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Reporting Standard LRS 400.0

Statement of Policy Liabilities

Objective of this reporting standard

This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all registered life insurance companies to report to APRA, in general, on an annual basis in relation to a statement of policy liabilities.

This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with Form LRF 400.0 Statement of Policy Liabilities, and the associated instructions (both of which are attached and form part of this reporting standard).

Purpose

1. Information collected in Form LRF 400.0 Statement of Policy Liabilities (LRF 400.0) is used by APRA for the purpose of prudential supervision, including assessing compliance with prudential standards where appropriate. It may also be used by the Reserve Bank of Australia, the Australian Bureau of Statistics and the Australian Securities and Investments Commission.

Application and commencement

2. This reporting standard applies to all life insurance companies including friendly societies (together referred to as life companies) registered under the Life Insurance Act 1995 (Life Insurance Act) for reporting periods commencing on or after 1 October 2009.

Information required

3. A life company must provide APRA with the information required by Form LRF 400.0 for each reporting period.

Note: The instructions for Form LRF 400.0 explain in more detail the information that is required.

4. Only Item 2 of the information required to be provided to APRA under this reporting standard is intended to form part of the annual returns, within the meaning of section 124 of the Life Insurance Act, given by the life company to APRA.

Method of submission

5. The information required by this reporting standard must be given to APRA either:

(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or

(b) by completing Form LRF 400.0 on paper and mailing the completed form to APRA

Note: The ‘Direct to APRA’ application software and paper forms may be obtained from APRA.

Reporting periods and due dates

6. Subject to paragraph 7, a life company must provide the information required by this reporting standard in audited form in respect of the financial year of the life company.

Note: The annual audited form must be submitted in conjunction with the annual auditor’s report, as required under Prudential Standard LPS 310 Audit and Actuarial Requirements.

7. APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular life company, to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to:

(a) the particular circumstances of the life company;

(b) the extent to which the information is required for the purposes of the prudential supervision of the life company; and

(c) the requirements of the Reserve Bank of Australia or the Australian Bureau of Statistics or the Australian Securities and Investments Commission.

8. The information required by this reporting standard must be provided to APRA within four months after the end of the reporting period to which the information relates.

9. APRA may grant a life company 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.

Quality control

10. The information provided by a life company under this reporting standard must be the product of processes and controls that have been reviewed and tested by the auditor of the life company.

11. All information provided by a life company under this reporting standard must be subject to processes and controls developed by the life company for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the life company to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.

12. Actuarial valuations and calculations included in, or used in the preparation of, the information provided to APRA must be in accordance with the prudential standards in force for the reporting period.

Authorisation

13. If the officer of a life company provides the information required by this reporting standard:

(a) using Direct to APRA (D2A), the officer must digitally authorise, submit the data to APRA and receive a D2A receipt number for the information to be considered given to APRA. APRA will issue ‘digital certificates’ to officers of the life company who have authority to transmit the data to APRA; or

(b) on paper, the relevant completed form must be signed on the front page by the principal executive officer or chief financial officer of the life company.

Note: Information in draft returns saved at APRA using D2A will not be considered to be provided to APRA for the purposes of the life company's obligations under this reporting standard.

Transitional

14. A life company must report in relation to a reporting period ending prior to 1 October 2009 in accordance with the reporting standard that this reporting standard replaces rather than under this reporting standard.

Interpretation

15. In this reporting standard:

business days means ordinary business days, exclusive of Saturdays, Sundays or public holidays;

principal executive officer means the principal executive officer of the life company for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity;

reporting period means a reporting period under paragraph 6 or, if applicable, paragraph 7.

16. A reference to a prudential standard means the prudential standard made under section 230A of the Life Insurance Act mentioned in the reference, as amended from time to time. If the prudential standard has been revoked and replaced, the reference shall be taken to be to the prudential standard that has replaced it.

Statement of Policy Liabilities

Objective of this reporting standard

This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all registered life insurance companies to report to APRA, in general, on an annual basis in relation to a statement of policy liabilities.

This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with Form LRF 400.0 Statement of Policy Liabilities, and the associated instructions (both of which are attached and form part of this reporting standard).

Purpose

1. Information collected in Form LRF 400.0 Statement of Policy Liabilities (LRF 400.0) is used by APRA for the purpose of prudential supervision, including assessing compliance with prudential standards where appropriate. It may also be used by the Reserve Bank of Australia, the Australian Bureau of Statistics and the Australian Securities and Investments Commission.

Application and commencement

2. This reporting standard applies to all life insurance companies including friendly societies (together referred to as life companies) registered under the Life Insurance Act 1995 (Life Insurance Act) for reporting periods commencing on or after 1 October 2009.

Information required

3. A life company must provide APRA with the information required by Form LRF 400.0 for each reporting period.

Note: The instructions for Form LRF 400.0 explain in more detail the information that is required.

4. Only Item 2 of the information required to be provided to APRA under this reporting standard is intended to form part of the annual returns, within the meaning of section 124 of the Life Insurance Act, given by the life company to APRA.

Method of submission

5. The information required by this reporting standard must be given to APRA either:

(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or

(b) by completing Form LRF 400.0 on paper and mailing the completed form to APRA

Note: The ‘Direct to APRA’ application software and paper forms may be obtained from APRA.

Reporting periods and due dates

6. Subject to paragraph 7, a life company must provide the information required by this reporting standard in audited form in respect of the financial year of the life company.

Note: The annual audited form must be submitted in conjunction with the annual auditor’s report, as required under Prudential Standard LPS 310 Audit and Actuarial Requirements.

7. APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular life company, to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to:

(a) the particular circumstances of the life company;

(b) the extent to which the information is required for the purposes of the prudential supervision of the life company; and

(c) the requirements of the Reserve Bank of Australia or the Australian Bureau of Statistics or the Australian Securities and Investments Commission.

8. The information required by this reporting standard must be provided to APRA within four months after the end of the reporting period to which the information relates.

9. APRA may grant a life company 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.

Quality control

10. The information provided by a life company under this reporting standard must be the product of processes and controls that have been reviewed and tested by the auditor of the life company.

11. All information provided by a life company under this reporting standard must be subject to processes and controls developed by the life company for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the life company to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.

12. Actuarial valuations and calculations included in, or used in the preparation of, the information provided to APRA must be in accordance with the prudential standards in force for the reporting period.

Authorisation

13. If the officer of a life company provides the information required by this reporting standard:

(a) using Direct to APRA (D2A), the officer must digitally authorise, submit the data to APRA and receive a D2A receipt number for the information to be considered given to APRA. APRA will issue ‘digital certificates’ to officers of the life company who have authority to transmit the data to APRA; or

(b) on paper, the relevant completed form must be signed on the front page by the principal executive officer or chief financial officer of the life company.

Note: Information in draft returns saved at APRA using D2A will not be considered to be provided to APRA for the purposes of the life company's obligations under this reporting standard.

Transitional

14. A life company must report in relation to a reporting period ending prior to 1 October 2009 in accordance with the reporting standard that this reporting standard replaces rather than under this reporting standard.

Interpretation

15. In this reporting standard:

business days means ordinary business days, exclusive of Saturdays, Sundays or public holidays;

principal executive officer means the principal executive officer of the life company for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity;

reporting period means a reporting period under paragraph 6 or, if applicable, paragraph 7.

