed by state and territory governments;\n7.  gross earned premium on a AASB 1023 basis including fire service levy and other levies imposed by state and territory governments;\n8.  outwards reinsurance expense on a AASB 1023 basis;\n9.  deferred reinsurance expense asset at the beginning of the financial year based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n10.  deferred reinsurance expense asset at the end of the reporting period based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n11.  total reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n12.  net earned premium revenue; and\n13.  total reinsurance expense as reported under AASB 1023.\n\n#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); and\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\n## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).\n\n#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 are:\n\n1.  Foreign currency monetary items outstanding at the reporting date[\\[5\\]](#_ftn5) must be translated at the spot rate[\\[6\\]](#_ftn6) at the reporting date.\n\n2. Foreign currency non-monetary items[\\[7\\]](#_ftn7) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n\n3. Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\n## Reporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\n## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.1 Premium Revenue and Reinsurance Expense.\n\n## Basis of preparation\n\nInsurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.\n\n## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Insurance Business\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/Householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)\n\n##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.\n\n##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory Third Party Motor Vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and Product Liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.\n\n#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.\n\n###### Premium revenue\n\nPremium revenue must be reported separately for:\n\n-   Direct business; and\n-   Inwards reinsurance business.\n\nPremium revenue must be recognised on a basis that is consistent with the requirements of AASB 1023.\n\nIn accordance with AASB 1023:\n\n-   Premium revenue shall be recognised from the attachment date as soon as there is a basis on which it can be reliably estimated:\n-   over the period of the general insurance contract for direct business; or\n-   over the period of indemnity for reinsurance business;\n\nin accordance with the pattern of the incidence of risk expected under the general insurance contract[\\[8\\]](#_ftn8).\n\n-   Reinsurers are required to recognise the premium based on the gross premium income to be written by the direct insurer under the contract for proportional reinsurance. For excess of loss reinsurance contracts, the premium revenue is to be recognised on the basis of the agreed minimum/deposit premium, which will be subject to a final adjustment factor applied to the final declared values of the premium determined.\n-   Premium revenue must be discounted where it is to be received beyond the current year of cover under an insurance/reinsurance contract. In these cases, use the discount rate as required in calculating outstanding claims liabilities in accordance with AASB 1023.\n-   Premium revenue excludes amounts collected on behalf of third parties i.e. government stamp duty and taxes.\n-   Levies charged to insured, such as fire service levies, are to be included as total premium revenue, but are to be reported separately.\n-   Premium refunds and rebates are to be deducted from premium revenue.\n-   For instalment premium policies, the amount of the annualised premium is to be used.\n-   Where premium is calculated on an adjustment basis, the estimated annual premium is to be brought to account, with the estimated premium being replaced by the actual amount as it becomes known.\n-   Where premium is accepted on a deposit basis, the full annual premium is to be brought into account.\n-   Premium revenue must be gross of reinsurance expense.\n-   Total gross written premium includes premium receivable on unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but where there is insufficient information to fully identify the business.\n\nPart 1 and Part 2\n\nFor ‘Direct Business” and ‘Inwards Reinsurance Business’, amounts are to be reported as follows:\n\n(1) Total gross written premium revenue\n\nReport premium revenue from business written directly by the insurer in ‘Part 1: Direct Business’. Report inwards reinsurance premiums under ‘Part 2: Reinsurance Business’. This should exclude Fire Service Levy (FSL) or other levies imposed by state and territory governments.\n\nAlso includes business sourced through insurance intermediaries such as co-insurance, underwriting pools or joint ventures, or portfolio transfers.\n\nJoint ventures\n\nJoint ventures are to be interpreted as defined by the AASB 131 ‘Interests in Joint Ventures’.\n\nCoinsurance and underwriting pools\n\nInsurance business allocated through underwriting pools and coinsurance arrangements by an entity acting as agent must be accounted for by the accepting insurer as direct insurance business (AASB 1023).\n\nDirect insurers or reinsurers may form underwriting pools or enter coinsurance arrangements as vehicles for jointly insuring particular risks or types of risks. Premiums, claims and other expenses are usually shared in agreed ratios by insurers involved in these arrangements. Many underwriting pools and coinsurance arrangements involve the acceptance of risks by an entity acting as an agent for pool members or coinsurers. The entity receives premiums and pays claims and expenses, and allocates shares of the business to each pool member or coinsurer in agreed ratios. As the entity acting as agent is not an insurer, the business allocated to pool members and coinsurers is not reinsurance business. Pool members and coinsurers will need to treat such business allocated to them as direct insurance business.[\\[9\\]](#_ftn9)\n\nSome underwriting pools and coinsurance arrangements involve members of the pool or coinsurers directly underwriting risks and then passing all of those risks into the pool or arrangement. These risks are then shared among pool members or coinsurers. For this type of underwriting pool or arrangement, an insurer treats its share of the business that other insurers place with the pool or arrangement as inwards reinsurance, and the business that it writes and passes into the pool or arrangement as direct insurance business which it reinsures to the extent of the shares in the pool or arrangement of the other pool members or coinsurers. This approach results in the insurer properly reflecting its obligations to those it has directly insured and the substance of the transactions with the pool members or coinsurers.\n\nPortfolio transfers\n\nPortfolio transfer, as defined by AASB 1023, is a term used to describe the process by which premiums and claims on direct insurance business is transferred from one insurer to another by means of direct sale, not by reinsurance.\n\nWhen responsibility in relation to claims on transferred insurance business passes from the transferring insurer to the accepting insurer the transfer must be accounted for as a portfolio assumption by the accepting insurer, and a portfolio withdrawal by the transferring insurer. In this instance, the accepting insurers will recognise the amount of unexpired premium revenue and insurance liabilities for which the transferring insurer is no longer responsible. Transfers of business effected through the Insurance Act requiring Federal Court approval shall be treated in this manner.\n\nWhere the responsibility in relation to claims on transferred insurance business remains with the transferring business, the transfer shall be treated by the transferring insurer and the accepting insurer as reinsurance business.\n\n###### Premiums Received on a cashflow basis (in Part 3: Total)\n\nThis is the amount of premiums actually received over the reporting period (on a year to date basis). It is to be reported in aggregate for direct written business and reinsurance business.\n\nThis relates to all premiums received on a cashflow basis in the current financial year, regardless of the financial year in which the premiums may have been recognised as revenue (i.e. a prior financial year).\n\n(2) Gross written premium revenue relating to unclosed business\n\nThis column requires separate identification of gross premium revenue relating to unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but there is insufficient information to fully identify the business.\n\n(3) and (4) AASB 1023 Gross unearned premium liability (UPL)\n\nGross UPL is to be reported in this form at both the start of the financial year and the end of the reporting period. The UPL is to be reported in this form in accordance with AASB 1023.\n\n(5) AASB 1023 Gross earned premium (excluding FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (1) and column (3), less column (4).\n\n(6) Fire service levy and other levies imposed by state and territory governments\n\nReport separately FSL and any other levies imposed by state and territory governments.\n\n(7) AASB 1023 Gross earned premium (including FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (5) and column (6).\n\n(8) Reinsurance expense\n\nReinsurance expense is to be recognised in accordance with the pattern of reinsurance service received as required by AASB 1023.\n\nReinsurance expense will be recognised from the attachment date over the period of indemnity of the reinsurance contract in accordance with the expected pattern of the incidence of risk. This may vary according to the type of reinsurance contract as outlined below.\n\nFor reinsurance written on a risks attaching or, equivalently, an underwriting period basis, current reinsurance contracts are fully matched to the underlying insurance portfolios. Reinsurance coverage for the underlying portfolio is recognised as the underlying policies are written.\n\nFor reinsurance written on a losses occurring basis, current reinsurance contracts provide coverage for any risks exposed during the reinsurance period irrespective of when the underlying business was written. Such reinsurance covers both the unexpired portion of policies in force at the contract commencement date and that portion of new business and renewals written during the year that is earned up to the contract expiry date. This latter portion relates to business which has not yet been written at the contract commencement date.\n\nAPRA would expect that initially the full minimum and deposit premium would be recognised as an expense, with any necessary adjustments due to experience at subsequent reporting dates.\n\nWhere payments under a reinsurance contract extend beyond the current year of cover, reinsurance expense is to be discounted using similar discount rates as required in measuring insurance liabilities in accordance with AASB 1023.\n\n(9) and (10) GRF 300.0 Deferred Reinsurance Expense (DRE)\n\nDeferred Reinsurance Expense is to be reported in this form at both the start of the financial year and the end of the reporting period. Deferred Reinsurance Expense is to be reported in this form as per GRF 300.0 Statement of Financial Position.\n\n(11) Total Reinsurance expense\n\nThis column is calculated automatically by the form and represents The sum of column (8) and column (9), less column (10).\n\nFor some insurers the reinsurance expense reported in this column may be different from the reinsurance expense reported at column 13.\n\n(12) Net premium revenue\n\nThis is automatically calculated by the form and represents the AASB 1023 Gross earned premium (including FSL) less total reinsurance expense.\n\n(13) Total reinsurance expense per AASB 1023\n\nReport the total reinsurance expense that would be reported under AASB 1023. Where there is no difference from column 11 ‘Total Reinsurance expense’ input the same number as in column 11. Where the insurer does not ordinarily calculate reinsurance expense under AASB 1023, input zero.. This item is a memo item for reconciliation purposes only.