Reporting Standard GRS 410.0 (2005)
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Commonwealth legislation
This Act has been repealed and is no longer in force. It is retained for historical reference.
This determination requires general insurers (including foreign branches) to report movements in their outstanding claims provision to APRA, ordinarily each financial year, by lodging Form GRF 410.0 for licensed insurers and, where applicable, for consolidated insurance groups. APRA uses the data for prudential supervision.
Insurers must prepare and authorise the data (board and senior management responsibility), submit electronically or by paper within four months of the reporting period, and report the outstanding claims provision on an undiscounted basis.
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Direct links to the current provisions in Financial Sector (Collection of Data) determination No. 24 of 2005.
This 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 (foreign insurers) operating in Australia through branch operations, to report to APRA, generally on an annual basis, movement in the provision for claims liabilities.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer must provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Licensed Insurer’ for each reporting period.
An insurer that is a highest parent entity in relation to a consolidated insurance group must also provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Consolidated Insurance Group’ for each reporting period.
(a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or
(b) manually completed on paper, which must be faxed or mailed to APRA’s head office.
Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Note: APRA proposes to determine exemptions, under section 7 of the Insurance Act 1973 (Insurance Act), from the obligations under Part IV Division 4 of the Insurance Act in respect of the auditing of information provided under this reporting standard.
(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
(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 paragraph 6).
The information required by paragraphs 3 and 4 of this reporting standard must be provided to APRA 4 months after the end of the reporting period to which the information relates.
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 on the notice of extension.
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.
If an insurer submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the insurer to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the insurer who have authority from the insurer to transmit the data to APRA.
If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
(a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b) the instructions, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
Transitional
Interpretation
Accounting Standard AASB 1024 means the accounting standard so designated made by the Australian Accounting Standards Board, being the accounting standard that applied in respect of reporting periods (within the meaning of the accounting standard) commencing immediately before 1 January 2005;
approved auditor means an auditor who has been approved by APRA under section 40 of the Insurance Act;
consolidated insurance group means a group comprising:
(a) an insurer that is a highest parent entity; and
(b) each subsidiary under the control (within the meaning of Accounting Standard AASB 1024) of that insurer, whether the subsidiary is incorporated in Australia or not;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
highest parent entity means an insurer that satisfies all of the following conditions:
(a) it is incorporated in Australia;
(b) it has at least one subsidiary under its control (within the meaning of Accounting Standard AASB 1024); and
(c) it is not itself a subsidiary of an insurer that is incorporated in Australia;
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: 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.
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;
reporting period means a period mentioned in paragraph 6 or, if applicable, paragraph 7.
This 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 (foreign insurers) operating in Australia through branch operations, to report to APRA, generally on an annual basis, movement in the provision for claims liabilities.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer must provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Licensed Insurer’ for each reporting period.
An insurer that is a highest parent entity in relation to a consolidated insurance group must also provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Consolidated Insurance Group’ for each reporting period.
(a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or
(b) manually completed on paper, which must be faxed or mailed to APRA’s head office.
Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Note: APRA proposes to determine exemptions, under section 7 of the Insurance Act 1973 (Insurance Act), from the obligations under Part IV Division 4 of the Insurance Act in respect of the auditing of information provided under this reporting standard.
(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
(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 paragraph 6).
The information required by paragraphs 3 and 4 of this reporting standard must be provided to APRA 4 months after the end of the reporting period to which the information relates.
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 on the notice of extension.
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.
If an insurer submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the insurer to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the insurer who have authority from the insurer to transmit the data to APRA.
If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
(a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b) the instructions, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
Transitional
Interpretation
Accounting Standard AASB 1024 means the accounting standard so designated made by the Australian Accounting Standards Board, being the accounting standard that applied in respect of reporting periods (within the meaning of the accounting standard) commencing immediately before 1 January 2005;
approved auditor means an auditor who has been approved by APRA under section 40 of the Insurance Act;
consolidated insurance group means a group comprising:
(a) an insurer that is a highest parent entity; and
(b) each subsidiary under the control (within the meaning of Accounting Standard AASB 1024) of that insurer, whether the subsidiary is incorporated in Australia or not;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
highest parent entity means an insurer that satisfies all of the following conditions:
(a) it is incorporated in Australia;
(b) it has at least one subsidiary under its control (within the meaning of Accounting Standard AASB 1024); and
(c) it is not itself a subsidiary of an insurer that is incorporated in Australia;
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: 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.
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;
reporting period means a period mentioned in paragraph 6 or, if applicable, paragraph 7.
