Reinsurance expenseReinsurance expense

Reinsurance expense

The recognition of Reinsurance Expense for the purposes of this form is required to be measured on a basis that is consistent with the measurement of premium revenue and Premium Liabilities as required by other prudential forms. Accordingly reinsurance expense is to be recognised fully when incurred/contracted and is not to be recognised in accordance with AASB 1023 (i.e. capitalised and amortised as an expense). The aggregate amount recognised in this form should agree to the aggregate amount disclosed in GRF 310.0 Statement of Financial Performance.

• APRA requirements

Due to the change in the recognition of premium income for prudential reporting purposes (refer above), it is appropriate to recognise reinsurance expense on a consistent basis i.e. recognised fully upfront in the Statement of Financial Performance. As a result, for APRA prudential reporting (and Investment risk charge calculation), there will be no asset titled “Deferred Reinsurance Expense”.

• AASB 1023 requirements

Under AASB 1023, expenses/premiums paid for reinsurance cover is required to be recognised as an expense on a basis that is consistent with the pattern of reinsurance. As a result under AASB 1023 this gives rise to the recognition of an asset – “Deferred Reinsurance Expense”, which is amortised (over a specified term/basis) to the Statement of Financial Performance as a reinsurance expense. Under AASB 1023 reinsurance expense is disclosed as an offset from premium revenue in the Statement of Financial Performance.

Total Premium Revenue and Reinsurance Expense that is associated with from the following related entities:

1. Parent entity

(Note: for the consolidated insurance group this is applicable if the ultimate parent entity is not included in the consolidated insurance group)

Of the total premium revenue and reinsurance expense that is reported as required by this form, disclose amounts that are with/from the parent entity of the licensed insurer or of the consolidated insurance group.

2. 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 premium revenue and reinsurance expense that is reported as required by this form, disclose amounts that are with/from these entities.