\n\nBusiness with related entities:\n\nReport premium revenue/reinsurance expense items which are from/in connection with the following related entities. Related parties have been defined earlier in this instruction guide:\n\n1.  Parent entity\n2.  Controlled entities / Controlled entities of the parent entity\n\nFor branches, the line item ’Controlled entities / Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\n3. Associates / Joint Ventures\n\n4. Other related parties","sortOrder":13},{"sectionNumber":"Premium Revenue and Reinsurance Expense","sectionType":"part","heading":"Premium Revenue and Reinsurance Expense","content":"## Reporting Form GRF 310.1\n\n## Premium Revenue and Reinsurance Expense\n\n### Instruction Guide\n\n### Introduction\n\nThe purpose of GRF 310.1 Premium Revenue and Reinsurance Expense is to provide information on written and earned premium revenue gross and net of reinsurance expense by class of business, which supports the summarised underwriting result disclosed in GRF 310.0 Statement of Financial Performance.\n\nThe form reports total gross written, gross earned and net earned premium revenue by class of business, on accrual and cashflow bases, for both direct and inwards reinsurance business.\n\nThe following items should be reported:\n\n1.  total gross written premium;\n2.  gross written premium relating to unclosed business;\n3.  gross unearned premium liability at the beginning of the financial year on a AASB 1023 basis;\n4.  gross unearned premium liability at the end of the reporting period on a AASB 1023 basis;\n5.  gross earned premium on a AASB 1023 ‘General Insurance Contracts’ (AASB 1023) basis excluding fire service levy and other levies imposed by state and territory governments;\n6.  fire service levy and other levies imposed by state and territory governments;\n7.  gross earned premium on a AASB 1023 basis including fire service levy and other levies imposed by state and territory governments;\n8.  outwards reinsurance expense on a AASB 1023 basis;\n9.  deferred reinsurance expense asset at the beginning of the financial year based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n10.  deferred reinsurance expense asset at the end of the reporting period based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n11.  total reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n12.  net earned premium revenue; and\n13.  total reinsurance expense as reported under AASB 1023.\n\n#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); and\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\n## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).\n\n#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 are:\n\n1.  Foreign currency monetary items outstanding at the reporting date[\\[5\\]](#_ftn5) must be translated at the spot rate[\\[6\\]](#_ftn6) at the reporting date.\n\n2. Foreign currency non-monetary items[\\[7\\]](#_ftn7) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n\n3. Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\n## Reporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\n## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.1 Premium Revenue and Reinsurance Expense.\n\n## Basis of preparation\n\nInsurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.\n\n## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Insurance Business\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/Householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)\n\n##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.\n\n##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory Third Party Motor Vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and Product Liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.\n\n#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.\n\n###### Premium revenue\n\nPremium revenue must be reported separately for:\n\n-   Direct business; and\n-   Inwards reinsurance business.\n\nPremium revenue must be recognised on a basis that is consistent with the requirements of AASB 1023.\n\nIn accordance with AASB 1023:\n\n-   Premium revenue shall be recognised from the attachment date as soon as there is a basis on which it can be reliably estimated:\n-   over the period of the general insurance contract for direct business; or\n-   over the period of indemnity for reinsurance business;\n\nin accordance with the pattern of the incidence of risk expected under the general insurance contract[\\[8\\]](#_ftn8).\n\n-   Reinsurers are required to recognise the premium based on the gross premium income to be written by the direct insurer under the contract for proportional reinsurance. For excess of loss reinsurance contracts, the premium revenue is to be recognised on the basis of the agreed minimum/deposit premium, which will be subject to a final adjustment factor applied to the final declared values of the premium determined.\n-   Premium revenue must be discounted where it is to be received beyond the current year of cover under an insurance/reinsurance contract. In these cases, use the discount rate as required in calculating outstanding claims liabilities in accordance with AASB 1023.\n-   Premium revenue excludes amounts collected on behalf of third parties i.e. government stamp duty and taxes.\n-   Levies charged to insured, such as fire service levies, are to be included as total premium revenue, but are to be reported separately.\n-   Premium refunds and rebates are to be deducted from premium revenue.\n-   For instalment premium policies, the amount of the annualised premium is to be used.\n-   Where premium is calculated on an adjustment basis, the estimated annual premium is to be brought to account, with the estimated premium being replaced by the actual amount as it becomes known.\n-   Where premium is accepted on a deposit basis, the full annual premium is to be brought into account.\n-   Premium revenue must be gross of reinsurance expense.\n-   Total gross written premium includes premium receivable on unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but where there is insufficient information to fully identify the business.\n\nPart 1 and Part 2\n\nFor ‘Direct Business” and ‘Inwards Reinsurance Business’, amounts are to be reported as follows:\n\n(1) Total gross written premium revenue\n\nReport premium revenue from business written directly by the insurer in ‘Part 1: Direct Business’. Report inwards reinsurance premiums under ‘Part 2: Reinsurance Business’. This should exclude Fire Service Levy (FSL) or other levies imposed by state and territory governments.\n\nAlso includes business sourced through insurance intermediaries such as co-insurance, underwriting pools or joint ventures, or portfolio transfers.\n\nJoint ventures\n\nJoint ventures are to be interpreted as defined by the AASB 131 ‘Interests in Joint Ventures’.\n\nCoinsurance and underwriting pools\n\nInsurance business allocated through underwriting pools and coinsurance arrangements by an entity acting as agent must be accounted for by the accepting insurer as direct insurance business (AASB 1023).\n\nDirect insurers or reinsurers may form underwriting pools or enter coinsurance arrangements as vehicles for jointly insuring particular risks or types of risks. Premiums, claims and other expenses are usually shared in agreed ratios by insurers involved in these arrangements. Many underwriting pools and coinsurance arrangements involve the acceptance of risks by an entity acting as an agent for pool members or coinsurers. The entity receives premiums and pays claims and expenses, and allocates shares of the business to each pool member or coinsurer in agreed ratios. As the entity acting as agent is not an insurer, the business allocated to pool members and coinsurers is not reinsurance business. Pool members and coinsurers will need to treat such business allocated to them as direct insurance business.[\\[9\\]](#_ftn9)\n\nSome underwriting pools and coinsurance arrangements involve members of the pool or coinsurers directly underwriting risks and then passing all of those risks into the pool or arrangement. These risks are then shared among pool members or coinsurers. For this type of underwriting pool or arrangement, an insurer treats its share of the business that other insurers place with the pool or arrangement as inwards reinsurance, and the business that it writes and passes into the pool or arrangement as direct insurance business which it reinsures to the extent of the shares in the pool or arrangement of the other pool members or coinsurers. This approach results in the insurer properly reflecting its obligations to those it has directly insured and the substance of the transactions with the pool members or coinsurers.\n\nPortfolio transfers\n\nPortfolio transfer, as defined by AASB 1023, is a term used to describe the process by which premiums and claims on direct insurance business is transferred from one insurer to another by means of direct sale, not by reinsurance.\n\nWhen responsibility in relation to claims on transferred insurance business passes from the transferring insurer to the accepting insurer the transfer must be accounted for as a portfolio assumption by the accepting insurer, and a portfolio withdrawal by the transferring insurer. In this instance, the accepting insurers will recognise the amount of unexpired premium revenue and insurance liabilities for which the transferring insurer is no longer responsible. Transfers of business effected through the Insurance Act requiring Federal Court approval shall be treated in this manner.\n\nWhere the responsibility in relation to claims on transferred insurance business remains with the transferring business, the transfer shall be treated by the transferring insurer and the accepting insurer as reinsurance business.\n\n###### Premiums Received on a cashflow basis (in Part 3: Total)\n\nThis is the amount of premiums actually received over the reporting period (on a year to date basis). It is to be reported in aggregate for direct written business and reinsurance business.\n\nThis relates to all premiums received on a cashflow basis in the current financial year, regardless of the financial year in which the premiums may have been recognised as revenue (i.e. a prior financial year).\n\n(2) Gross written premium revenue relating to unclosed business\n\nThis column requires separate identification of gross premium revenue relating to unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but there is insufficient information to fully identify the business.\n\n(3) and (4) AASB 1023 Gross unearned premium liability (UPL)\n\nGross UPL is to be reported in this form at both the start of the financial year and the end of the reporting period. The UPL is to be reported in this form in accordance with AASB 1023.\n\n(5) AASB 1023 Gross earned premium (excluding FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (1) and column (3), less column (4).\n\n(6) Fire service levy and other levies imposed by state and territory governments\n\nReport separately FSL and any other levies imposed by state and territory governments.\n\n(7) AASB 1023 Gross earned premium (including FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (5) and column (6).\n\n(8) Reinsurance expense\n\nReinsurance expense is to be recognised in accordance with the pattern of reinsurance service received as required by AASB 1023.\n\nReinsurance expense will be recognised from the attachment date over the period of indemnity of the reinsurance contract in accordance with the expected pattern of the incidence of risk. This may vary according to the type of reinsurance contract as outlined below.\n\nFor reinsurance written on a risks attaching or, equivalently, an underwriting period basis, current reinsurance contracts are fully matched to the underlying insurance portfolios. Reinsurance coverage for the underlying portfolio is recognised as the underlying policies are written.\n\nFor reinsurance written on a losses occurring basis, current reinsurance contracts provide coverage for any risks exposed during the reinsurance period irrespective of when the underlying business was written. Such reinsurance covers both the unexpired portion of policies in force at the contract commencement date and that portion of new business and renewals written during the year that is earned up to the contract expiry date. This latter portion relates to business which has not yet been written at the contract commencement date.