This form provides selected information of business written by authorised general insurers outside Australia; namely:
premium revenue;
reinsurance and claims expense;
claims expense;
reinsurance recoveries;
investment income;
premium liabilities;
outstanding claims provision;
borrowings/funding;
expected reinsurance recoveries; and
investments.
This form only needs to be completed where the insurer has business operations outside of Australia (i.e. where they have items of income, expense or assets, liabilities or capital outside of Australia as defined in this instructions set).
Audit requirements
The information provided under the form is not required to be audited and has been exempted from the definition of ‘yearly statutory accounts’.
Reporting entities
Forms are to be completed for the following reporting entities where appropriate:
Branch operations of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations);
Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity);
Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity); and
Consolidated insurance groups.
Note: the form for the consolidated insurance group is only required to complete the information requirements on the form. No risk change is applied to the consolidated insurance group at this stage.
For the purposes of APRA prudential reporting, the consolidated insurance group is interpreted as the accounts incorporating the highest parent entity in a group structure, that is an Australian authorised general insurance entity (for the purposes of the Insurance Act 1973), and includes all subsidiaries, associates and joint ventures (registered both in Australia and overseas) of that parent entity.
For the purposes of this form, the highest parent entity in the corporate group does not include a company (e.g. non-operating holding company) that is not an authorised general insurance entity.
Section 3. Claims Expense - Direct & Inward trea - Financial Sector (Collection of Data) determination No. 23 of 2005 - 3. Claims Expense - Direct & Inward treaty | Zoe
Definition of subsidiaries should be consistent with the requirements of Australian accounting standards AASB 1024 ‘Consolidated Accounts’ and definition of associates should be consistent with AASB 1016 ‘Accounting for Investments in Associates’.
Exemptions from the Consolidated Insurance Group requirements
Australian authorised insurers which do not have any subsidiaries are not required to complete the forms for this reporting unit.
Australian authorised insurers which have subsidiaries, but the financial position of the consolidated insurance group is not materially different from that of the licensed insurance entity, are not required to complete the forms for this reporting unit (i.e. the subsidiaries do not have any material dealings/balances).
Basis of preparation
In completing this form, unless otherwise specifically stated, insurers are recommended to adopt the measurement and recognition requirements as required by the prudential reporting framework, as appropriate (i.e. outstanding claims provision and premium liabilities).
Unit of measurement
This form is to be presented in Australian currency, rounded to thousands of dollars, with no decimal place.
As a general rule, amounts denominated in foreign currency are to be converted to AUD in accordance with the requirements of the Australian accounting standards, notably AASB 1012 ‘Foreign Currency Translation’.
Reporting period
Insurers are required to report the information in the reporting form on an annual basis.
The annual information is to be completed in respect of the financial year of the insurer.
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. See the Reporting Requirements table for details.
Reporting lag
This 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 Requirements table.
Specific instructions
The appropriate information is to be reported by country or geographic region specified on the form, based on the location of where the items of income/expense are earned/incurred and assets and liabilities are invested or located. Enter the relevant details for each country as appropriate.
Items are to be interpreted (measured and recognised) consistently as with other forms.
1. Premium Revenue - Direct & Inward treaty
This is the premium revenue (written) over the reporting period. It is to be reported in respect of total direct business and inward reinsurance business.
2. Reinsurance expense - Direct & Inward treaty
Premium ceded to reinsurers is recognised fully as an expense when contracted (i.e. it is not to be amortised in accordance with the pattern of reinsurance service received). A spilt between direct and inward treaty business is required.
3. Claims Expense - Direct & Inward treaty
3.1 Relating to outstanding claims provision:
Represents claims expense in relation to claims incurred/reported relating to current year and prior years (i.e. the outstanding claims provision) as recognised in GRF 430.0 Claims Expense by State and Territory of Australia, disclosed into the applicable country.
3.2 Relating to Premium Liabilities:
Represents claims expense in relation to movements in the premium liabilities (relating to future years, disclosed into the applicable country).
4. Reinsurance recoveries:
4.1 Relating to outstanding claims provision:
Report the reinsurance recoveries that relate to claims incurred and paid (i.e. relating to claims recognised in relation to current and prior years).
4.2 Relating to premium liabilities recognised:
Report movement in the value of expected reinsurance recoveries that are recognised in relation to the recognition of premium liabilities (i.e. relating to potential claims arising in future years and whether these are covered by reinsurance agreements).
5. Investment Income - Interest/dividend/rent
Include investment income as recognised in the statement of financial performance for the reporting period, disclosed into the applicable country in which the investment income was earned.
6. Expected Reinsurance Recoveries
“Expected reinsurance recoveries” is the term used to describe the value of potential future liabilities recognised as “Premium Liabilities” (in accordance with GPS 210 Liability Valuation for General Insurers) that are expected to be recovered under reinsurance contracts.
Report the value of Expected Reinsurance Recoveries that is attributable to the respective countries listed.
7. Other reinsurance recoveries
Report the value of all other reinsurance recoveries (other than Expected Reinsurance Recoveries), in the appropriate columns for the respective countries.
8. Investments
Report the value of the investments portfolio that is attributable to the respective countries listed.
9. Other assets
Report the value of other assets (other than those listed above) attributable to the respective countries listed in the form. The value of “Other Assets” must represent the remaining total assets of the reporting insurer.
10. Total Assets
Represent the total assets of the reporting insurer and must reconcile to the total assets as reported in GRF 300.0 Statement of Financial Position.
11. Premium Liability
The amount reported is to be measured in accordance with GPS 210 Liability Valuation for General Insurers.
12. Outstanding Claims Provision
This is the insurer’s liability for outstanding claims and recognises the potential cost to the insurer of settling claims which it has incurred at the reporting date but which have not been finalised. The amount reported is without deducting reinsurance and other recoveries and is to be measured in accordance with GPS 210 Liability Valuation for General Insurers.
The liability is in respect of both direct business and inward reinsurance business and is to be measured at the present value of the expected future payments. It must take into account unpaid claims, unreported claims, claims incurred but not reported, adjustments for claims development and claims incurred but not enough reported and the direct and indirect claims settlement costs that the insurer expects to incur in settling its outstanding claims.
13. Borrowings/loan capital
Report the carrying value of any borrowings raised in the appropriate column for the respective countries.
14. Other liabilities
Report the value of other liabilities (other than those listed above) attributable to the respective countries listed in the form. The value of “Other Liabilities” must represent the remaining total liabilities of the reporting insurer.
15. Total Liabilities
Represent the total assets of the reporting insurer and must reconcile to the total assets as reported in GRF 300.0 Statement of Financial Position.