Loans and advances are treated for the purposes of this return as investments of the Licensed Insurer or the consolidated Insurance group.
Generally Include:
Overdrafts and revolving credit facilities;;
Financial lease agreements;
Term loans;
Mortgage lending;
Commercial loans;
Equity participation in leveraged leases;
Subordinated loans; and
Secured and unsecured lending.
Definitions/interpretation for specific items
Balance Outstanding
Report the aggregate value of the outstanding loans gross of any provision for impairment for each loan classifications listed (i.e. households).
Value of Security
Report the aggregate market value of property or other forms of assets that are taken as security for the loan provided by the insurer.
Provision for Impairment
Report the aggregate provision for impairment applying to the particular loan portfolio/classifications listed (i.e. households).
For the purposes of the APRA forms, impairment means that there exists reasonable doubt that amounts of principal (or market value) and any associated amounts of accrued income (e.g. interest, dividends, distributions associated with the investment/asset) will be able to be collected by the Insurer
Balance Outstanding net of Provision for Impairment
Represents the outstanding balance less associated provision for impairment.
Loan classifications:
Loans and Advances to Households
This comprises loans to households for any purpose.
Loans and Advances to Private unincorporated businesses
This comprises individuals acting as sole proprietors or in partnerships, for commercial or professional purposes. The major businesses to be included are unincorporated farms, unincorporated retailers, unincorporated professional practices (medical, legal, dental, accounting, etc.), unincorporated businesses of tradesmen such as plumbers, carpenters, etc.
Loans and Advances to Private Trading Corporations
Private trading corporations are those owned and controlled by the private sector.
Include:
(i) Non-profit institutions;
(ii) Intra-group financiers, Retailers and parent companies with significant holdings of shares in private trading companies;
(iii) Privately owned schools and hospitals;;;
Part Specific instructions - Financial Sector (Collection of Data) determination No. 10 of 2005 - Specific instructions | Zoe
(iv) Any unincorporated unit that is a branch in Australia of a non-resident company; and
(v) Any unincorporated business owned and operated by trading corporations (e.g. joint ventures).
Loans and Advances – Other
Include all other loans and advances not disclosed on the form.
Total loans and advances which:
1.1 Are contracted at fixed rates
Of the total loans and advances of the reporting insurer (Consolidated Insurance Group) reported as required by this form, disclose the aggregate value of loans and advances that have been funded at a fixed interest rate.
1.2 Are contracted at a variable rate
Of the total loans and advances of the reporting insurer (Consolidated Insurance Group) reported as required by this form, disclose the aggregate value of loans and advances that have been funded at a variable interest rate.
1.3 Are contracted on an unsecured
Of the total loans and advances of the reporting insurer (Consolidated Insurance Group) reported as required by this form, disclose the value of any loans and advances where the Insurer has taken no security from the counterparty.
1.4 Repayment is past due date 90 days or more but less than 1 year
Report the outstanding balance of the loan, value of any security taken by the insurer as collateral for the loan and the value of any provision for impairment provided against the loan, for all loans where repayment is past the due date by 90 days or more, but less than 1 year.
1.5 Repayment is past due date 1 year or more
Report the outstanding balance of the loan, value of any security taken by the insurer as collateral for the loan and the value of any provision for impairment provided against the loan, for all loans where repayment is past the due date by 1 year or more.
1.6 Represent Shareholders funds
Disclose the aggregate balance of loans and advances that are designated as representing shareholders funds, where the insurer has established the investment management mandates along these terms to reflect the different cashflow/risk and return requirements of shareholders funds from policyholders/technical reserves.
1.7 Constitute premium funding business
Total Loans and advances, which can be classified into the following:
2.1 Debt obligations with a Rating Grade of 1 that matures or is redeemable:
in less than 1 year
in 1 year or more
Refer to GGN 110.4 Investment Risk Capital Charge, Attachment 2 for further information on classification of rating grades.
2.2 Debt obligations with a Rating Grade of 2 that matures or is redeemable:
in less than 1 year
in 1 year or more
Refer to GGN 110.4 Investment Risk Capital Charge, Attachment 2 for further information on classification of rating grades.