\n\nAPRA would expect that initially the full minimum and deposit premium would be recognised as an expense, with any necessary adjustments due to experience at subsequent reporting dates.\n\nWhere payments under a reinsurance contract extend beyond the current year of cover, reinsurance expense is to be discounted using similar discount rates as required in measuring insurance liabilities in accordance with AASB 1023.\n\n(9) and (10) GRF 300.0 Deferred Reinsurance Expense (DRE)\n\nDeferred Reinsurance Expense is to be reported in this form at both the start of the financial year and the end of the reporting period. Deferred Reinsurance Expense is to be reported in this form as per GRF 300.0 Statement of Financial Position.\n\n(11) Total Reinsurance expense\n\nThis column is calculated automatically by the form and represents The sum of column (8) and column (9), less column (10).\n\nFor some insurers the reinsurance expense reported in this column may be different from the reinsurance expense reported at column 13.\n\n(12) Net premium revenue\n\nThis is automatically calculated by the form and represents the AASB 1023 Gross earned premium (including FSL) less total reinsurance expense.\n\n(13) Total reinsurance expense per AASB 1023\n\nReport the total reinsurance expense that would be reported under AASB 1023. Where there is no difference from column 11 ‘Total Reinsurance expense’ input the same number as in column 11. Where the insurer does not ordinarily calculate reinsurance expense under AASB 1023, input zero.. This item is a memo item for reconciliation purposes only.\n\nBusiness with related entities:\n\nReport premium revenue/reinsurance expense items which are from/in connection with the following related entities. Related parties have been defined earlier in this instruction guide:\n\n1.  Parent entity\n2.  Controlled entities / Controlled entities of the parent entity\n\nFor branches, the line item ’Controlled entities / Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\n3. Associates / Joint Ventures\n\n4. Other related parties","sortOrder":14},{"sectionNumber":"Instruction Guide","sectionType":"division","heading":"Instruction Guide","content":"## Reporting Form GRF 310.1\n\n## Premium Revenue and Reinsurance Expense\n\n### Instruction Guide\n\n### Introduction\n\nThe purpose of GRF 310.1 Premium Revenue and Reinsurance Expense is to provide information on written and earned premium revenue gross and net of reinsurance expense by class of business, which supports the summarised underwriting result disclosed in GRF 310.0 Statement of Financial Performance.\n\nThe form reports total gross written, gross earned and net earned premium revenue by class of business, on accrual and cashflow bases, for both direct and inwards reinsurance business.\n\nThe following items should be reported:\n\n1.  total gross written premium;\n2.  gross written premium relating to unclosed business;\n3.  gross unearned premium liability at the beginning of the financial year on a AASB 1023 basis;\n4.  gross unearned premium liability at the end of the reporting period on a AASB 1023 basis;\n5.  gross earned premium on a AASB 1023 ‘General Insurance Contracts’ (AASB 1023) basis excluding fire service levy and other levies imposed by state and territory governments;\n6.  fire service levy and other levies imposed by state and territory governments;\n7.  gross earned premium on a AASB 1023 basis including fire service levy and other levies imposed by state and territory governments;\n8.  outwards reinsurance expense on a AASB 1023 basis;\n9.  deferred reinsurance expense asset at the beginning of the financial year based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n10.  deferred reinsurance expense asset at the end of the reporting period based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n11.  total reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n12.  net earned premium revenue; and\n13.  total reinsurance expense as reported under AASB 1023.\n\n#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3)); and\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\n## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).\n\n#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 are:\n\n1.  Foreign currency monetary items outstanding at the reporting date[\\[5\\]](#_ftn5) must be translated at the spot rate[\\[6\\]](#_ftn6) at the reporting date.\n\n2. Foreign currency non-monetary items[\\[7\\]](#_ftn7) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n\n3. Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\n## Reporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\n## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.1 Premium Revenue and Reinsurance Expense.\n\n## Basis of preparation\n\nInsurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.\n\n## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Insurance Business\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/Householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)\n\n##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.\n\n##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory Third Party Motor Vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and Product Liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.\n\n#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.\n\n###### Premium revenue\n\nPremium revenue must be reported separately for:\n\n-   Direct business; and\n-   Inwards reinsurance business.\n\nPremium revenue must be recognised on a basis that is consistent with the requirements of AASB 1023.\n\nIn accordance with AASB 1023:\n\n-   Premium revenue shall be recognised from the attachment date as soon as there is a basis on which it can be reliably estimated:\n-   over the period of the general insurance contract for direct business; or\n-   over the period of indemnity for reinsurance business;\n\nin accordance with the pattern of the incidence of risk expected under the general insurance contract[\\[8\\]](#_ftn8).\n\n-   Reinsurers are required to recognise the premium based on the gross premium income to be written by the direct insurer under the contract for proportional reinsurance. For excess of loss reinsurance contracts, the premium revenue is to be recognised on the basis of the agreed minimum/deposit premium, which will be subject to a final adjustment factor applied to the final declared values of the premium determined.\n-   Premium revenue must be discounted where it is to be received beyond the current year of cover under an insurance/reinsurance contract. In these cases, use the discount rate as required in calculating outstanding claims liabilities in accordance with AASB 1023.\n-   Premium revenue excludes amounts collected on behalf of third parties i.e. government stamp duty and taxes.\n-   Levies charged to insured, such as fire service levies, are to be included as total premium revenue, but are to be reported separately.\n-   Premium refunds and rebates are to be deducted from premium revenue.\n-   For instalment premium policies, the amount of the annualised premium is to be used.\n-   Where premium is calculated on an adjustment basis, the estimated annual premium is to be brought to account, with the estimated premium being replaced by the actual amount as it becomes known.\n-   Where premium is accepted on a deposit basis, the full annual premium is to be brought into account.\n-   Premium revenue must be gross of reinsurance expense.\n-   Total gross written premium includes premium receivable on unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but where there is insufficient information to fully identify the business.\n\nPart 1 and Part 2\n\nFor ‘Direct Business” and ‘Inwards Reinsurance Business’, amounts are to be reported as follows:\n\n(1) Total gross written premium revenue\n\nReport premium revenue from business written directly by the insurer in ‘Part 1: Direct Business’. Report inwards reinsurance premiums under ‘Part 2: Reinsurance Business’. This should exclude Fire Service Levy (FSL) or other levies imposed by state and territory governments.\n\nAlso includes business sourced through insurance intermediaries such as co-insurance, underwriting pools or joint ventures, or portfolio transfers.\n\nJoint ventures\n\nJoint ventures are to be interpreted as defined by the AASB 131 ‘Interests in Joint Ventures’.\n\nCoinsurance and underwriting pools\n\nInsurance business allocated through underwriting pools and coinsurance arrangements by an entity acting as agent must be accounted for by the accepting insurer as direct insurance business (AASB 1023).\n\nDirect insurers or reinsurers may form underwriting pools or enter coinsurance arrangements as vehicles for jointly insuring particular risks or types of risks. Premiums, claims and other expenses are usually shared in agreed ratios by insurers involved in these arrangements. Many underwriting pools and coinsurance arrangements involve the acceptance of risks by an entity acting as an agent for pool members or coinsurers. The entity receives premiums and pays claims and expenses, and allocates shares of the business to each pool member or coinsurer in agreed ratios. As the entity acting as agent is not an insurer, the business allocated to pool members and coinsurers is not reinsurance business. Pool members and coinsurers will need to treat such business allocated to them as direct insurance business.[\\[9\\]](#_ftn9)\n\nSome underwriting pools and coinsurance arrangements involve members of the pool or coinsurers directly underwriting risks and then passing all of those risks into the pool or arrangement. These risks are then shared among pool members or coinsurers. For this type of underwriting pool or arrangement, an insurer treats its share of the business that other insurers place with the pool or arrangement as inwards reinsurance, and the business that it writes and passes into the pool or arrangement as direct insurance business which it reinsures to the extent of the shares in the pool or arrangement of the other pool members or coinsurers. This approach results in the insurer properly reflecting its obligations to those it has directly insured and the substance of the transactions with the pool members or coinsurers.\n\nPortfolio transfers\n\nPortfolio transfer, as defined by AASB 1023, is a term used to describe the process by which premiums and claims on direct insurance business is transferred from one insurer to another by means of direct sale, not by reinsurance.\n\nWhen responsibility in relation to claims on transferred insurance business passes from the transferring insurer to the accepting insurer the transfer must be accounted for as a portfolio assumption by the accepting insurer, and a portfolio withdrawal by the transferring insurer. In this instance, the accepting insurers will recognise the amount of unexpired premium revenue and insurance liabilities for which the transferring insurer is no longer responsible. Transfers of business effected through the Insurance Act requiring Federal Court approval shall be treated in this manner.\n\nWhere the responsibility in relation to claims on transferred insurance business remains with the transferring business, the transfer shall be treated by the transferring insurer and the accepting insurer as reinsurance business.\n\n###### Premiums Received on a cashflow basis (in Part 3: Total)\n\nThis is the amount of premiums actually received over the reporting period (on a year to date basis). It is to be reported in aggregate for direct written business and reinsurance business.\n\nThis relates to all premiums received on a cashflow basis in the current financial year, regardless of the financial year in which the premiums may have been recognised as revenue (i.e. a prior financial year).\n\n(2) Gross written premium revenue relating to unclosed business\n\nThis column requires separate identification of gross premium revenue relating to unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but there is insufficient information to fully identify the business.