16. A reference to a prudential standard means the prudential standard made under section 230A of the Life Insurance Act mentioned in the reference, as amended from time to time. If the prudential standard has been revoked and replaced, the reference shall be taken to be to the prudential standard that has replaced it.

Objective of this reporting standard

This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all registered life insurance companies to report to APRA, in general, on an annual basis in relation to a statement of policy liabilities.

This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with Form LRF 400.0 Statement of Policy Liabilities, and the associated instructions (both of which are attached and form part of this reporting standard).

Reporting levels

LRF 400.0 must be completed by all life insurance companies, including friendly societies.

The form is to be completed for each statutory fund (approved benefit fund).

LRF 400.0 contains two sections:

1. All Statutory Fund Products; and
2. Totals by Class of Business and Basis.

Within section 1, reporting items are to be completed for each APRA Product Group (as defined below).

Within each APRA Product Group, some data will be collected on up to three bases, indicated as follows:

• ‘This Year’ – current position, based on current year’s valuation basis;
• ‘Last Year’ – current position, based on previous year’s valuation basis; and
• ‘LY/TY’ – current position, based on previous year’s valuation basis, except substituting current year’s investment and economic assumptions.

Unit of measurement

LRF 400.0 is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates.

Definitions

Definitions for data reporting items required by this form have been provided where appropriate in the instructions under the section headed ‘Instructions for specific items’ below.

Definitions, unless specified, apply to all life insurance companies, including friendly societies as if each reference to a statutory fund, or shareholders’ fund, were a reference to an approved benefit fund, or management fund, respectively. Likewise, reference to shareholders should be taken to embrace ‘members’ of a mutual association and/or a society. The term ‘life companies’ or ‘life insurance companies’ includes friendly societies unless stated otherwise. This is in line with the usage of terms in the Life Insurance Act 1995.

Reporting period

All life insurance companies, including friendly societies, are required to report the information in the reporting form on an annual basis only.

The annual information is to be completed in respect of the financial year of the life insurance company, not the calendar year.

The financial information requested in this form is to be reported as at the close of business for the last day of the reporting period.

Basis of preparation

In completing this form, unless specifically stated otherwise, institutions are to follow the basis that is used for the preparation of the annual financial statements in accordance with the Australian accounting standards.

Actuarial valuations and calculations included in, or used in the preparation of, the form must be in accordance with APRA and other prudential standards.

If additional clarification is required for specific items in this form, reference should be made to the section ‘Instructions for specific items’ below, which is provided as a guide.

For the purposes of reporting under this form, contracts are to be classified in accordance with Prudential Standard LPS 350 Contract Classification for the Purpose of Regulatory Reporting to APRA.

APRA Product Groups

For consistency of reporting across the range of forms applicable to life insurers, APRA adopts a single set of product groupings for life insurers. The following tables list the APRA Product Groups applicable to (1) life companies other than friendly societies, and (2) friendly societies.

<table cellspacing="0" cellpadding="0" style="width:396.75pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Ref.</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Product Group</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Notes</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Category</span></p></td></tr><tr style="height:15pt"><td colspan="4" style="width:385.2pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Life companies other than friendly societies</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L1</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Conventional </span><span>Participating </span><span>(Par)</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Includes</span><span> Whole of Life policies and Endowment policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:57pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L2</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Participating </span><span>Investment Account</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>. Exclude non-participating investment account policies (refer L8, below).</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L3</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> with</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L4</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on </span><span>an individual</span><span> </span><span>(</span><span>retail</span><span>)</span><span> </span><span>basis</span><span>.</span><span> </span><span>Include</span><span>s</span><span> </span><span>n</span><span>on-par</span><span>ticipating</span><span> conventional policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L5</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Disab</span><span>ility</span><span> Income Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued to individuals</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:26.35pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L6</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on a </span><span>group (</span><span>wholesale</span><span>)</span><span> </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L7</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Disab</span><span>ility</span><span> </span><span>I</span><span>ncome Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued on a group </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L8</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par Investment Policy</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include non-participating investment account and investment linked policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L9</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> without</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are NOT dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L10</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Other</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include all other products not specifically categorised above</span><span> – obtain APRA’s agreement to use.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>(Either can be </span><span>repor</span><span>ted)</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L11</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Policy Owners’ Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Retained profits </span><span>allocated to participating policy owners generally, but not yet vested as specific amounts to particular policies</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L12</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ Capital &amp; Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ capital plus retained profits </span><span>allocated to </span><span>sharehold</span><span>ers</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Capital</span></p></td></tr></tbody></table>

Note that Product Groups L11 and L12 are not applicable to this form.

Rather than requiring a Related Product Group (as defined in APRA and other prudential standards) of a Life Insurer’s business to be allocated across APRA Product Groups, APRA will permit it to be contained wholly within one APRA Product Group.

A separate set of product groupings is adopted for Friendly Societies, as follows:

<table cellspacing="0" cellpadding="0" style="width:424.5pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p><span>Ref.</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Product Group</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Notes</span></p></td></tr><tr style="height:15pt"><td colspan="3" style="width:412.95pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Friendly societies</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F1</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Education</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span style="font-family:Arial, sans-serif"></span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F2</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Account</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p></td></tr><tr style="height:33.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F3</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>y</span><span> </span><span>&amp;</span><span> Superannuation</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span></span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F4</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Risk</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>All products classified as Defined Benefit.</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F5</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Prepaid Funeral</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Funeral products that are </span><span>classified as Defined Contribution.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F6</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Linked</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p><p><span style="width:223.85pt; display:inline-block"></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F7</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Unallocated Benefit Fund Reserve</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Value of benefit funds which has not been allocated to either the benefit fund members or to the management fund.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F8</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ Capital and Retained Profits</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ capital plus retained profits allocated to members.</span></p></td></tr></tbody></table>

The classification of participating and non-participating business does not apply to friendly societies. Note that Product Groups F7 and F8 are not applicable to this form.

Instructions for specific items

While these instructions apply to all life insurance companies, including friendly societies, not all items may be applicable to both: some items may not be applicable to friendly societies while others may not be applicable to life insurers.

Section 1 All Statutory Fund Products

This section is to be completed for each class of business, as specified in the drop-down box list:

• Australia – Superannuation
• Australia – Ordinary
• Overseas – All business

The expressions ‘ordinary business’ and ‘superannuation business’ are defined in the dictionary of the Life Insurance Act 1995.

Reporting Form LRF 400.0

Statement of Policy Liabilities

Instruction Guide

Introduction

Form LRF 400.0 Statement of Policy Liabilities (LRF 400.0) provides APRA with the necessary information on policy liabilities by APRA Product Group to gain a better, more complete understanding of the development, disposition and quality of the profit results for a life insurance company across different product lines.

This Instruction Guide is designed to assist reporting entities in the completion of LRF 400.0. The Instruction Guide provides:

• general directions and notes regarding preparation and lodgement; and
• instructions relating to specific items.

General directions and notes

Reporting levels

LRF 400.0 must be completed by all life insurance companies, including friendly societies.

The form is to be completed for each statutory fund (approved benefit fund).

LRF 400.0 contains two sections:

1. All Statutory Fund Products; and
2. Totals by Class of Business and Basis.

Within section 1, reporting items are to be completed for each APRA Product Group (as defined below).

