Instruction Guide

Introduction

This form requires Medical Defence Organisations (MDOs) to report information about their assets, liability and capital. It should:

• Include transactions of the MDO regardless of the residency status of the customer or the asset or liability.
• Include any offshore operations or business of the MDO and will reflect investments in associated entities and joint ventures.
• Not include controlled entities of the MDO.

Reporting Obligations

MDOs are required to report on a half-yearly basis (that is, six monthly intervals), based on their financial year.

For annual reporting, MDOs must lodge a form within four months of the end of their financial year. The information required on an annual basis must be reported as at the last day of the reporting period on a financial year-to-date basis of the MDO.

For half-yearly reporting (that is, the half-year that does not correspond with the MDO’s financial year end), MDOs must lodge a form within 20 business days of the end of that six month period.

Audit Requirements

This form must be subject to audit review and testing on an annual basis or more frequently if necessary to enable the auditor to form an opinion on the accuracy and reliability of the data. The auditor must provide a certificate to the MDO specifying whether, in their opinion, the data provided by the MDO are reliable. The MDO must submit this certificate to APRA on an annual basis.

The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Guidance Statement issued by the Auditing and Assurance Standards Board.

Definitions

Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’

Basis of Preparation

Unit of Measurement

This form is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in a currency other than Australian currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121)..

Assets

Fair value of assets

Assets other than land and building and other assets that are not normally relied on to meet Outstanding Claims Liabilities (OCL) or not generally of significance in assessing the performance of a MDO should be reported at fair value. Fair value has the same meaning as defined in AASB 132 Financial Instruments: Presentation (AASB 132).

Reinsurance

Where a reinsurance contract does not, despite its form, provide for the transfer of risk against loss or liability from the MDO to the reinsurer, it must not be accounted for as reinsurance, but as a form of financing. The premium paid by the ceding MDO must be recognised as an asset by the MDO and a liability by the reinsurer.