\n\n(3) and (4) AASB 1023 Gross unearned premium liability (UPL)\n\nGross UPL is to be reported in this form at both the start of the financial year and the end of the reporting period. The UPL is to be reported in this form in accordance with AASB 1023.\n\n(5) AASB 1023 Gross earned premium (excluding FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (1) and column (3), less column (4).\n\n(6) Fire service levy and other levies imposed by state and territory governments\n\nReport separately FSL and any other levies imposed by state and territory governments.\n\n(7) AASB 1023 Gross earned premium (including FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (5) and column (6).\n\n(8) Reinsurance expense\n\nReinsurance expense is to be recognised in accordance with the pattern of reinsurance service received as required by AASB 1023.\n\nReinsurance expense will be recognised from the attachment date over the period of indemnity of the reinsurance contract in accordance with the expected pattern of the incidence of risk. This may vary according to the type of reinsurance contract as outlined below.\n\nFor reinsurance written on a risks attaching or, equivalently, an underwriting period basis, current reinsurance contracts are fully matched to the underlying insurance portfolios. Reinsurance coverage for the underlying portfolio is recognised as the underlying policies are written.\n\nFor reinsurance written on a losses occurring basis, current reinsurance contracts provide coverage for any risks exposed during the reinsurance period irrespective of when the underlying business was written. Such reinsurance covers both the unexpired portion of policies in force at the contract commencement date and that portion of new business and renewals written during the year that is earned up to the contract expiry date. This latter portion relates to business which has not yet been written at the contract commencement date.\n\nAPRA would expect that initially the full minimum and deposit premium would be recognised as an expense, with any necessary adjustments due to experience at subsequent reporting dates.\n\nWhere payments under a reinsurance contract extend beyond the current year of cover, reinsurance expense is to be discounted using similar discount rates as required in measuring insurance liabilities in accordance with AASB 1023.\n\n(9) and (10) GRF 300.0 Deferred Reinsurance Expense (DRE)\n\nDeferred Reinsurance Expense is to be reported in this form at both the start of the financial year and the end of the reporting period. Deferred Reinsurance Expense is to be reported in this form as per GRF 300.0 Statement of Financial Position.\n\n(11) Total Reinsurance expense\n\nThis column is calculated automatically by the form and represents The sum of column (8) and column (9), less column (10).\n\nFor some insurers the reinsurance expense reported in this column may be different from the reinsurance expense reported at column 13.\n\n(12) Net premium revenue\n\nThis is automatically calculated by the form and represents the AASB 1023 Gross earned premium (including FSL) less total reinsurance expense.\n\n(13) Total reinsurance expense per AASB 1023\n\nReport the total reinsurance expense that would be reported under AASB 1023. Where there is no difference from column 11 ‘Total Reinsurance expense’ input the same number as in column 11. Where the insurer does not ordinarily calculate reinsurance expense under AASB 1023, input zero.. This item is a memo item for reconciliation purposes only.\n\nBusiness with related entities:\n\nReport premium revenue/reinsurance expense items which are from/in connection with the following related entities. Related parties have been defined earlier in this instruction guide:\n\n1.  Parent entity\n2.  Controlled entities / Controlled entities of the parent entity\n\nFor branches, the line item ’Controlled entities / Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\n3. Associates / Joint Ventures\n\n4. Other related parties","sortOrder":15},{"sectionNumber":"Introduction","sectionType":"division","heading":"Introduction","content":"### Introduction\n\nThe purpose of GRF 310.1 Premium Revenue and Reinsurance Expense is to provide information on written and earned premium revenue gross and net of reinsurance expense by class of business, which supports the summarised underwriting result disclosed in GRF 310.0 Statement of Financial Performance.\n\nThe form reports total gross written, gross earned and net earned premium revenue by class of business, on accrual and cashflow bases, for both direct and inwards reinsurance business.\n\nThe following items should be reported:\n\n1.  total gross written premium;\n2.  gross written premium relating to unclosed business;\n3.  gross unearned premium liability at the beginning of the financial year on a AASB 1023 basis;\n4.  gross unearned premium liability at the end of the reporting period on a AASB 1023 basis;\n5.  gross earned premium on a AASB 1023 ‘General Insurance Contracts’ (AASB 1023) basis excluding fire service levy and other levies imposed by state and territory governments;\n6.  fire service levy and other levies imposed by state and territory governments;\n7.  gross earned premium on a AASB 1023 basis including fire service levy and other levies imposed by state and territory governments;\n8.  outwards reinsurance expense on a AASB 1023 basis;\n9.  deferred reinsurance expense asset at the beginning of the financial year based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n10.  deferred reinsurance expense asset at the end of the reporting period based on deferred reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n11.  total reinsurance expense reported in GRF 300.0 Statement of Financial Position;\n12.  net earned premium revenue; and\n13.  total reinsurance expense as reported under AASB 1023.","sortOrder":16},{"sectionNumber":"Reporting entity","sectionType":"part","heading":"Reporting entity","content":"## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).","sortOrder":18},{"sectionNumber":"Definitions","sectionType":"subdivision","heading":"Definitions","content":"#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 are:\n\n1.  Foreign currency monetary items outstanding at the reporting date[\\[5\\]](#_ftn5) must be translated at the spot rate[\\[6\\]](#_ftn6) at the reporting date.\n\n2. Foreign currency non-monetary items[\\[7\\]](#_ftn7) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n\n3. Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.","sortOrder":19},{"sectionNumber":"Reporting period","sectionType":"part","heading":"Reporting period","content":"## Reporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.","sortOrder":20},{"sectionNumber":"Reporting lag","sectionType":"part","heading":"Reporting lag","content":"## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.1 Premium Revenue and Reinsurance Expense.","sortOrder":21},{"sectionNumber":"Basis of preparation","sectionType":"part","heading":"Basis of preparation","content":"## Basis of preparation\n\nInsurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.","sortOrder":22},{"sectionNumber":"Netting","sectionType":"part","heading":"Netting","content":"## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Insurance Business\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/Householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic Motor Vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)","sortOrder":23},{"sectionNumber":"Fire","sectionType":"section","heading":"Fire","content":"##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.","sortOrder":24},{"sectionNumber":"ISR","sectionType":"section","heading":"ISR","content":"##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory Third Party Motor Vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and Product Liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.","sortOrder":25},{"sectionNumber":"2. Reinsurance Business","sectionType":"subdivision","heading":"2. Reinsurance Business","content":"#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.","sortOrder":26},{"sectionNumber":"Premium revenue","sectionType":"section","heading":"Premium revenue","content":"###### Premium revenue\n\nPremium revenue must be reported separately for:\n\n-   Direct business; and\n-   Inwards reinsurance business.\n\nPremium revenue must be recognised on a basis that is consistent with the requirements of AASB 1023.\n\nIn accordance with AASB 1023:\n\n-   Premium revenue shall be recognised from the attachment date as soon as there is a basis on which it can be reliably estimated:\n-   over the period of the general insurance contract for direct business; or\n-   over the period of indemnity for reinsurance business;\n\nin accordance with the pattern of the incidence of risk expected under the general insurance contract[\\[8\\]](#_ftn8).\n\n-   Reinsurers are required to recognise the premium based on the gross premium income to be written by the direct insurer under the contract for proportional reinsurance. For excess of loss reinsurance contracts, the premium revenue is to be recognised on the basis of the agreed minimum/deposit premium, which will be subject to a final adjustment factor applied to the final declared values of the premium determined.\n-   Premium revenue must be discounted where it is to be received beyond the current year of cover under an insurance/reinsurance contract. In these cases, use the discount rate as required in calculating outstanding claims liabilities in accordance with AASB 1023.\n-   Premium revenue excludes amounts collected on behalf of third parties i.e. government stamp duty and taxes.\n-   Levies charged to insured, such as fire service levies, are to be included as total premium revenue, but are to be reported separately.\n-   Premium refunds and rebates are to be deducted from premium revenue.\n-   For instalment premium policies, the amount of the annualised premium is to be used.\n-   Where premium is calculated on an adjustment basis, the estimated annual premium is to be brought to account, with the estimated premium being replaced by the actual amount as it becomes known.\n-   Where premium is accepted on a deposit basis, the full annual premium is to be brought into account.\n-   Premium revenue must be gross of reinsurance expense.\n-   Total gross written premium includes premium receivable on unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but where there is insufficient information to fully identify the business.\n\nPart 1 and Part 2\n\nFor ‘Direct Business” and ‘Inwards Reinsurance Business’, amounts are to be reported as follows:\n\n(1) Total gross written premium revenue\n\nReport premium revenue from business written directly by the insurer in ‘Part 1: Direct Business’. Report inwards reinsurance premiums under ‘Part 2: Reinsurance Business’. This should exclude Fire Service Levy (FSL) or other levies imposed by state and territory governments.\n\nAlso includes business sourced through insurance intermediaries such as co-insurance, underwriting pools or joint ventures, or portfolio transfers.\n\nJoint ventures\n\nJoint ventures are to be interpreted as defined by the AASB 131 ‘Interests in Joint Ventures’.\n\nCoinsurance and underwriting pools\n\nInsurance business allocated through underwriting pools and coinsurance arrangements by an entity acting as agent must be accounted for by the accepting insurer as direct insurance business (AASB 1023).\n\nDirect insurers or reinsurers may form underwriting pools or enter coinsurance arrangements as vehicles for jointly insuring particular risks or types of risks. Premiums, claims and other expenses are usually shared in agreed ratios by insurers involved in these arrangements. Many underwriting pools and coinsurance arrangements involve the acceptance of risks by an entity acting as an agent for pool members or coinsurers. The entity receives premiums and pays claims and expenses, and allocates shares of the business to each pool member or coinsurer in agreed ratios. As the entity acting as agent is not an insurer, the business allocated to pool members and coinsurers is not reinsurance business. Pool members and coinsurers will need to treat such business allocated to them as direct insurance business.