The purpose of this form is to provide information on the following:
For direct insurance business writers - for each of the following accident years:
For insurers writing reinsurance business – for each of the following underwriting years:
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:
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.
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
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’.
The general requirements of AASB 1012 for translation are:
Monetary items are defined to mean money held and assets and liabilities that are to be received or paid in fixed or determinable amounts of money (e.g. claims payments, reinsurance recoveries).
Monetary items arising under foreign currency derivative contracts at the reporting date must be translated as follows:
Reporting period
Insurers are required to report the information in the reporting form on an annual basis.
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
Classes of Insurance Business
The classes of business for companies that are not specialist reinsurers are as follows:
(I). Houseowners/Householders (H & H)
This class covers the common H & H policies inclusive of:
Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item 8.
(II). Commercial Motor Vehicle
Motor 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.
(III). Domestic Motor Vehicle
Motor 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.
(IV). Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
(V). Fire and Industrial Special Risks (ISR)
Includes all policies normally classified as 'Fire' and includes:
ISR
Standard 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.
(VI). Marine
Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance).
(VII). Aviation
Aviation (including aircraft hull and aircraft liability).
(VIII). Mortgage
Insurance 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.
(IX). Consumer Credit (CCI)
Insurance 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.
(X). Other Accident
Includes the following types of insurance:
(XI). Other
All other insurance business not specifically mentioned elsewhere. It includes, for example:
(XII). Compulsory Third Party Motor Vehicle (CTP)
This class consists only of CTP business.
(XIII). Public and Product Liability
(XIV). Professional Indemnity (PI)
Includes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses general included in this type of policy.
(XV). Employers' Liability (EL)
Includes:
The classes of business for companies that are specialist reinsurers are as follows:
(I). Facultative;
(II). Proportional; and
(III). Excess of loss.
(I). Facultative Reinsurance
The reinsurance of individual risks by offer and acceptance wherein the reinsurer has the “faculty” (option) to accept or reject each offer by the ceding company.
(II). Proportional Reinsurance
A proportional treaty is an agreement between an insurer and a reinsurer in which the reinsurer shares an identical proportion of the premiums and losses of the ceding company.
(III). Excess of Loss Reinsurance
Reinsurance which, subject to a specified limit, indemnifies the ceding company against the loss in excess of a specified retention. This type of reinsurance can involve:
Reinsurance 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 slit out all the classes of reinsurance businesses. However as required by GGN 110.3 Insurance Risk Capital Charge, where an insurer writes inwards reinsurance business and is unable to split this business into the classes and types listed in Table 2 of that Guidance Note, they are to use the highest casualty factors on their outstanding claims liabilities.
Where an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, APRA suggests that the contract should be allocated using one of the following methods:
(a) allocate the contract to the category which represents the greatest exposure; or
(b) allocate the contract to the category representing the greatest premium income.
An insurer that writes 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.
The Outstanding Claims Provision is to be disclosed by type of business (direct business and inward reinsurance business), net of reinsurance and non reinsurance recoveries, as at the reporting date.
The Outstanding Claims Provision relates to the liability provision that has been recognised by the insurer in GRF 300.0 Statement of Financial Position, however for the purposes of this form, the Outstanding Claims Provision must be undiscounted.
For the purposes of this form the total of the OCP for the current financial year (on an undiscounted basis) is to be allocated across the respective time buckets specified on the form. Accordingly, each year that this form is completed the OCP that is recorded for the respective time buckets will likely change as this is reassessed.
For the “Direct business” and “Reinsurance” business, amounts are to include all Outstanding Claims Provisions associated with:
Accident Year
Direct writers of insurance business are to complete this form based on accident year. This refers to the year that the losses/claims associated with individual policies are incurred.
Underwriting Year
Writers of reinsurance business can complete this form based on underwriting year. Underwriting year refers to the year that the individual policy attaches and the subsequent risk associated with this policy accepted by the insurer, regardless of when the premiums and losses are actually reported, booked or paid. For example the 2001 underwriting year includes results in calendar year 2001 and all future calendar years on business bound in 2001.
Reserve Release
Reserve release refers the occasions when a provision was created/posted for a particular prior financial year and subsequently it is found that this provision will be more than is required to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer releases these excess provisions and they become profits in the current financial year of the insurer.
Claim payments (that are debited out of the outstanding claims provision for accounting purposes) are not to be classified as a reserve release for the purposes of this form.
Reserve Strengthening
Reserve strengthening refers the occasions when a provision has been created/posted for a particular prior financial year and subsequently it is found that this provision will be insufficient to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer strengthens or increases these provisions in the current financial year by adding additional provisions to accommodate the losses associated with this particular prior accident year and this becomes a reduction in profit (i.e. claims expense in profit and loss in the current financial year).