2.3 Debt obligations with a Rating Grade of 3
Refer to GGN 110.4 Investment Risk Capital Charge, Attachment 2 for further information on classification of rating grades.
2.4 Debt obligations with a Rating Grade of 4 or are unrated
Refer to GGN 110.4 Investment Risk Capital Charge, Attachment 2 for further information on classification of rating grades.
2.5 Debt obligations with a Rating Grade of 5
Refer to GGN 110.4 Investment Risk Capital Charge, Attachment 2 for further information on classification of rating grades.
2.6 Investments denominated in a currency other than the Australian currency
Disclose the aggregate balance of loans and advances that are denominated in a currency other than the Australian currency.
Total loans and advances which can be classified into the following:
Total loans and advances to:
3.1. Parent entity (for the consolidated insurance group, this is only applicable if the parent entity is not included in the consolidated insurance group)
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose the value of any loans and advances to the parent entity of the licensed insurer or of the consolidated insurance group (i.e. ultimate parent entity).
3.1.1. Controlled entities/Controlled entities of the parent entity
(Note: this is not applicable for the consolidated insurance group)
For branches, the line item “Controlled entities/Controlled entities of the parent entity” is to be interpreted as amounts in relation to “Controlled entities of the parent entity”, and for licensed insurance entities amounts are in relation to “Controlled entities” of the reporting insurer.
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose loans and advances issued to controlled entities of the licensed insurer.
3.2. Associates/Joint Ventures
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose loans and advances issued to Associates or Joint Ventures of the licensed insurer and the consolidated insurance group. Associates and Joint Ventures are defined in accordance with AASB 1006 and AASB 1016.
3.3. Other related parties
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose loans and advances issued to any other related entity of the licensed insurer or consolidated insurance group not specifically listed in the form.
3.4. Directors of the reporting Insurer & /or directors of related entities of the reporting Insurer
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose loans and advances issued to Directors of the reporting Insurer & /or directors of related entities of the reporting insurer. For this purpose related entity has the meaning as set out above.
Loans of this nature are levied a investment risk charge of 100% in accordance with Attachment 1 of GGN 110.4 Investment Risk Capital Charge.
3.4.1 Rebate of Investment Risk Charge calculated in section 2 for item 3.4.
This reporting line effectively calculates the rebate of the investment risk charge calculated on item 3.4 in section 2 of this form. This is required to ensure that the total Investment risk Capital Charge on item 3.4 does not exceed 100% in total.
In this line item enter the appropriate Investment Risk Capital Factor that has been levied on the value of loans to directors and or directors of related entities of the reporting insurer (i.e. the value of item 3.4) in section 2 of this form (i.e. items 2.1 to 2.4). Enter the Investment Capital Factor in the column headed “Investment Capital Factor”. The form will automatically calculate the appropriate Investment Risk Charge rebate in column headed “Investment Risk Charge”.
3.5. Insurance brokers
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose loans and advances issued to insurance brokers.
3.6. General Insurance companies
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose loans and advances issued to general insurance companies. This may include loans and advances to subsidiaries of the reporting insurer that are licensed general insurance entities.
3.7. Unsecured loans to employees that exceed $1000 individually
Of the total loans and advances of the reporting insurer that is reported as required by this form, disclose unsecured loans and advances issued to employees of the licensed insurance entity that are individually greater than $1,000.
For this purpose related entity has the meaning as set out in page 3 and 4 of this instruction guide.
Loans of this nature are levied a investment risk charge of 100% in accordance with Attachment 1 of GGN 110.4 Investment Risk Capital Charge.
3.7.1. Rebate of Investment Risk Charge calculated in section 2 for item 3.7
This reporting line effectively calculates the rebate of the investment risk charge calculated on item 3.7 in section 2 of this form. This is required to ensure that the total Investment risk Capital Charge on item 3.7 does not exceed 100% in total.
In this line item enter the appropriate Investment Risk Capital Factor that has been levied on the value of unsecured loans to employees that exceed $1,000 individually (i.e. the value of item 3.7) in section 2 of this form (i.e. items 2.1 to 2.4). Enter the Investment Capital Factor in the column headed “Investment Capital Factor”. The form will automatically calculate the appropriate Investment Risk Charge rebate in column headed “Investment Risk Charge”.