[\\[9\\]](#_ftn9)\n\nSome underwriting pools and coinsurance arrangements involve members of the pool or coinsurers directly underwriting risks and then passing all of those risks into the pool or arrangement. These risks are then shared among pool members or coinsurers. For this type of underwriting pool or arrangement, an insurer treats its share of the business that other insurers place with the pool or arrangement as inwards reinsurance, and the business that it writes and passes into the pool or arrangement as direct insurance business which it reinsures to the extent of the shares in the pool or arrangement of the other pool members or coinsurers. This approach results in the insurer properly reflecting its obligations to those it has directly insured and the substance of the transactions with the pool members or coinsurers.\n\nPortfolio transfers\n\nPortfolio transfer, as defined by AASB 1023, is a term used to describe the process by which premiums and claims on direct insurance business is transferred from one insurer to another by means of direct sale, not by reinsurance.\n\nWhen responsibility in relation to claims on transferred insurance business passes from the transferring insurer to the accepting insurer the transfer must be accounted for as a portfolio assumption by the accepting insurer, and a portfolio withdrawal by the transferring insurer. In this instance, the accepting insurers will recognise the amount of unexpired premium revenue and insurance liabilities for which the transferring insurer is no longer responsible. Transfers of business effected through the Insurance Act requiring Federal Court approval shall be treated in this manner.\n\nWhere the responsibility in relation to claims on transferred insurance business remains with the transferring business, the transfer shall be treated by the transferring insurer and the accepting insurer as reinsurance business.","sortOrder":27},{"sectionNumber":"Premiums Received on a cashflow basis (i","sectionType":"section","heading":"Premiums Received on a cashflow basis (in Part 3: Total)","content":"###### Premiums Received on a cashflow basis (in Part 3: Total)\n\nThis is the amount of premiums actually received over the reporting period (on a year to date basis). It is to be reported in aggregate for direct written business and reinsurance business.\n\nThis relates to all premiums received on a cashflow basis in the current financial year, regardless of the financial year in which the premiums may have been recognised as revenue (i.e. a prior financial year).\n\n(2) Gross written premium revenue relating to unclosed business\n\nThis column requires separate identification of gross premium revenue relating to unclosed business. This includes the business which has been accepted by the insurer/reinsurer prior to the balance date but there is insufficient information to fully identify the business.\n\n(3) and (4) AASB 1023 Gross unearned premium liability (UPL)\n\nGross UPL is to be reported in this form at both the start of the financial year and the end of the reporting period. The UPL is to be reported in this form in accordance with AASB 1023.\n\n(5) AASB 1023 Gross earned premium (excluding FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (1) and column (3), less column (4).\n\n(6) Fire service levy and other levies imposed by state and territory governments\n\nReport separately FSL and any other levies imposed by state and territory governments.\n\n(7) AASB 1023 Gross earned premium (including FSL)\n\nThis column is calculated automatically by the form and represents the sum of column (5) and column (6).\n\n(8) Reinsurance expense\n\nReinsurance expense is to be recognised in accordance with the pattern of reinsurance service received as required by AASB 1023.\n\nReinsurance expense will be recognised from the attachment date over the period of indemnity of the reinsurance contract in accordance with the expected pattern of the incidence of risk. This may vary according to the type of reinsurance contract as outlined below.\n\nFor reinsurance written on a risks attaching or, equivalently, an underwriting period basis, current reinsurance contracts are fully matched to the underlying insurance portfolios. Reinsurance coverage for the underlying portfolio is recognised as the underlying policies are written.\n\nFor reinsurance written on a losses occurring basis, current reinsurance contracts provide coverage for any risks exposed during the reinsurance period irrespective of when the underlying business was written. Such reinsurance covers both the unexpired portion of policies in force at the contract commencement date and that portion of new business and renewals written during the year that is earned up to the contract expiry date. This latter portion relates to business which has not yet been written at the contract commencement date.\n\nAPRA would expect that initially the full minimum and deposit premium would be recognised as an expense, with any necessary adjustments due to experience at subsequent reporting dates.\n\nWhere payments under a reinsurance contract extend beyond the current year of cover, reinsurance expense is to be discounted using similar discount rates as required in measuring insurance liabilities in accordance with AASB 1023.\n\n(9) and (10) GRF 300.0 Deferred Reinsurance Expense (DRE)\n\nDeferred Reinsurance Expense is to be reported in this form at both the start of the financial year and the end of the reporting period. Deferred Reinsurance Expense is to be reported in this form as per GRF 300.0 Statement of Financial Position.\n\n(11) Total Reinsurance expense\n\nThis column is calculated automatically by the form and represents The sum of column (8) and column (9), less column (10).\n\nFor some insurers the reinsurance expense reported in this column may be different from the reinsurance expense reported at column 13.\n\n(12) Net premium revenue\n\nThis is automatically calculated by the form and represents the AASB 1023 Gross earned premium (including FSL) less total reinsurance expense.\n\n(13) Total reinsurance expense per AASB 1023\n\nReport the total reinsurance expense that would be reported under AASB 1023. Where there is no difference from column 11 ‘Total Reinsurance expense’ input the same number as in column 11. Where the insurer does not ordinarily calculate reinsurance expense under AASB 1023, input zero.. This item is a memo item for reconciliation purposes only.\n\nBusiness with related entities:\n\nReport premium revenue/reinsurance expense items which are from/in connection with the following related entities. Related parties have been defined earlier in this instruction guide:\n\n1.  Parent entity\n2.  Controlled entities / Controlled entities of the parent entity\n\nFor branches, the line item ’Controlled entities / Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\n3. Associates / Joint Ventures\n\n4. Other related parties","sortOrder":28},{"sectionNumber":"Reporting Form GRF 310.2","sectionType":"part","heading":"Reporting Form GRF 310.2","content":"## Reporting Form GRF 310.2\n\n## Claims Expense and Reinsurance Recoveries\n\n### Instruction Guide\n\n### Introduction\n\nThe purpose of form GRF 310.2 Claims Expense and Reinsurance Recoveries is to provide information on the following:\n\n1.  Claims expense by class of business (direct business and reinsurance), broken down into the following components:\n\n-   claim payments made in the current year; and\n-   movements in outstanding claims Liability (OCL).\n\n2. Reinsurance recoveries revenue by class of business (direct business and reinsurance business relating to current and prior years;\n\n3. Recoveries other than reinsurance by class of business (direct business and reinsurance business) relating to current and prior years\n\n4. Reinsurance recoveries received on a cashflow basis (i.e. payments received rather than accrued); and\n\n5. Claims paid on a cashflow basis (i.e. actually paid rather than accrued).\n\n#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\n## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).\n\n#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 for translation are:\n\n1.  Foreign currency monetary items[\\[10\\]](#_ftn10) outstanding at the reporting date must be translated at the spot rate[\\[11\\]](#_ftn11) at the reporting date.\n2.  Foreign currency non-monetary items[\\[12\\]](#_ftn12) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n3.  Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 ‘Financial Instruments: Recognition and Measurement’ (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\nReporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\n## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.2 Claims Expense and Reinsurance Recoveries.\n\nBasis of preparation\n\nUnless specifically mentioned in these instructions insurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.\n\n## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Business (1)\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial motor vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic motor vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic motor vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)\n\n##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.\n\n##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory third party motor vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and product liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.\n\n#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.\n\n###### Part 1 and Part 2\n\n###### Claims expense\n\nClaims expense for the purpose of this form is reported in relation to the following:\n\n-   claim payments made in the current year, and\n-   movements in OCL.\n\nThe column ‘Total gross claims expense’ is calculated automatically and is derived from the above components in the following way:\n\n-   claim payments made in the current year\n\nLess:\n\n-   OCL at beginning of financial year\n\nAdd:\n\n-   OCL at the end of the reporting period\n\nNote: All components required for the calculation of ‘Total gross claims expense’ are to be reported gross of reinsurance recoveries and non-reinsurance recoveries.\n\nClaims expense that relates to movements in the OCL is to be based on the OCL that is reported in GRF 300.0 Statement of Financial Position.\n\nNote: The OCL reported in GRF 300.0Statement of Financial Position does not have to be equal to the amounts required by Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation or the amounts reported in GRF 210.0 Outstanding Claims Provision \\- Insurance Risk Charge.\n\nThe total amount of claims expense reported in this form must match the total claims expense reported in the line item titled ‘Gross Claims Expense’ in GRF 310.0 Statement of Financial Performance.\n\nThe claims expense is to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nOther recoveries revenue relating to current and prior years\n\nReport the amount of recoveries other than reinsurance in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years\n\nRecoveries other than reinsurance are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nReinsurance recoveries revenue relating to current and prior years\n\nReport the amount of reinsurance recoveries in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years.\n\nThe total amount reported in this form for this component must match the item titled ‘Reinsurance recoveries revenue relating to current and prior years’ in GRF 310.0 Statement of Financial Performance.\n\nReinsurance recoveries are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nNet claims expense\n\nThis is calculated automatically by the form and is derived as follows:\n\n-   Total gross claims expense\n\nLess\n\n-   Other recoveries revenue relating to current and prior years\n\nLess\n\n-   Reinsurance recoveries revenue relating to current and prior years.\n\nCurrent period net claims expense\n\nReport at this item by class of business:\n\n-   current period claims payments;\n-   current period reported outstanding case estimates (that is case estimates created in the current period); and\n-   current period incurred by not reported (IBNR) (and incurred but not enough reported) claims expenses.