The purpose of this form is to provide information on the following:
For direct insurance business writers - for each of the following accident years:
For insurers writing reinsurance business – for each of the following underwriting years:
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:
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.
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
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’.
The general requirements of AASB 1012 for translation are:
Monetary items are defined to mean money held and assets and liabilities that are to be received or paid in fixed or determinable amounts of money (e.g. claims payments, reinsurance recoveries).
Monetary items arising under foreign currency derivative contracts at the reporting date must be translated as follows:
Reporting period
Insurers are required to report the information in the reporting form on an annual basis.
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
Classes of Insurance Business
The classes of business for companies that are not specialist reinsurers are as follows:
(I). Houseowners/Householders (H & H)
This class covers the common H & H policies inclusive of:
Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item 8.
(II). Commercial Motor Vehicle
Motor 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.
(III). Domestic Motor Vehicle
Motor 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.
(IV). Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
(V). Fire and Industrial Special Risks (ISR)
Includes all policies normally classified as 'Fire' and includes:
ISR
Standard 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.
(VI). Marine
Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance).
(VII). Aviation
Aviation (including aircraft hull and aircraft liability).
(VIII). Mortgage
Insurance 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.
(IX). Consumer Credit (CCI)
Insurance 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.
(X). Other Accident
Includes the following types of insurance:
(XI). Other
All other insurance business not specifically mentioned elsewhere. It includes, for example:
(XII). Compulsory Third Party Motor Vehicle (CTP)
This class consists only of CTP business.
(XIII). Public and Product Liability
(XIV). Professional Indemnity (PI)
Includes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses general included in this type of policy.
(XV). Employers' Liability (EL)
Includes:
The classes of business for companies that are specialist reinsurers are as follows:
(I). Facultative;
(II). Proportional; and
(III). Excess of loss.
(I). Facultative Reinsurance
The reinsurance of individual risks by offer and acceptance wherein the reinsurer has the “faculty” (option) to accept or reject each offer by the ceding company.
(II). Proportional Reinsurance
A proportional treaty is an agreement between an insurer and a reinsurer in which the reinsurer shares an identical proportion of the premiums and losses of the ceding company.
(III). Excess of Loss Reinsurance
Reinsurance which, subject to a specified limit, indemnifies the ceding company against the loss in excess of a specified retention. This type of reinsurance can involve:
Reinsurance 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 slit out all the classes of reinsurance businesses. However as required by GGN 110.3 Insurance Risk Capital Charge, where an insurer writes inwards reinsurance business and is unable to split this business into the classes and types listed in Table 2 of that Guidance Note, they are to use the highest casualty factors on their outstanding claims liabilities.
Where an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, APRA suggests that the contract should be allocated using one of the following methods:
(a) allocate the contract to the category which represents the greatest exposure; or
(b) allocate the contract to the category representing the greatest premium income.
An insurer that writes 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.
The Outstanding Claims Provision is to be disclosed by type of business (direct business and inward reinsurance business), net of reinsurance and non reinsurance recoveries, as at the reporting date.
The Outstanding Claims Provision relates to the liability provision that has been recognised by the insurer in GRF 300.0 Statement of Financial Position, however for the purposes of this form, the Outstanding Claims Provision must be undiscounted.
For the purposes of this form the total of the OCP for the current financial year (on an undiscounted basis) is to be allocated across the respective time buckets specified on the form. Accordingly, each year that this form is completed the OCP that is recorded for the respective time buckets will likely change as this is reassessed.
For the “Direct business” and “Reinsurance” business, amounts are to include all Outstanding Claims Provisions associated with:
Accident Year
Direct writers of insurance business are to complete this form based on accident year. This refers to the year that the losses/claims associated with individual policies are incurred.
Underwriting Year
Writers of reinsurance business can complete this form based on underwriting year. Underwriting year refers to the year that the individual policy attaches and the subsequent risk associated with this policy accepted by the insurer, regardless of when the premiums and losses are actually reported, booked or paid. For example the 2001 underwriting year includes results in calendar year 2001 and all future calendar years on business bound in 2001.
Reserve Release
Reserve release refers the occasions when a provision was created/posted for a particular prior financial year and subsequently it is found that this provision will be more than is required to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer releases these excess provisions and they become profits in the current financial year of the insurer.
Claim payments (that are debited out of the outstanding claims provision for accounting purposes) are not to be classified as a reserve release for the purposes of this form.