Within each APRA Product Group, some data will be collected on up to three bases, indicated as follows:

• ‘This Year’ – current position, based on current year’s valuation basis;
• ‘Last Year’ – current position, based on previous year’s valuation basis; and
• ‘LY/TY’ – current position, based on previous year’s valuation basis, except substituting current year’s investment and economic assumptions.

Unit of measurement

LRF 400.0 is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates.

Definitions

Definitions for data reporting items required by this form have been provided where appropriate in the instructions under the section headed ‘Instructions for specific items’ below.

Definitions, unless specified, apply to all life insurance companies, including friendly societies as if each reference to a statutory fund, or shareholders’ fund, were a reference to an approved benefit fund, or management fund, respectively. Likewise, reference to shareholders should be taken to embrace ‘members’ of a mutual association and/or a society. The term ‘life companies’ or ‘life insurance companies’ includes friendly societies unless stated otherwise. This is in line with the usage of terms in the Life Insurance Act 1995.

Reporting period

All life insurance companies, including friendly societies, are required to report the information in the reporting form on an annual basis only.

The annual information is to be completed in respect of the financial year of the life insurance company, not the calendar year.

The financial information requested in this form is to be reported as at the close of business for the last day of the reporting period.

Basis of preparation

In completing this form, unless specifically stated otherwise, institutions are to follow the basis that is used for the preparation of the annual financial statements in accordance with the Australian accounting standards.

Actuarial valuations and calculations included in, or used in the preparation of, the form must be in accordance with APRA and other prudential standards.

If additional clarification is required for specific items in this form, reference should be made to the section ‘Instructions for specific items’ below, which is provided as a guide.

For the purposes of reporting under this form, contracts are to be classified in accordance with Prudential Standard LPS 350 Contract Classification for the Purpose of Regulatory Reporting to APRA.

APRA Product Groups

For consistency of reporting across the range of forms applicable to life insurers, APRA adopts a single set of product groupings for life insurers. The following tables list the APRA Product Groups applicable to (1) life companies other than friendly societies, and (2) friendly societies.

<table cellspacing="0" cellpadding="0" style="width:396.75pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Ref.</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Product Group</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Notes</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Category</span></p></td></tr><tr style="height:15pt"><td colspan="4" style="width:385.2pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Life companies other than friendly societies</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L1</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Conventional </span><span>Participating </span><span>(Par)</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Includes</span><span> Whole of Life policies and Endowment policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:57pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L2</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Participating </span><span>Investment Account</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>. Exclude non-participating investment account policies (refer L8, below).</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L3</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> with</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L4</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on </span><span>an individual</span><span> </span><span>(</span><span>retail</span><span>)</span><span> </span><span>basis</span><span>.</span><span> </span><span>Include</span><span>s</span><span> </span><span>n</span><span>on-par</span><span>ticipating</span><span> conventional policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L5</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Disab</span><span>ility</span><span> Income Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued to individuals</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:26.35pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L6</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on a </span><span>group (</span><span>wholesale</span><span>)</span><span> </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L7</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Disab</span><span>ility</span><span> </span><span>I</span><span>ncome Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued on a group </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L8</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par Investment Policy</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include non-participating investment account and investment linked policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L9</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> without</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are NOT dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L10</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Other</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include all other products not specifically categorised above</span><span> – obtain APRA’s agreement to use.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>(Either can be </span><span>repor</span><span>ted)</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L11</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Policy Owners’ Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Retained profits </span><span>allocated to participating policy owners generally, but not yet vested as specific amounts to particular policies</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L12</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ Capital &amp; Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ capital plus retained profits </span><span>allocated to </span><span>sharehold</span><span>ers</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Capital</span></p></td></tr></tbody></table>

Note that Product Groups L11 and L12 are not applicable to this form.

Rather than requiring a Related Product Group (as defined in APRA and other prudential standards) of a Life Insurer’s business to be allocated across APRA Product Groups, APRA will permit it to be contained wholly within one APRA Product Group.

A separate set of product groupings is adopted for Friendly Societies, as follows:

<table cellspacing="0" cellpadding="0" style="width:424.5pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p><span>Ref.</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Product Group</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Notes</span></p></td></tr><tr style="height:15pt"><td colspan="3" style="width:412.95pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Friendly societies</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F1</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Education</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span style="font-family:Arial, sans-serif"></span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F2</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Account</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p></td></tr><tr style="height:33.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F3</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>y</span><span> </span><span>&amp;</span><span> Superannuation</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span></span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F4</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Risk</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>All products classified as Defined Benefit.</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F5</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Prepaid Funeral</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Funeral products that are </span><span>classified as Defined Contribution.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F6</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Linked</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p><p><span style="width:223.85pt; display:inline-block"></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F7</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Unallocated Benefit Fund Reserve</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Value of benefit funds which has not been allocated to either the benefit fund members or to the management fund.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F8</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ Capital and Retained Profits</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ capital plus retained profits allocated to members.</span></p></td></tr></tbody></table>

The classification of participating and non-participating business does not apply to friendly societies. Note that Product Groups F7 and F8 are not applicable to this form.

Instructions for specific items

While these instructions apply to all life insurance companies, including friendly societies, not all items may be applicable to both: some items may not be applicable to friendly societies while others may not be applicable to life insurers.

Section 1 All Statutory Fund Products

This section is to be completed for each class of business, as specified in the drop-down box list:

• Australia – Superannuation
• Australia – Ordinary
• Overseas – All business

The expressions ‘ordinary business’ and ‘superannuation business’ are defined in the dictionary of the Life Insurance Act 1995.

1.1. In Force Business and movements in Gross Contractual Regular Contributions over the year

Columns 1 to 10 are required to report on ‘This Year’ basis only.

Column 1 Policy Count (actual number, not scaled)

This is the number of policies in the statutory fund at the end of the period.

Column 2 Member Count (actual number, not scaled)

This is the number of members in the statutory fund at the end of the period. A member with more than one policy is considered as one member.

This would be based on the number of lives insured for group policies, joint-life individual policies, or policies that allow the insurance of auxiliary lives.

Column 5 Gross Contractual Regular Contributions

Include any business that is accepted through direct debit, has a specific contractual requirement for future on-going premiums, has an expectation of renewal each year (e.g. Yearly Renewable term products) or generally causes a policy to discontinue on cessation of future payment. It should be gross of all reinsurance.

Column 7 Gross Contractual Regular Contribution increases over the year

Refer to all increases to contractual regular premiums due to new policies sold during the period, including CPI increases.

Column 8 Gross Contractual Regular Contribution decreases due to claims and/or maturities

Decreases due to claims refer to the reduction in contractual regular contributions following a claim arising from the occurrence of an insured event. Note that it is only included when an insurance claim causes alteration or cessation of the premium, e.g. premiums paid on disability income policies will sometimes remain unaffected following a claim, depending on the policy terms and conditions.

Decreases due to maturities refer to the cessation of contractual regular contributions due to the maturity of a policy, i.e. following the completion of a policy’s term. This would occur when a member retires and is paid his/her superannuation benefit, a policy owner reaches a defined age on an Endowment policy or the termination of a savings plan on or after the contractual period.