\n\nCurrent period net claims expense should be defined and reported according to the following:\n\n-   the current period is defined as the current financial year to date;\n-   net of all recoverables (including input tax credits (ITCs), reinsurance, salvage, subrogation and other recovery types);\n-   inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;\n-   the outstanding claims component be inflated only i.e. undiscounted; and\n-   the outstanding claims component be on a central estimate basis i.e. without risk margins.\n\nNon-recurring items that are part of total net claims expense\n\nReport the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ in this column.\n\nQuarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.\n\n###### Reinsurance recoveries received (cashflow basis)\n\nReport the amount of reinsurance recoveries received over the reporting period (on a year-to-date basis) in aggregate for direct business and inwards reinsurance business (i.e. disclosure in relation to individual class of business is not required). Do not include reinsurance recoveries recognised on an accrual basis, as that is recognised in ‘Reinsurance recoveries revenue relating to current and prior years’.\n\nThis relates to all reinsurance recoveries received on a cashflow basis in the current financial year, regardless of the financial year in which the reinsurance recovery may have been recognised as revenue (i.e. a prior financial year).\n\n###### Claims paid (cashflow basis)\n\nReport the amount of claims actually paid over the reporting period (on a year-to-date basis) in aggregate for direct written business and inwards reinsurance business (i.e. disclosure of claims paid in relation to individual class of business is not required). This relates to all claims paid on a cashflow basis in the current financial year, regardless of the financial year in which the claim may have been recognised as an expense (i.e. a prior financial year).\n\nBusiness with related entities:\n\n1.  Parent entity\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are in connection with/from the parent entity of the licensed insurer.\n\n2. Controlled entities / Controlled entities of the parent\n\nFor branches, the line item ‘Controlled entities/Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from the controlled entities.\n\n3. Associates / Joint Ventures\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from Associates or Joint Ventures of the licensed insurer. Associates and Joint Ventures are defined in accordance with AASB 131 ‘Interests in Joint Ventures’ and AASB 128 ‘Investments in Associates’.\n\n4. Other related entities\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from any other related entity of the licensed insurer that are not specifically identified above. Refer to the definition of related parties as defined in the general section of this instruction guide.","sortOrder":29},{"sectionNumber":"Claims Expense and Reinsurance Recoverie","sectionType":"part","heading":"Claims Expense and Reinsurance Recoveries","content":"## Reporting Form GRF 310.2\n\n## Claims Expense and Reinsurance Recoveries\n\n### Instruction Guide\n\n### Introduction\n\nThe purpose of form GRF 310.2 Claims Expense and Reinsurance Recoveries is to provide information on the following:\n\n1.  Claims expense by class of business (direct business and reinsurance), broken down into the following components:\n\n-   claim payments made in the current year; and\n-   movements in outstanding claims Liability (OCL).\n\n2. Reinsurance recoveries revenue by class of business (direct business and reinsurance business relating to current and prior years;\n\n3. Recoveries other than reinsurance by class of business (direct business and reinsurance business) relating to current and prior years\n\n4. Reinsurance recoveries received on a cashflow basis (i.e. payments received rather than accrued); and\n\n5. Claims paid on a cashflow basis (i.e. actually paid rather than accrued).\n\n#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\n## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).\n\n#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 for translation are:\n\n1.  Foreign currency monetary items[\\[10\\]](#_ftn10) outstanding at the reporting date must be translated at the spot rate[\\[11\\]](#_ftn11) at the reporting date.\n2.  Foreign currency non-monetary items[\\[12\\]](#_ftn12) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n3.  Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 ‘Financial Instruments: Recognition and Measurement’ (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\nReporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\n## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.2 Claims Expense and Reinsurance Recoveries.\n\nBasis of preparation\n\nUnless specifically mentioned in these instructions insurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.\n\n## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Business (1)\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial motor vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic motor vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic motor vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)\n\n##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.\n\n##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory third party motor vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and product liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.\n\n#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.\n\n###### Part 1 and Part 2\n\n###### Claims expense\n\nClaims expense for the purpose of this form is reported in relation to the following:\n\n-   claim payments made in the current year, and\n-   movements in OCL.\n\nThe column ‘Total gross claims expense’ is calculated automatically and is derived from the above components in the following way:\n\n-   claim payments made in the current year\n\nLess:\n\n-   OCL at beginning of financial year\n\nAdd:\n\n-   OCL at the end of the reporting period\n\nNote: All components required for the calculation of ‘Total gross claims expense’ are to be reported gross of reinsurance recoveries and non-reinsurance recoveries.\n\nClaims expense that relates to movements in the OCL is to be based on the OCL that is reported in GRF 300.0 Statement of Financial Position.\n\nNote: The OCL reported in GRF 300.0Statement of Financial Position does not have to be equal to the amounts required by Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation or the amounts reported in GRF 210.0 Outstanding Claims Provision \\- Insurance Risk Charge.\n\nThe total amount of claims expense reported in this form must match the total claims expense reported in the line item titled ‘Gross Claims Expense’ in GRF 310.0 Statement of Financial Performance.\n\nThe claims expense is to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nOther recoveries revenue relating to current and prior years\n\nReport the amount of recoveries other than reinsurance in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years\n\nRecoveries other than reinsurance are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nReinsurance recoveries revenue relating to current and prior years\n\nReport the amount of reinsurance recoveries in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years.\n\nThe total amount reported in this form for this component must match the item titled ‘Reinsurance recoveries revenue relating to current and prior years’ in GRF 310.0 Statement of Financial Performance.\n\nReinsurance recoveries are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nNet claims expense\n\nThis is calculated automatically by the form and is derived as follows:\n\n-   Total gross claims expense\n\nLess\n\n-   Other recoveries revenue relating to current and prior years\n\nLess\n\n-   Reinsurance recoveries revenue relating to current and prior years.\n\nCurrent period net claims expense\n\nReport at this item by class of business:\n\n-   current period claims payments;\n-   current period reported outstanding case estimates (that is case estimates created in the current period); and\n-   current period incurred by not reported (IBNR) (and incurred but not enough reported) claims expenses.\n\nCurrent period net claims expense should be defined and reported according to the following:\n\n-   the current period is defined as the current financial year to date;\n-   net of all recoverables (including input tax credits (ITCs), reinsurance, salvage, subrogation and other recovery types);\n-   inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;\n-   the outstanding claims component be inflated only i.e. undiscounted; and\n-   the outstanding claims component be on a central estimate basis i.e. without risk margins.\n\nNon-recurring items that are part of total net claims expense\n\nReport the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ in this column.\n\nQuarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.\n\n###### Reinsurance recoveries received (cashflow basis)\n\nReport the amount of reinsurance recoveries received over the reporting period (on a year-to-date basis) in aggregate for direct business and inwards reinsurance business (i.e. disclosure in relation to individual class of business is not required). Do not include reinsurance recoveries recognised on an accrual basis, as that is recognised in ‘Reinsurance recoveries revenue relating to current and prior years’.\n\nThis relates to all reinsurance recoveries received on a cashflow basis in the current financial year, regardless of the financial year in which the reinsurance recovery may have been recognised as revenue (i.e. a prior financial year).\n\n###### Claims paid (cashflow basis)\n\nReport the amount of claims actually paid over the reporting period (on a year-to-date basis) in aggregate for direct written business and inwards reinsurance business (i.e. disclosure of claims paid in relation to individual class of business is not required). This relates to all claims paid on a cashflow basis in the current financial year, regardless of the financial year in which the claim may have been recognised as an expense (i.e. a prior financial year).\n\nBusiness with related entities:\n\n1.  Parent entity\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are in connection with/from the parent entity of the licensed insurer.\n\n2. Controlled entities / Controlled entities of the parent\n\nFor branches, the line item ‘Controlled entities/Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from the controlled entities.\n\n3. Associates / Joint Ventures\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from Associates or Joint Ventures of the licensed insurer. Associates and Joint Ventures are defined in accordance with AASB 131 ‘Interests in Joint Ventures’ and AASB 128 ‘Investments in Associates’.\n\n4. Other related entities\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from any other related entity of the licensed insurer that are not specifically identified above. Refer to the definition of related parties as defined in the general section of this instruction guide.","sortOrder":30},{"sectionNumber":"Part 1 and Part 2","sectionType":"section","heading":"Part 1 and Part 2","content":"## Reporting Form GRF 310.2\n\n## Claims Expense and Reinsurance Recoveries\n\n### Instruction Guide\n\n### Introduction\n\nThe purpose of form GRF 310.2 Claims Expense and Reinsurance Recoveries is to provide information on the following:\n\n1.  Claims expense by class of business (direct business and reinsurance), broken down into the following components:\n\n-   claim payments made in the current year; and\n-   movements in outstanding claims Liability (OCL).\n\n2. Reinsurance recoveries revenue by class of business (direct business and reinsurance business relating to current and prior years;\n\n3. Recoveries other than reinsurance by class of business (direct business and reinsurance business) relating to current and prior years\n\n4. Reinsurance recoveries received on a cashflow basis (i.e. payments received rather than accrued); and\n\n5. Claims paid on a cashflow basis (i.e. actually paid rather than accrued).