Reserve Strengthening
Reserve strengthening refers the occasions when a provision has been created/posted for a particular prior financial year and subsequently it is found that this provision will be insufficient to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer strengthens or increases these provisions in the current financial year by adding additional provisions to accommodate the losses associated with this particular prior accident year and this becomes a reduction in profit (i.e. claims expense in profit and loss in the current financial year).
The purpose of this form is to provide information on the following:
For direct insurance business writers - for each of the following accident years:
For insurers writing reinsurance business – for each of the following underwriting years:
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:
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.
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
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’.
The general requirements of AASB 1012 for translation are:
Monetary items are defined to mean money held and assets and liabilities that are to be received or paid in fixed or determinable amounts of money (e.g. claims payments, reinsurance recoveries).
Monetary items arising under foreign currency derivative contracts at the reporting date must be translated as follows:
Reporting period
Insurers are required to report the information in the reporting form on an annual basis.
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
Classes of Insurance Business
The classes of business for companies that are not specialist reinsurers are as follows:
(I). Houseowners/Householders (H & H)
This class covers the common H & H policies inclusive of:
Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item 8.
(II). Commercial Motor Vehicle
Motor 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.
(III). Domestic Motor Vehicle
Motor 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.
(IV). Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.
(V). Fire and Industrial Special Risks (ISR)
Includes all policies normally classified as 'Fire' and includes:
ISR
Standard 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.
(VI). Marine
Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance).
(VII). Aviation
Aviation (including aircraft hull and aircraft liability).
(VIII). Mortgage
Insurance 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.
(IX). Consumer Credit (CCI)
Insurance 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.
(X). Other Accident
Includes the following types of insurance:
(XI). Other
All other insurance business not specifically mentioned elsewhere. It includes, for example:
(XII). Compulsory Third Party Motor Vehicle (CTP)
This class consists only of CTP business.
(XIII). Public and Product Liability
(XIV). Professional Indemnity (PI)
Includes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses general included in this type of policy.
(XV). Employers' Liability (EL)
Includes:
The classes of business for companies that are specialist reinsurers are as follows:
(I). Facultative;
(II). Proportional; and
(III). Excess of loss.
(I). Facultative Reinsurance
The reinsurance of individual risks by offer and acceptance wherein the reinsurer has the “faculty” (option) to accept or reject each offer by the ceding company.
(II). Proportional Reinsurance
A proportional treaty is an agreement between an insurer and a reinsurer in which the reinsurer shares an identical proportion of the premiums and losses of the ceding company.
(III). Excess of Loss Reinsurance
Reinsurance which, subject to a specified limit, indemnifies the ceding company against the loss in excess of a specified retention. This type of reinsurance can involve:
Reinsurance 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 slit out all the classes of reinsurance businesses. However as required by GGN 110.3 Insurance Risk Capital Charge, where an insurer writes inwards reinsurance business and is unable to split this business into the classes and types listed in Table 2 of that Guidance Note, they are to use the highest casualty factors on their outstanding claims liabilities.
Where an insurer writes inwards reinsurance which spans multiple classes and the insurer cannot readily split the contract between classes, APRA suggests that the contract should be allocated using one of the following methods:
(a) allocate the contract to the category which represents the greatest exposure; or
(b) allocate the contract to the category representing the greatest premium income.
An insurer that writes 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.
The Outstanding Claims Provision is to be disclosed by type of business (direct business and inward reinsurance business), net of reinsurance and non reinsurance recoveries, as at the reporting date.
The Outstanding Claims Provision relates to the liability provision that has been recognised by the insurer in GRF 300.0 Statement of Financial Position, however for the purposes of this form, the Outstanding Claims Provision must be undiscounted.
For the purposes of this form the total of the OCP for the current financial year (on an undiscounted basis) is to be allocated across the respective time buckets specified on the form. Accordingly, each year that this form is completed the OCP that is recorded for the respective time buckets will likely change as this is reassessed.
For the “Direct business” and “Reinsurance” business, amounts are to include all Outstanding Claims Provisions associated with:
Accident Year
Direct writers of insurance business are to complete this form based on accident year. This refers to the year that the losses/claims associated with individual policies are incurred.
Underwriting Year
Writers of reinsurance business can complete this form based on underwriting year. Underwriting year refers to the year that the individual policy attaches and the subsequent risk associated with this policy accepted by the insurer, regardless of when the premiums and losses are actually reported, booked or paid. For example the 2001 underwriting year includes results in calendar year 2001 and all future calendar years on business bound in 2001.
Reserve Release
Reserve release refers the occasions when a provision was created/posted for a particular prior financial year and subsequently it is found that this provision will be more than is required to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer releases these excess provisions and they become profits in the current financial year of the insurer.