Column 9 Gross Contractual Regular Contribution decreases due to voluntary discontinuance

Include any decrease in contractual regular contributions due to lapses or surrenders of policies, i.e. the cessation of regular premiums prior to the completion of the policy’s term.

Column 10 Other movements in Gross Contractual Regular Contributions over the year

Include the increase/decrease in contractual contributions following transfers of business from one statutory fund to another or any other movements not recorded in previous columns.

1.2. Components of Gross Policy Liability

Columns 1 to 10 are required to be reported separately on the three bases defined above (‘This Year’, ‘Last Year’ & ‘LY / TY’).

In accordance with the prudential standards and the financial statements, Gross Policy Liability should be gross of all reinsurance and, for participating benefits, should exclude Bonuses in respect of the current year.

As required by the prudential standards, the gross policy liability and the reinsurance policy liability are to be separately quantified, with the net policy liability then derived as the difference.

Policy Liabilities are to be valued in accordance with Prudential Standard LPS 1.04 Valuation of Policy Liabilities (LPS 1.04).

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Gross Best Estimate Liability –

Column 1 Gross Value of Future Policy Benefits

Where business is valued using techniques other than projection techniques, Gross Value of Future policy Benefits includes the total liability, before deducting the value of unrecouped acquisition expenses.

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded (see LPS 1.04, section 5, Overview).

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 2 Gross Value of Future Expenses

Column 3 Gross Value of (Balance of) Future Premiums

Column 4 Gross Reduction in Respect of Unrecouped Acquisition Expenses

Only for business valued using techniques other than a projection technique.

Column 5 Total Gross Best Estimate Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the sum of columns 1 to 4.

Column 6 Gross Value of Future Profits: Policy Owner Bonuses

For participating benefits, the value of future profits includes future bonuses only. Current year bonuses are excluded.

Column 7 Gross Value of Future Profits: Shareholder Profit Margins

Refer to section 6 of LPS 1.04 for definition and calculation of profit margins.

Column 8 Gross Investment Contract Liability

The net contractual obligation under a life investment contract which arises under the financial instrument element is referred to as the Life Investment Contract liability, this is consistent with the terminology adopted under AASB 1038.

The Investment Contract Liability is a component of the policy liability under the financial instrument element. It is to be determined according to the fair value through profit and loss provisions of the relevant accounting standards. (Refer to LPS 1.04, sections 2.1 and 2.2).

Column 9 Gross Management Services Asset or Liability

This is the liability in respect of the Management Services Element, determined as the difference between the Policy Liability and the Life Investment Contract liability (Column 8).

Include liabilities for deferred acquisition cost and deferred fee revenues.

Column 10 Gross Policy Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the total amount of gross policy liability.

1.3. Components of Reinsured Policy Liability and Net Policy Liability

Paragraph 12.1 of LPS 1.04 states that the reinsured policy liability consists of a reinsured best estimate liability and the value of the reinsured profit margins. Reinsurance must meet the definition of an insurance contract and involve the transfer of insurance risk.

Columns 1 to 11 are required to report on the three bases defined above.

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Reinsured Best Estimate Liability –

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded.

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 10 Reinsured Policy Liability [derived item]

This column is derived by the form as the sum of columns 5 to 9, and represents total amount of reinsurance policy liability.

Column 11 Net Policy Liability

This column represents the net amount of policy liability and the number entered should equal gross policy liability minus reinsured policy liability.

1.4. Sundry Items

This section is to be completed for all products, i.e. including non-participating products.

All figures in this section are to be reported on the ‘This Year’ basis.

Where applicable, figures in this section are to be reported on a net of reinsurance basis.

Columns 1 and 2 capture the cost of previous year and current period best estimate bonus. Refer to Prudential Standard LPS 7.02 General Standard for definition of best estimate bonus.

Column 10 Profit Carrier or Acquisition Expense Recovery Carrier

As defined in section 6 of LPS 1.04.

Column 11 Percentage of Profit Carrier or Acquisition Expense Recovery Carrier [derived item]

This column will be calculated automatically by the form and equals ‘Shareholder profit margins on cost of current period best estimate bonus’ (Column 3) divided by ‘Profit Carrier or Acquisition Expense Recovery Carrier’ (Column 10).

Section 2 Totals by Class of Business and Basis

No value is required to be entered in this section. Items in this section are derived fields that sum up policy liabilities by class of business and basis.

Columns 1 to 10 are required to report on ‘This Year’ basis only.

Column 1 Policy Count (actual number, not scaled)

This is the number of policies in the statutory fund at the end of the period.

Column 2 Member Count (actual number, not scaled)

This is the number of members in the statutory fund at the end of the period. A member with more than one policy is considered as one member.

This would be based on the number of lives insured for group policies, joint-life individual policies, or policies that allow the insurance of auxiliary lives.

Column 5 Gross Contractual Regular Contributions

Include any business that is accepted through direct debit, has a specific contractual requirement for future on-going premiums, has an expectation of renewal each year (e.g. Yearly Renewable term products) or generally causes a policy to discontinue on cessation of future payment. It should be gross of all reinsurance.

Column 7 Gross Contractual Regular Contribution increases over the year

Refer to all increases to contractual regular premiums due to new policies sold during the period, including CPI increases.

Column 8 Gross Contractual Regular Contribution decreases due to claims and/or maturities

Decreases due to claims refer to the reduction in contractual regular contributions following a claim arising from the occurrence of an insured event. Note that it is only included when an insurance claim causes alteration or cessation of the premium, e.g. premiums paid on disability income policies will sometimes remain unaffected following a claim, depending on the policy terms and conditions.

Decreases due to maturities refer to the cessation of contractual regular contributions due to the maturity of a policy, i.e. following the completion of a policy’s term. This would occur when a member retires and is paid his/her superannuation benefit, a policy owner reaches a defined age on an Endowment policy or the termination of a savings plan on or after the contractual period.

Column 9 Gross Contractual Regular Contribution decreases due to voluntary discontinuance

Include any decrease in contractual regular contributions due to lapses or surrenders of policies, i.e. the cessation of regular premiums prior to the completion of the policy’s term.

Column 10 Other movements in Gross Contractual Regular Contributions over the year

Include the increase/decrease in contractual contributions following transfers of business from one statutory fund to another or any other movements not recorded in previous columns.

Reporting Form LRF 400.0

Statement of Policy Liabilities

Instruction Guide

Introduction

Form LRF 400.0 Statement of Policy Liabilities (LRF 400.0) provides APRA with the necessary information on policy liabilities by APRA Product Group to gain a better, more complete understanding of the development, disposition and quality of the profit results for a life insurance company across different product lines.

This Instruction Guide is designed to assist reporting entities in the completion of LRF 400.0. The Instruction Guide provides:

• general directions and notes regarding preparation and lodgement; and
• instructions relating to specific items.

General directions and notes

Reporting levels

LRF 400.0 must be completed by all life insurance companies, including friendly societies.

The form is to be completed for each statutory fund (approved benefit fund).

LRF 400.0 contains two sections:

1. All Statutory Fund Products; and
2. Totals by Class of Business and Basis.

Within section 1, reporting items are to be completed for each APRA Product Group (as defined below).

Within each APRA Product Group, some data will be collected on up to three bases, indicated as follows:

• ‘This Year’ – current position, based on current year’s valuation basis;
• ‘Last Year’ – current position, based on previous year’s valuation basis; and
• ‘LY/TY’ – current position, based on previous year’s valuation basis, except substituting current year’s investment and economic assumptions.