\n\n#### Audit requirements\n\nThe form relating to authorised insurance entities and reinsurance entities is required to be subject to audit review and testing.\n\nThe scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.\n\nInformation provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:\n\n-   the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);\n\n-   the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));\n-   the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));\n-   the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.\n\n## Reporting entity\n\nForms are to be completed for the following reporting entities where appropriate:\n\n1.  Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);\n2.  Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity); and\n3.  Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity).\n\n#### Definitions\n\nDefinitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.\n\nUnit of measurement\n\nAmounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ (AASB 121).\n\nThe general requirements of AASB 121 for translation are:\n\n1.  Foreign currency monetary items[\\[10\\]](#_ftn10) outstanding at the reporting date must be translated at the spot rate[\\[11\\]](#_ftn11) at the reporting date.\n2.  Foreign currency non-monetary items[\\[12\\]](#_ftn12) that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.\n3.  Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.\n\nTransactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’ (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 ‘Financial Instruments: Recognition and Measurement’ (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.\n\nFor APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.\n\nAs foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.\n\nExchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.\n\nThe ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.\n\n4. Translation of financial reports of foreign operations.\n\nA foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.\n\n-   Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.\n\n-   Translation of financial reports should otherwise follow the requirements in AASB 121.\n\nReporting period\n\nInsurers are required to report the information in the reporting form on a quarterly and annual basis.\n\n-   The quarterly information is to be completed in respect of each quarter based on the financial year of the insurer, not the calendar year.\n-   The annual information is to be completed in respect of the financial year of the insurer.\n-   The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.\n\n## Reporting lag\n\nThis form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 310.2 Claims Expense and Reinsurance Recoveries.\n\nBasis of preparation\n\nUnless specifically mentioned in these instructions insurers should follow the recognition and measurement requirements of the Australian accounting standards in completing this form.\n\nThe interpretation and required measurement basis for items listed in the form are specified in these instructions.\n\n## Netting\n\nUnless otherwise specifically stated, institutions are allowed to take advantage of netting agreements in relation to disclosure of data items in this form. Institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 7 ‘Financial Instruments: Disclosures’, AASB 139 and AASB 132 ‘Financial Instruments: Presentation’.\n\nRelated party disclosure\n\nAmounts due from, loans to, debentures of, shares in, or units in a trust or body corporate that is related to the insurer are to be disclosed for items of assets and liabilities where indicated in the form. For the purposes of this form, related bodies corporate are to be interpreted consistently with the meaning as in AASB 124 ‘Related Party Disclosures’ (AASB 124).\n\nIn accordance with AASB 124, related party means a party that directly or indirectly through one or more intermediaries:\n\n(a) controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);\n\n(b) has significant influence over the entity or has joint control over the entity; or\n\n(c) is an associate (as defined in AASB 128 ‘Investments in Associates’) of the entity; or\n\n(d) is a joint venture in which the entity is a venturer (see AASB 131 ‘Interests in Joint Ventures’); or\n\n(e) is a member of the key management personnel of the entity or its parent; or\n\n(f) is a close member of the family of any individual referred to in (a), (b) or (e); or\n\n(g) is an entity that its controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (e) or in (f); or\n\n(h) is a post-employment benefit plan for the benefit of the employees of the entity, or of any entity that is a related party of the entity.\n\n  \nSpecific instructions\n\nClasses of Business (1)\n\n1.  Direct Business\n\nThe classes of insurance business are as follows:\n\n(I). Houseowners/householders (H & H)\n\nThis class covers the common H & H policies inclusive of:\n\n-   Contents;\n-   Personal property;\n-   Arson; and\n-   Burglary.\n\nPublic liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).\n\n(II). Commercial motor vehicle\n\nMotor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic motor vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.\n\n(III). Domestic motor vehicle\n\nMotor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.\n\n(IV). Travel\n\nInsurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.\n\n(V). Fire and Industrial Special Risks (ISR)\n\n##### Fire\n\nIncludes all policies normally classified as 'Fire' and includes:\n\n-   sprinkler leakage;\n-   subsidence;\n-   windstorm;\n-   hailstone;\n-   crop;\n-   arson; and\n-   loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.\n\n##### ISR\n\nStandard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.\n\n(VI). Marine\n\nIncludes Marine Hull (including pleasure craft) and Marine Cargo (including sea and inland transit insurance).\n\n(VII). Aviation\n\nAviation (including aircraft hull and aircraft liability).\n\n(VIII). Mortgage\n\nInsurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.\n\n(IX). Consumer credit\n\nInsurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.\n\n(X). Other accident\n\nIncludes the following types of insurance:\n\n-   Miscellaneous accident (involving cash in transit, theft, loss of money);\n-   All risks (baggage, sporting equipment, guns);\n-   Engineering when not part of ISR or Fire policy;\n-   Plate glass when not part of packaged policy (e.g. houseowners /householders)\n-   Guarantee (Insurance Bonds);\n-   Live Stock;\n-   Pluvius; and\n-   Sickness and Accident which by the terms of the policy provides benefits for no more than three years.\n\n(XI). Other\n\nAll other insurance business not specifically mentioned elsewhere. It includes, for example:\n\n-   Trade Credit;\n-   Extended Warranty (where the insurer extends a manufacturer's or seller’s normal warranty;\n-   Kidnap and Ransom; and\n-   Contingency.\n\n(XII). Compulsory third party motor vehicle (CTP)\n\nThis class consists only of CTP business.\n\n(XIII). Public and product liability\n\n-   Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods. and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.\n-   Also will include builders warranty insurance.\n-   Includes public liability attaching to houseowners/householders policies.\n\n(XIV). Professional Indemnity (PI)\n\nPI covers professionals against liability incurred as a result of errors and omissions in performing professional services which has resulted in economic losses suffered by third parties.\n\nIncludes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.\n\n(XV). Employers' Liability (EL)\n\nIncludes:\n\n-   Workers' compensation;\n-   Seamen's compensation; and\n-   Domestic workers compensation.\n\n#### 2. Reinsurance Business\n\nThe classes of business for companies that provide reinsurance are as follows:\n\nTreaty Proportional: This refers to all forms of quota share and surplus reinsurance written on a treaty reinsurance arrangement where the reinsurer is bound to accept all business ceded by the reinsured subject to the terms and conditions of the pre-agreed treaty wording, and shares in the same proportion of premium and losses of the reinsured.\n\nTreaty Excess of Loss: This refers to all reinsurance arrangements where the reinsurer is bound to accept all business ceded by the reinsured and the reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nFacultative Proportional: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis and the reinsurer shares in the same proportion of premium and losses of the reinsured.\n\nFacultative Excess of Loss: This refers to non-treaty arrangements where each reinsurance contract is on an individual offer and acceptance basis. The reinsurer pays losses only above an agreed predetermined limit (retention) up to an agreed maximum amount.\n\nReinsurance non-split: This line item classification disclosed under Reinsurance class of business is to be used where it is not possible for the insurer to separately split out all the classes of reinsurance businesses.\n\nWhere an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, the contract must be allocated using an appropriate method, including the following methods:\n\n(a) allocate the contract to the category which represents the greatest exposure; or\n\n(b) allocate the contract to the category representing the greatest premium income.\n\nAn insurer that underwrites inwards reinsurance is free to choose which of the above methods it uses, or may use another appropriate method, provided the same method is used for all contracts and all subsequent periods.\n\n###### Part 1 and Part 2\n\n###### Claims expense\n\nClaims expense for the purpose of this form is reported in relation to the following:\n\n-   claim payments made in the current year, and\n-   movements in OCL.\n\nThe column ‘Total gross claims expense’ is calculated automatically and is derived from the above components in the following way:\n\n-   claim payments made in the current year\n\nLess:\n\n-   OCL at beginning of financial year\n\nAdd:\n\n-   OCL at the end of the reporting period\n\nNote: All components required for the calculation of ‘Total gross claims expense’ are to be reported gross of reinsurance recoveries and non-reinsurance recoveries.\n\nClaims expense that relates to movements in the OCL is to be based on the OCL that is reported in GRF 300.0 Statement of Financial Position.\n\nNote: The OCL reported in GRF 300.0Statement of Financial Position does not have to be equal to the amounts required by Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation or the amounts reported in GRF 210.0 Outstanding Claims Provision \\- Insurance Risk Charge.\n\nThe total amount of claims expense reported in this form must match the total claims expense reported in the line item titled ‘Gross Claims Expense’ in GRF 310.0 Statement of Financial Performance.\n\nThe claims expense is to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nOther recoveries revenue relating to current and prior years\n\nReport the amount of recoveries other than reinsurance in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years\n\nRecoveries other than reinsurance are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nReinsurance recoveries revenue relating to current and prior years\n\nReport the amount of reinsurance recoveries in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years.\n\nThe total amount reported in this form for this component must match the item titled ‘Reinsurance recoveries revenue relating to current and prior years’ in GRF 310.0 Statement of Financial Performance.\n\nReinsurance recoveries are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nNet claims expense\n\nThis is calculated automatically by the form and is derived as follows:\n\n-   Total gross claims expense\n\nLess\n\n-   Other recoveries revenue relating to current and prior years\n\nLess\n\n-   Reinsurance recoveries revenue relating to current and prior years.\n\nCurrent period net claims expense\n\nReport at this item by class of business:\n\n-   current period claims payments;\n-   current period reported outstanding case estimates (that is case estimates created in the current period); and\n-   current period incurred by not reported (IBNR) (and incurred but not enough reported) claims expenses.