Claim payments (that are debited out of the outstanding claims provision for accounting purposes) are not to be classified as a reserve release for the purposes of this form.
Reserve Strengthening
Reserve strengthening refers the occasions when a provision has been created/posted for a particular prior financial year and subsequently it is found that this provision will be insufficient to pay for the losses associated with this particular accident year for direct writers of insurance and underwriting year for reinsurance writers. In these instances the insurer strengthens or increases these provisions in the current financial year by adding additional provisions to accommodate the losses associated with this particular prior accident year and this becomes a reduction in profit (i.e. claims expense in profit and loss in the current financial year).
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This 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 (foreign insurers) operating in Australia through branch operations, to report to APRA, generally on an annual basis, movement in the provision for claims liabilities.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer must provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Licensed Insurer’ for each reporting period.
An insurer that is a highest parent entity in relation to a consolidated insurance group must also provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Consolidated Insurance Group’ for each reporting period.
(a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or
(b) manually completed on paper, which must be faxed or mailed to APRA’s head office.
Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Note: APRA proposes to determine exemptions, under section 7 of the Insurance Act 1973 (Insurance Act), from the obligations under Part IV Division 4 of the Insurance Act in respect of the auditing of information provided under this reporting standard.
(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
(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 paragraph 6).
The information required by paragraphs 3 and 4 of this reporting standard must be provided to APRA 4 months after the end of the reporting period to which the information relates.
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 on the notice of extension.
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.
If an insurer submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the insurer to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the insurer who have authority from the insurer to transmit the data to APRA.
If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
(a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b) the instructions, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
Transitional
Interpretation
Accounting Standard AASB 1024 means the accounting standard so designated made by the Australian Accounting Standards Board, being the accounting standard that applied in respect of reporting periods (within the meaning of the accounting standard) commencing immediately before 1 January 2005;
approved auditor means an auditor who has been approved by APRA under section 40 of the Insurance Act;
consolidated insurance group means a group comprising:
(a) an insurer that is a highest parent entity; and
(b) each subsidiary under the control (within the meaning of Accounting Standard AASB 1024) of that insurer, whether the subsidiary is incorporated in Australia or not;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
highest parent entity means an insurer that satisfies all of the following conditions:
(a) it is incorporated in Australia;
(b) it has at least one subsidiary under its control (within the meaning of Accounting Standard AASB 1024); and
(c) it is not itself a subsidiary of an insurer that is incorporated in Australia;
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: 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.
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;
reporting period means a period mentioned in paragraph 6 or, if applicable, paragraph 7.
This 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 (foreign insurers) operating in Australia through branch operations, to report to APRA, generally on an annual basis, movement in the provision for claims liabilities.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer must provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Licensed Insurer’ for each reporting period.
An insurer that is a highest parent entity in relation to a consolidated insurance group must also provide APRA with the information required by the version of Form GRF 410.0 designated for a ‘Consolidated Insurance Group’ for each reporting period.
(a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or
(b) manually completed on paper, which must be faxed or mailed to APRA’s head office.
Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Note: APRA proposes to determine exemptions, under section 7 of the Insurance Act 1973 (Insurance Act), from the obligations under Part IV Division 4 of the Insurance Act in respect of the auditing of information provided under this reporting standard.
(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
(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 paragraph 6).
The information required by paragraphs 3 and 4 of this reporting standard must be provided to APRA 4 months after the end of the reporting period to which the information relates.
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 on the notice of extension.
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.
If an insurer submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the insurer to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the insurer who have authority from the insurer to transmit the data to APRA.
If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
(a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b) the instructions, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
Transitional
Interpretation
Accounting Standard AASB 1024 means the accounting standard so designated made by the Australian Accounting Standards Board, being the accounting standard that applied in respect of reporting periods (within the meaning of the accounting standard) commencing immediately before 1 January 2005;
approved auditor means an auditor who has been approved by APRA under section 40 of the Insurance Act;
consolidated insurance group means a group comprising:
(a) an insurer that is a highest parent entity; and
(b) each subsidiary under the control (within the meaning of Accounting Standard AASB 1024) of that insurer, whether the subsidiary is incorporated in Australia or not;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
highest parent entity means an insurer that satisfies all of the following conditions:
(a) it is incorporated in Australia;
(b) it has at least one subsidiary under its control (within the meaning of Accounting Standard AASB 1024); and
(c) it is not itself a subsidiary of an insurer that is incorporated in Australia;
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: 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.
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;
reporting period means a period mentioned in paragraph 6 or, if applicable, paragraph 7.
The purpose of this form is to provide information on the following:
This is an opening excerpt, not the complete document.