Unit of measurement

LRF 400.0 is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates.

Definitions

Definitions for data reporting items required by this form have been provided where appropriate in the instructions under the section headed ‘Instructions for specific items’ below.

Definitions, unless specified, apply to all life insurance companies, including friendly societies as if each reference to a statutory fund, or shareholders’ fund, were a reference to an approved benefit fund, or management fund, respectively. Likewise, reference to shareholders should be taken to embrace ‘members’ of a mutual association and/or a society. The term ‘life companies’ or ‘life insurance companies’ includes friendly societies unless stated otherwise. This is in line with the usage of terms in the Life Insurance Act 1995.

Reporting period

All life insurance companies, including friendly societies, are required to report the information in the reporting form on an annual basis only.

The annual information is to be completed in respect of the financial year of the life insurance company, not the calendar year.

The financial information requested in this form is to be reported as at the close of business for the last day of the reporting period.

Basis of preparation

In completing this form, unless specifically stated otherwise, institutions are to follow the basis that is used for the preparation of the annual financial statements in accordance with the Australian accounting standards.

Actuarial valuations and calculations included in, or used in the preparation of, the form must be in accordance with APRA and other prudential standards.

If additional clarification is required for specific items in this form, reference should be made to the section ‘Instructions for specific items’ below, which is provided as a guide.

For the purposes of reporting under this form, contracts are to be classified in accordance with Prudential Standard LPS 350 Contract Classification for the Purpose of Regulatory Reporting to APRA.

APRA Product Groups

For consistency of reporting across the range of forms applicable to life insurers, APRA adopts a single set of product groupings for life insurers. The following tables list the APRA Product Groups applicable to (1) life companies other than friendly societies, and (2) friendly societies.

<table cellspacing="0" cellpadding="0" style="width:396.75pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Ref.</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Product Group</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Notes</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Category</span></p></td></tr><tr style="height:15pt"><td colspan="4" style="width:385.2pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Life companies other than friendly societies</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L1</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Conventional </span><span>Participating </span><span>(Par)</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Includes</span><span> Whole of Life policies and Endowment policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:57pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L2</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Participating </span><span>Investment Account</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>. Exclude non-participating investment account policies (refer L8, below).</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L3</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> with</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L4</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on </span><span>an individual</span><span> </span><span>(</span><span>retail</span><span>)</span><span> </span><span>basis</span><span>.</span><span> </span><span>Include</span><span>s</span><span> </span><span>n</span><span>on-par</span><span>ticipating</span><span> conventional policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L5</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Disab</span><span>ility</span><span> Income Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued to individuals</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:26.35pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L6</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on a </span><span>group (</span><span>wholesale</span><span>)</span><span> </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L7</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Disab</span><span>ility</span><span> </span><span>I</span><span>ncome Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued on a group </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L8</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par Investment Policy</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include non-participating investment account and investment linked policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L9</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> without</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are NOT dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L10</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Other</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include all other products not specifically categorised above</span><span> – obtain APRA’s agreement to use.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>(Either can be </span><span>repor</span><span>ted)</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L11</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Policy Owners’ Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Retained profits </span><span>allocated to participating policy owners generally, but not yet vested as specific amounts to particular policies</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L12</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ Capital &amp; Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ capital plus retained profits </span><span>allocated to </span><span>sharehold</span><span>ers</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Capital</span></p></td></tr></tbody></table>

Note that Product Groups L11 and L12 are not applicable to this form.

Rather than requiring a Related Product Group (as defined in APRA and other prudential standards) of a Life Insurer’s business to be allocated across APRA Product Groups, APRA will permit it to be contained wholly within one APRA Product Group.

A separate set of product groupings is adopted for Friendly Societies, as follows:

<table cellspacing="0" cellpadding="0" style="width:424.5pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p><span>Ref.</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Product Group</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Notes</span></p></td></tr><tr style="height:15pt"><td colspan="3" style="width:412.95pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Friendly societies</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F1</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Education</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span style="font-family:Arial, sans-serif"></span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F2</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Account</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p></td></tr><tr style="height:33.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F3</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>y</span><span> </span><span>&amp;</span><span> Superannuation</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span></span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F4</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Risk</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>All products classified as Defined Benefit.</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F5</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Prepaid Funeral</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Funeral products that are </span><span>classified as Defined Contribution.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F6</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Linked</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p><p><span style="width:223.85pt; display:inline-block"></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F7</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Unallocated Benefit Fund Reserve</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Value of benefit funds which has not been allocated to either the benefit fund members or to the management fund.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F8</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ Capital and Retained Profits</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ capital plus retained profits allocated to members.</span></p></td></tr></tbody></table>

The classification of participating and non-participating business does not apply to friendly societies. Note that Product Groups F7 and F8 are not applicable to this form.

Instructions for specific items

While these instructions apply to all life insurance companies, including friendly societies, not all items may be applicable to both: some items may not be applicable to friendly societies while others may not be applicable to life insurers.

Section 1 All Statutory Fund Products

This section is to be completed for each class of business, as specified in the drop-down box list:

• Australia – Superannuation
• Australia – Ordinary
• Overseas – All business

The expressions ‘ordinary business’ and ‘superannuation business’ are defined in the dictionary of the Life Insurance Act 1995.

1.1. In Force Business and movements in Gross Contractual Regular Contributions over the year

Columns 1 to 10 are required to report on ‘This Year’ basis only.

Column 1 Policy Count (actual number, not scaled)

This is the number of policies in the statutory fund at the end of the period.

Column 2 Member Count (actual number, not scaled)

This is the number of members in the statutory fund at the end of the period. A member with more than one policy is considered as one member.

This would be based on the number of lives insured for group policies, joint-life individual policies, or policies that allow the insurance of auxiliary lives.

Column 5 Gross Contractual Regular Contributions

Include any business that is accepted through direct debit, has a specific contractual requirement for future on-going premiums, has an expectation of renewal each year (e.g. Yearly Renewable term products) or generally causes a policy to discontinue on cessation of future payment. It should be gross of all reinsurance.

Column 7 Gross Contractual Regular Contribution increases over the year

Refer to all increases to contractual regular premiums due to new policies sold during the period, including CPI increases.

Column 8 Gross Contractual Regular Contribution decreases due to claims and/or maturities

Decreases due to claims refer to the reduction in contractual regular contributions following a claim arising from the occurrence of an insured event. Note that it is only included when an insurance claim causes alteration or cessation of the premium, e.g. premiums paid on disability income policies will sometimes remain unaffected following a claim, depending on the policy terms and conditions.

Decreases due to maturities refer to the cessation of contractual regular contributions due to the maturity of a policy, i.e. following the completion of a policy’s term. This would occur when a member retires and is paid his/her superannuation benefit, a policy owner reaches a defined age on an Endowment policy or the termination of a savings plan on or after the contractual period.

Column 9 Gross Contractual Regular Contribution decreases due to voluntary discontinuance

Include any decrease in contractual regular contributions due to lapses or surrenders of policies, i.e. the cessation of regular premiums prior to the completion of the policy’s term.

