Premium Revenue - Each State and TerritoPremium Revenue - Each State and Territory

Premium Revenue - Each State and Territory

Report premium revenue Inside Australia according to where the risk is located.

This is the premium revenue as required by the APRA forms (refer to instructions GRF 310.1 Premium Revenue and Reinsurance Expense). Premium revenue is not to be reported in accordance with AASB 1023 ‘General Insurance Contracts’ (i.e. earned and unearned components).

Premium revenue must be reported separately for:

• Direct business; and Inwards reinsurance business.

Premium revenue must be recognised on a basis that is consistent with the measurement of premiums liabilities as measured in accordance with GPS 310 Audit and Actuarial Reporting and Valuation.

Premium revenue must be recognised in line with the following:

• Premium recognition for direct business: Premium revenue must be recognised fully upfront on the date the policy is accepted (bound) by insurers writing direct business.
• Premium recognition for inwards reinsurance business: Premium revenue for inwards reinsurance business is to be recognised from the date of acceptance of the reinsurance risk by the reinsurer. Reinsurers are required to recognise the premium based on the Gross Net 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 determinant.
• 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 insurance liabilities in accordance with GPS 310 Audit and Actuarial Reporting and Valuation.
• Premium revenue excludes amounts collected on behalf of third parties i.e. government stamp duty and taxes.
• Levies charged to insured, such as fire service levies, are to be included as premium revenue.
• Premium refunds and rebates are to be deducted from premium revenue.
• For instalment premium policies, the amount of the annualised premium is to be used. 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.
• Where premium is accepted on a deposit basis, the full annual premium is to be brought into account.
• Premium revenue must be gross of reinsurance expense.
• Premium revenue includes premium receivable on 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.