\n\nCurrent period net claims expense should be defined and reported according to the following:\n\n-   the current period is defined as the current financial year to date;\n-   net of all recoverables (including input tax credits (ITCs), reinsurance, salvage, subrogation and other recovery types);\n-   inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;\n-   the outstanding claims component be inflated only i.e. undiscounted; and\n-   the outstanding claims component be on a central estimate basis i.e. without risk margins.\n\nNon-recurring items that are part of total net claims expense\n\nReport the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ in this column.\n\nQuarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.\n\n###### Reinsurance recoveries received (cashflow basis)\n\nReport the amount of reinsurance recoveries received over the reporting period (on a year-to-date basis) in aggregate for direct business and inwards reinsurance business (i.e. disclosure in relation to individual class of business is not required). Do not include reinsurance recoveries recognised on an accrual basis, as that is recognised in ‘Reinsurance recoveries revenue relating to current and prior years’.\n\nThis relates to all reinsurance recoveries received on a cashflow basis in the current financial year, regardless of the financial year in which the reinsurance recovery may have been recognised as revenue (i.e. a prior financial year).\n\n###### Claims paid (cashflow basis)\n\nReport the amount of claims actually paid over the reporting period (on a year-to-date basis) in aggregate for direct written business and inwards reinsurance business (i.e. disclosure of claims paid in relation to individual class of business is not required). This relates to all claims paid on a cashflow basis in the current financial year, regardless of the financial year in which the claim may have been recognised as an expense (i.e. a prior financial year).\n\nBusiness with related entities:\n\n1.  Parent entity\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are in connection with/from the parent entity of the licensed insurer.\n\n2. Controlled entities / Controlled entities of the parent\n\nFor branches, the line item ‘Controlled entities/Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from the controlled entities.\n\n3. Associates / Joint Ventures\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from Associates or Joint Ventures of the licensed insurer. Associates and Joint Ventures are defined in accordance with AASB 131 ‘Interests in Joint Ventures’ and AASB 128 ‘Investments in Associates’.\n\n4. Other related entities\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from any other related entity of the licensed insurer that are not specifically identified above. Refer to the definition of related parties as defined in the general section of this instruction guide.","sortOrder":41},{"sectionNumber":"Claims expense","sectionType":"section","heading":"Claims expense","content":"###### Claims expense\n\nClaims expense for the purpose of this form is reported in relation to the following:\n\n-   claim payments made in the current year, and\n-   movements in OCL.\n\nThe column ‘Total gross claims expense’ is calculated automatically and is derived from the above components in the following way:\n\n-   claim payments made in the current year\n\nLess:\n\n-   OCL at beginning of financial year\n\nAdd:\n\n-   OCL at the end of the reporting period\n\nNote: All components required for the calculation of ‘Total gross claims expense’ are to be reported gross of reinsurance recoveries and non-reinsurance recoveries.\n\nClaims expense that relates to movements in the OCL is to be based on the OCL that is reported in GRF 300.0 Statement of Financial Position.\n\nNote: The OCL reported in GRF 300.0Statement of Financial Position does not have to be equal to the amounts required by Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation or the amounts reported in GRF 210.0 Outstanding Claims Provision \\- Insurance Risk Charge.\n\nThe total amount of claims expense reported in this form must match the total claims expense reported in the line item titled ‘Gross Claims Expense’ in GRF 310.0 Statement of Financial Performance.\n\nThe claims expense is to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nOther recoveries revenue relating to current and prior years\n\nReport the amount of recoveries other than reinsurance in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years\n\nRecoveries other than reinsurance are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nReinsurance recoveries revenue relating to current and prior years\n\nReport the amount of reinsurance recoveries in relation to claims recognised in the calculation of the gross claims expense relating to current and prior years.\n\nThe total amount reported in this form for this component must match the item titled ‘Reinsurance recoveries revenue relating to current and prior years’ in GRF 310.0 Statement of Financial Performance.\n\nReinsurance recoveries are to be disclosed by type of business (i.e. direct business and inwards reinsurance business).\n\nNet claims expense\n\nThis is calculated automatically by the form and is derived as follows:\n\n-   Total gross claims expense\n\nLess\n\n-   Other recoveries revenue relating to current and prior years\n\nLess\n\n-   Reinsurance recoveries revenue relating to current and prior years.\n\nCurrent period net claims expense\n\nReport at this item by class of business:\n\n-   current period claims payments;\n-   current period reported outstanding case estimates (that is case estimates created in the current period); and\n-   current period incurred by not reported (IBNR) (and incurred but not enough reported) claims expenses.\n\nCurrent period net claims expense should be defined and reported according to the following:\n\n-   the current period is defined as the current financial year to date;\n-   net of all recoverables (including input tax credits (ITCs), reinsurance, salvage, subrogation and other recovery types);\n-   inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;\n-   the outstanding claims component be inflated only i.e. undiscounted; and\n-   the outstanding claims component be on a central estimate basis i.e. without risk margins.\n\nNon-recurring items that are part of total net claims expense\n\nReport the amount of ‘Net claims expense’ that has not been reported at ‘Current period net claims expense’ in this column.\n\nQuarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.","sortOrder":42},{"sectionNumber":"Reinsurance recoveries received (cashflo","sectionType":"section","heading":"Reinsurance recoveries received (cashflow basis)","content":"###### Reinsurance recoveries received (cashflow basis)\n\nReport the amount of reinsurance recoveries received over the reporting period (on a year-to-date basis) in aggregate for direct business and inwards reinsurance business (i.e. disclosure in relation to individual class of business is not required). Do not include reinsurance recoveries recognised on an accrual basis, as that is recognised in ‘Reinsurance recoveries revenue relating to current and prior years’.\n\nThis relates to all reinsurance recoveries received on a cashflow basis in the current financial year, regardless of the financial year in which the reinsurance recovery may have been recognised as revenue (i.e. a prior financial year).","sortOrder":43},{"sectionNumber":"Claims paid (cashflow basis)","sectionType":"section","heading":"Claims paid (cashflow basis)","content":"###### Claims paid (cashflow basis)\n\nReport the amount of claims actually paid over the reporting period (on a year-to-date basis) in aggregate for direct written business and inwards reinsurance business (i.e. disclosure of claims paid in relation to individual class of business is not required). This relates to all claims paid on a cashflow basis in the current financial year, regardless of the financial year in which the claim may have been recognised as an expense (i.e. a prior financial year).\n\nBusiness with related entities:\n\n1.  Parent entity\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are in connection with/from the parent entity of the licensed insurer.\n\n2. Controlled entities / Controlled entities of the parent\n\nFor branches, the line item ‘Controlled entities/Controlled entities of the parent’ is to be interpreted as amounts in relation to ‘Controlled entities of the parent’, and for licensed insurance entities amounts are in relation to ‘Controlled entities’ of the reporting insurer.\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from the controlled entities.\n\n3. Associates / Joint Ventures\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from Associates or Joint Ventures of the licensed insurer. Associates and Joint Ventures are defined in accordance with AASB 131 ‘Interests in Joint Ventures’ and AASB 128 ‘Investments in Associates’.\n\n4. Other related entities\n\nFor total gross claims expense, reinsurance recoveries and recoveries other than reinsurance reported in this form, disclose amounts that are with/from any other related entity of the licensed insurer that are not specifically identified above. Refer to the definition of related parties as defined in the general section of this instruction guide.","sortOrder":44}],"analysis":{"kimi_summary":{"_metrics":{"model":"kimi-k2.5","source":"moonshot-realtime","completionTokens":2872},"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose of establishing prudential reporting requirements for general insurers' financial performance data. While the text is highly detailed regarding accounting treatments and form completion instructions, it does not appear to have expanded beyond data collection for APRA supervision into broader regulatory areas such as consumer protection or market conduct."},"complexity_factors":["Extensive cross-referencing to Australian Accounting Standards (AASB 1023, AASB 121, AASB 139, AASB 124) and the Insurance Act 1973","Four separate reporting forms (GRF 310.0 to GRF 310.3) with highly granular line-item instructions and validation rules","Differentiated requirements for locally incorporated insurers versus foreign branch operations (e.g., separate form versions)","Detailed classification scheme for insurance business into 15+ direct classes (e.g., Householders, ISR, CTP) and multiple reinsurance treaty types","Dual reporting bases required simultaneously: accrual accounting (AASB 1023) and cashflow basis for certain items","Complex foreign currency translation provisions requiring spot-rate conversion and specific hedge accounting treatment","Integrated quality control and audit requirements that incorporate external prudential standards and auditor testing obligations","Conditional logic for submission methods (electronic vs paper) with specific digital certificate or physical signature requirements"],"plain_english_summary":"This standard requires Australian general insurers and foreign insurers operating in Australia to regularly submit detailed financial data to APRA—covering premium revenue, claims, investment and operating results—so APRA can monitor solvency and risk.  \n\nReports are due quarterly and annually (with APRA able to vary frequency), must be submitted electronically or by signed paper forms, and are subject to auditor review and board accountability to ensure accuracy and compliance with Australian accounting standards."}},"importantCases":[],"_links":{"self":"/api/acts/financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve","history":"/api/acts/financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve/history","analysis":"/api/acts/financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve/analysis","conflicts":"/api/acts/financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve/conflicts","importantCases":"/api/acts/financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve/important-cases","documents":"/api/acts/financial-sector-collection-of-data-reporting-standard-determination-no-10-of-2010-grs-310-2010-reve/documents"}}