Column 10 Other movements in Gross Contractual Regular Contributions over the year

Include the increase/decrease in contractual contributions following transfers of business from one statutory fund to another or any other movements not recorded in previous columns.

1.2. Components of Gross Policy Liability

Columns 1 to 10 are required to be reported separately on the three bases defined above (‘This Year’, ‘Last Year’ & ‘LY / TY’).

In accordance with the prudential standards and the financial statements, Gross Policy Liability should be gross of all reinsurance and, for participating benefits, should exclude Bonuses in respect of the current year.

As required by the prudential standards, the gross policy liability and the reinsurance policy liability are to be separately quantified, with the net policy liability then derived as the difference.

Policy Liabilities are to be valued in accordance with Prudential Standard LPS 1.04 Valuation of Policy Liabilities (LPS 1.04).

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Gross Best Estimate Liability –

Column 1 Gross Value of Future Policy Benefits

Where business is valued using techniques other than projection techniques, Gross Value of Future policy Benefits includes the total liability, before deducting the value of unrecouped acquisition expenses.

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded (see LPS 1.04, section 5, Overview).

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 2 Gross Value of Future Expenses

Column 3 Gross Value of (Balance of) Future Premiums

Column 4 Gross Reduction in Respect of Unrecouped Acquisition Expenses

Only for business valued using techniques other than a projection technique.

Column 5 Total Gross Best Estimate Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the sum of columns 1 to 4.

Column 6 Gross Value of Future Profits: Policy Owner Bonuses

For participating benefits, the value of future profits includes future bonuses only. Current year bonuses are excluded.

Column 7 Gross Value of Future Profits: Shareholder Profit Margins

Refer to section 6 of LPS 1.04 for definition and calculation of profit margins.

Column 8 Gross Investment Contract Liability

The net contractual obligation under a life investment contract which arises under the financial instrument element is referred to as the Life Investment Contract liability, this is consistent with the terminology adopted under AASB 1038.

The Investment Contract Liability is a component of the policy liability under the financial instrument element. It is to be determined according to the fair value through profit and loss provisions of the relevant accounting standards. (Refer to LPS 1.04, sections 2.1 and 2.2).

Column 9 Gross Management Services Asset or Liability

This is the liability in respect of the Management Services Element, determined as the difference between the Policy Liability and the Life Investment Contract liability (Column 8).

Include liabilities for deferred acquisition cost and deferred fee revenues.

Column 10 Gross Policy Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the total amount of gross policy liability.

1.3. Components of Reinsured Policy Liability and Net Policy Liability

Paragraph 12.1 of LPS 1.04 states that the reinsured policy liability consists of a reinsured best estimate liability and the value of the reinsured profit margins. Reinsurance must meet the definition of an insurance contract and involve the transfer of insurance risk.

Columns 1 to 11 are required to report on the three bases defined above.

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Reinsured Best Estimate Liability –

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded.

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 10 Reinsured Policy Liability [derived item]

This column is derived by the form as the sum of columns 5 to 9, and represents total amount of reinsurance policy liability.

Column 11 Net Policy Liability

This column represents the net amount of policy liability and the number entered should equal gross policy liability minus reinsured policy liability.

1.4. Sundry Items

This section is to be completed for all products, i.e. including non-participating products.

All figures in this section are to be reported on the ‘This Year’ basis.

Where applicable, figures in this section are to be reported on a net of reinsurance basis.

Columns 1 and 2 capture the cost of previous year and current period best estimate bonus. Refer to Prudential Standard LPS 7.02 General Standard for definition of best estimate bonus.

Column 10 Profit Carrier or Acquisition Expense Recovery Carrier

As defined in section 6 of LPS 1.04.

Column 11 Percentage of Profit Carrier or Acquisition Expense Recovery Carrier [derived item]

This column will be calculated automatically by the form and equals ‘Shareholder profit margins on cost of current period best estimate bonus’ (Column 3) divided by ‘Profit Carrier or Acquisition Expense Recovery Carrier’ (Column 10).

Section 2 Totals by Class of Business and Basis

No value is required to be entered in this section. Items in this section are derived fields that sum up policy liabilities by class of business and basis.

Columns 1 to 10 are required to be reported separately on the three bases defined above (‘This Year’, ‘Last Year’ & ‘LY / TY’).

In accordance with the prudential standards and the financial statements, Gross Policy Liability should be gross of all reinsurance and, for participating benefits, should exclude Bonuses in respect of the current year.

As required by the prudential standards, the gross policy liability and the reinsurance policy liability are to be separately quantified, with the net policy liability then derived as the difference.

Policy Liabilities are to be valued in accordance with Prudential Standard LPS 1.04 Valuation of Policy Liabilities (LPS 1.04).

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Gross Best Estimate Liability –

Column 1 Gross Value of Future Policy Benefits

Where business is valued using techniques other than projection techniques, Gross Value of Future policy Benefits includes the total liability, before deducting the value of unrecouped acquisition expenses.

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded (see LPS 1.04, section 5, Overview).

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 2 Gross Value of Future Expenses

Column 3 Gross Value of (Balance of) Future Premiums

Column 4 Gross Reduction in Respect of Unrecouped Acquisition Expenses

Only for business valued using techniques other than a projection technique.

Column 5 Total Gross Best Estimate Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the sum of columns 1 to 4.

Column 6 Gross Value of Future Profits: Policy Owner Bonuses

For participating benefits, the value of future profits includes future bonuses only. Current year bonuses are excluded.

Column 7 Gross Value of Future Profits: Shareholder Profit Margins

Refer to section 6 of LPS 1.04 for definition and calculation of profit margins.

Column 8 Gross Investment Contract Liability

The net contractual obligation under a life investment contract which arises under the financial instrument element is referred to as the Life Investment Contract liability, this is consistent with the terminology adopted under AASB 1038.

The Investment Contract Liability is a component of the policy liability under the financial instrument element. It is to be determined according to the fair value through profit and loss provisions of the relevant accounting standards. (Refer to LPS 1.04, sections 2.1 and 2.2).

Column 9 Gross Management Services Asset or Liability

This is the liability in respect of the Management Services Element, determined as the difference between the Policy Liability and the Life Investment Contract liability (Column 8).

Include liabilities for deferred acquisition cost and deferred fee revenues.

Column 10 Gross Policy Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the total amount of gross policy liability.

1.3. Components of Reinsured Policy Liability and Net Policy Liability

Paragraph 12.1 of LPS 1.04 states that the reinsured policy liability consists of a reinsured best estimate liability and the value of the reinsured profit margins. Reinsurance must meet the definition of an insurance contract and involve the transfer of insurance risk.

Reporting Form LRF 400.0

Statement of Policy Liabilities

Instruction Guide

Introduction

Form LRF 400.0 Statement of Policy Liabilities (LRF 400.0) provides APRA with the necessary information on policy liabilities by APRA Product Group to gain a better, more complete understanding of the development, disposition and quality of the profit results for a life insurance company across different product lines.

This Instruction Guide is designed to assist reporting entities in the completion of LRF 400.0. The Instruction Guide provides:

• general directions and notes regarding preparation and lodgement; and
• instructions relating to specific items.

General directions and notes

Reporting levels

LRF 400.0 must be completed by all life insurance companies, including friendly societies.

The form is to be completed for each statutory fund (approved benefit fund).

LRF 400.0 contains two sections:

1. All Statutory Fund Products; and
2. Totals by Class of Business and Basis.

Within section 1, reporting items are to be completed for each APRA Product Group (as defined below).

Within each APRA Product Group, some data will be collected on up to three bases, indicated as follows:

• ‘This Year’ – current position, based on current year’s valuation basis;
• ‘Last Year’ – current position, based on previous year’s valuation basis; and
• ‘LY/TY’ – current position, based on previous year’s valuation basis, except substituting current year’s investment and economic assumptions.

Unit of measurement

LRF 400.0 is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates.

Definitions

Definitions for data reporting items required by this form have been provided where appropriate in the instructions under the section headed ‘Instructions for specific items’ below.

Definitions, unless specified, apply to all life insurance companies, including friendly societies as if each reference to a statutory fund, or shareholders’ fund, were a reference to an approved benefit fund, or management fund, respectively. Likewise, reference to shareholders should be taken to embrace ‘members’ of a mutual association and/or a society. The term ‘life companies’ or ‘life insurance companies’ includes friendly societies unless stated otherwise. This is in line with the usage of terms in the Life Insurance Act 1995.

Reporting period

All life insurance companies, including friendly societies, are required to report the information in the reporting form on an annual basis only.

The annual information is to be completed in respect of the financial year of the life insurance company, not the calendar year.

The financial information requested in this form is to be reported as at the close of business for the last day of the reporting period.

Basis of preparation

In completing this form, unless specifically stated otherwise, institutions are to follow the basis that is used for the preparation of the annual financial statements in accordance with the Australian accounting standards.

Actuarial valuations and calculations included in, or used in the preparation of, the form must be in accordance with APRA and other prudential standards.

If additional clarification is required for specific items in this form, reference should be made to the section ‘Instructions for specific items’ below, which is provided as a guide.

For the purposes of reporting under this form, contracts are to be classified in accordance with Prudential Standard LPS 350 Contract Classification for the Purpose of Regulatory Reporting to APRA.

APRA Product Groups

For consistency of reporting across the range of forms applicable to life insurers, APRA adopts a single set of product groupings for life insurers. The following tables list the APRA Product Groups applicable to (1) life companies other than friendly societies, and (2) friendly societies.

<table cellspacing="0" cellpadding="0" style="width:396.75pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Ref.</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Product Group</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Notes</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p class="SubHeading" style="text-align:center"><span>Category</span></p></td></tr><tr style="height:15pt"><td colspan="4" style="width:385.2pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Life companies other than friendly societies</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L1</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Conventional </span><span>Participating </span><span>(Par)</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Includes</span><span> Whole of Life policies and Endowment policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:57pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L2</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Participating </span><span>Investment Account</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>. Exclude non-participating investment account policies (refer L8, below).</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L3</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> with</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L4</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on </span><span>an individual</span><span> </span><span>(</span><span>retail</span><span>)</span><span> </span><span>basis</span><span>.</span><span> </span><span>Include</span><span>s</span><span> </span><span>n</span><span>on-par</span><span>ticipating</span><span> conventional policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L5</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Individual Disab</span><span>ility</span><span> Income Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued to individuals</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:26.35pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L6</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Lump Sum Risk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Lump sum risk policies issued on a </span><span>group (</span><span>wholesale</span><span>)</span><span> </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L7</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Group Disab</span><span>ility</span><span> </span><span>I</span><span>ncome Insurance</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Disab</span><span>ility</span><span> Income Insurance policies issued on a group </span><span>basis.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L8</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par Investment Policy</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include non-participating investment account and investment linked policies</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L9</span></p></td><td style="width:104.25pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuity</span><span> without</span><span> </span><span>L</span><span>ongevity </span><span>R</span><span>isk</span></p></td><td style="width:166.85pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>ies</span><span> provid</span><span>ing</span><span> periodic payments that are NOT dependent on the continuance of human life</span><span>.</span></p></td><td style="width:60.55pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Non-par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L10</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Other</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Include all other products not specifically categorised above</span><span> – obtain APRA’s agreement to use.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>(Either can be </span><span>repor</span><span>ted)</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L11</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Policy Owners’ Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Retained profits </span><span>allocated to participating policy owners generally, but not yet vested as specific amounts to particular policies</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Par</span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>L12</span></p></td><td style="width:104.25pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ Capital &amp; Retained Profits</span></p></td><td style="width:166.85pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Shareholders’ capital plus retained profits </span><span>allocated to </span><span>sharehold</span><span>ers</span><span>.</span></p></td><td style="width:60.55pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Capital</span></p></td></tr></tbody></table>

Note that Product Groups L11 and L12 are not applicable to this form.

Rather than requiring a Related Product Group (as defined in APRA and other prudential standards) of a Life Insurer’s business to be allocated across APRA Product Groups, APRA will permit it to be contained wholly within one APRA Product Group.

A separate set of product groupings is adopted for Friendly Societies, as follows:

<table cellspacing="0" cellpadding="0" style="width:424.5pt; border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr style="height:16.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top; background-color:#969696"><p><span>Ref.</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Product Group</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top; background-color:#969696"><p style="text-align:center"><span>Notes</span></p></td></tr><tr style="height:15pt"><td colspan="3" style="width:412.95pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:bottom; background-color:#c0c0c0"><p class="SubHeading" style="text-align:center"><span>Friendly societies</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F1</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Education</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span style="font-family:Arial, sans-serif"></span></p></td></tr><tr style="height:28.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F2</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Account</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in Section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p></td></tr><tr style="height:33.75pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F3</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Annuit</span><span>y</span><span> </span><span>&amp;</span><span> Superannuation</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span></span></p></td></tr><tr style="height:42.75pt"><td style="width:21.15pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F4</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Risk</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>All products classified as Defined Benefit.</span></p></td></tr><tr style="height:14.25pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F5</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Prepaid Funeral</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Funeral products that are </span><span>classified as Defined Contribution.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F6</span></p></td><td style="width:104.4pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Investment Linked</span></p></td><td style="width:265.8pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>As defined in section 14 of the </span><span style="font-style:italic">Life Insurance Act 1995</span><span>.</span></p><p><span style="width:223.85pt; display:inline-block"></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F7</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Unallocated Benefit Fund Reserve</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Value of benefit funds which has not been allocated to either the benefit fund members or to the management fund.</span><br><span></span></p></td></tr><tr style="height:9.5pt"><td style="width:21.15pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p><span>F8</span></p></td><td style="width:104.4pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ Capital and Retained Profits</span></p></td><td style="width:265.8pt; border-top:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:top"><p><span>Members’ capital plus retained profits allocated to members.</span></p></td></tr></tbody></table>

The classification of participating and non-participating business does not apply to friendly societies. Note that Product Groups F7 and F8 are not applicable to this form.

Instructions for specific items

While these instructions apply to all life insurance companies, including friendly societies, not all items may be applicable to both: some items may not be applicable to friendly societies while others may not be applicable to life insurers.

Section 1 All Statutory Fund Products

This section is to be completed for each class of business, as specified in the drop-down box list:

• Australia – Superannuation
• Australia – Ordinary
• Overseas – All business

The expressions ‘ordinary business’ and ‘superannuation business’ are defined in the dictionary of the Life Insurance Act 1995.

1.1. In Force Business and movements in Gross Contractual Regular Contributions over the year

Columns 1 to 10 are required to report on ‘This Year’ basis only.

Column 1 Policy Count (actual number, not scaled)

This is the number of policies in the statutory fund at the end of the period.

Column 2 Member Count (actual number, not scaled)

This is the number of members in the statutory fund at the end of the period. A member with more than one policy is considered as one member.

This would be based on the number of lives insured for group policies, joint-life individual policies, or policies that allow the insurance of auxiliary lives.

Column 5 Gross Contractual Regular Contributions

Include any business that is accepted through direct debit, has a specific contractual requirement for future on-going premiums, has an expectation of renewal each year (e.g. Yearly Renewable term products) or generally causes a policy to discontinue on cessation of future payment. It should be gross of all reinsurance.

Column 7 Gross Contractual Regular Contribution increases over the year

Refer to all increases to contractual regular premiums due to new policies sold during the period, including CPI increases.

Column 8 Gross Contractual Regular Contribution decreases due to claims and/or maturities

Decreases due to claims refer to the reduction in contractual regular contributions following a claim arising from the occurrence of an insured event. Note that it is only included when an insurance claim causes alteration or cessation of the premium, e.g. premiums paid on disability income policies will sometimes remain unaffected following a claim, depending on the policy terms and conditions.

Decreases due to maturities refer to the cessation of contractual regular contributions due to the maturity of a policy, i.e. following the completion of a policy’s term. This would occur when a member retires and is paid his/her superannuation benefit, a policy owner reaches a defined age on an Endowment policy or the termination of a savings plan on or after the contractual period.

Column 9 Gross Contractual Regular Contribution decreases due to voluntary discontinuance

Include any decrease in contractual regular contributions due to lapses or surrenders of policies, i.e. the cessation of regular premiums prior to the completion of the policy’s term.

Column 10 Other movements in Gross Contractual Regular Contributions over the year

Include the increase/decrease in contractual contributions following transfers of business from one statutory fund to another or any other movements not recorded in previous columns.

1.2. Components of Gross Policy Liability

Columns 1 to 10 are required to be reported separately on the three bases defined above (‘This Year’, ‘Last Year’ & ‘LY / TY’).

In accordance with the prudential standards and the financial statements, Gross Policy Liability should be gross of all reinsurance and, for participating benefits, should exclude Bonuses in respect of the current year.

As required by the prudential standards, the gross policy liability and the reinsurance policy liability are to be separately quantified, with the net policy liability then derived as the difference.

Policy Liabilities are to be valued in accordance with Prudential Standard LPS 1.04 Valuation of Policy Liabilities (LPS 1.04).

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Gross Best Estimate Liability –

Column 1 Gross Value of Future Policy Benefits

Where business is valued using techniques other than projection techniques, Gross Value of Future policy Benefits includes the total liability, before deducting the value of unrecouped acquisition expenses.

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded (see LPS 1.04, section 5, Overview).

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 2 Gross Value of Future Expenses

Column 3 Gross Value of (Balance of) Future Premiums

Column 4 Gross Reduction in Respect of Unrecouped Acquisition Expenses

Only for business valued using techniques other than a projection technique.

Column 5 Total Gross Best Estimate Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the sum of columns 1 to 4.

Column 6 Gross Value of Future Profits: Policy Owner Bonuses

For participating benefits, the value of future profits includes future bonuses only. Current year bonuses are excluded.

Column 7 Gross Value of Future Profits: Shareholder Profit Margins

Refer to section 6 of LPS 1.04 for definition and calculation of profit margins.

Column 8 Gross Investment Contract Liability

The net contractual obligation under a life investment contract which arises under the financial instrument element is referred to as the Life Investment Contract liability, this is consistent with the terminology adopted under AASB 1038.

The Investment Contract Liability is a component of the policy liability under the financial instrument element. It is to be determined according to the fair value through profit and loss provisions of the relevant accounting standards. (Refer to LPS 1.04, sections 2.1 and 2.2).

Column 9 Gross Management Services Asset or Liability

This is the liability in respect of the Management Services Element, determined as the difference between the Policy Liability and the Life Investment Contract liability (Column 8).

Include liabilities for deferred acquisition cost and deferred fee revenues.

Column 10 Gross Policy Liability [derived item]

This column will be calculated automatically by derivations contained within the form and represents the total amount of gross policy liability.

1.3. Components of Reinsured Policy Liability and Net Policy Liability

Paragraph 12.1 of LPS 1.04 states that the reinsured policy liability consists of a reinsured best estimate liability and the value of the reinsured profit margins. Reinsurance must meet the definition of an insurance contract and involve the transfer of insurance risk.

Columns 1 to 11 are required to report on the three bases defined above.

Columns 1 to 7 are for life insurance contracts. Columns 8 and 9 are for life investment contracts.

Columns 1 to 5 Reinsured Best Estimate Liability –

For participating benefits, the best estimate liability includes past declared bonuses only. Current year bonuses are excluded.

For non-participating benefits with an entitlement to Discretionary additions, the cost of the current year Discretionary Additions should be included as part of the best estimate liability.

Column 10 Reinsured Policy Liability [derived item]

This column is derived by the form as the sum of columns 5 to 9, and represents total amount of reinsurance policy liability.

Column 11 Net Policy Liability

This column represents the net amount of policy liability and the number entered should equal gross policy liability minus reinsured policy liability.

1.4. Sundry Items

This section is to be completed for all products, i.e. including non-participating products.

All figures in this section are to be reported on the ‘This Year’ basis.

Where applicable, figures in this section are to be reported on a net of reinsurance basis.

Columns 1 and 2 capture the cost of previous year and current period best estimate bonus. Refer to Prudential Standard LPS 7.02 General Standard for definition of best estimate bonus.

Column 10 Profit Carrier or Acquisition Expense Recovery Carrier

As defined in section 6 of LPS 1.04.

Column 11 Percentage of Profit Carrier or Acquisition Expense Recovery Carrier [derived item]

This column will be calculated automatically by the form and equals ‘Shareholder profit margins on cost of current period best estimate bonus’ (Column 3) divided by ‘Profit Carrier or Acquisition Expense Recovery Carrier’ (Column 10).

Section 2 Totals by Class of Business and Basis

No value is required to be entered in this section. Items in this section are derived fields that sum up policy liabilities by class of business and basis.

1.4. Sundry Items

This section is to be completed for all products, i.e. including non-participating products.

All figures in this section are to be reported on the ‘This Year’ basis.

Where applicable, figures in this section are to be reported on a net of reinsurance basis.

Columns 1 and 2 capture the cost of previous year and current period best estimate bonus. Refer to Prudential Standard LPS 7.02 General Standard for definition of best estimate bonus.

Column 10 Profit Carrier or Acquisition Expense Recovery Carrier

As defined in section 6 of LPS 1.04.

Column 11 Percentage of Profit Carrier or Acquisition Expense Recovery Carrier [derived item]

This column will be calculated automatically by the form and equals ‘Shareholder profit margins on cost of current period best estimate bonus’ (Column 3) divided by ‘Profit Carrier or Acquisition Expense Recovery Carrier’ (Column 10).

Section 2 Totals by Class of Business and Basis

No value is required to be entered in this section. Items in this section are derived fields that sum up policy liabilities by class of business and basis.