Schedule
Schedule
Schedule
Reporting Standard GRS 110.0 (2010) Minimum Capital Requirement comprises the 39 pages commencing on the next page.
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Commonwealth legislation
This Act has been repealed and is no longer in force. It is retained for historical reference.
This instrument requires all general insurers (including foreign insurers operating through Australian branches) to report their Minimum Capital Requirement (MCR), capital base and related risk-charge summaries to APRA — normally each quarter and annually — using Form GRF 110.0. APRA uses the data for prudential supervision to assess capital adequacy; reporting includes audited annual returns, digital authorisation, and specified calculation and deduction rules that determine whether an insurer meets prescribed capital floors and ratios.
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Direct links to the current provisions in Financial Sector (Collection of Data) (reporting standard) determination No. 2 of 2010 - GRS 110.0 (2010) - Minimum Capital Requirement.
Schedule
Reporting Standard GRS 110.0 (2010) Minimum Capital Requirement comprises the 39 pages commencing on the next page.
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act). It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, in relation to their Minimum Capital Requirement.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer, other than a foreign insurer, must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Licensed Insurer’ for each reporting period.
A foreign insurer must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Branch Insurer’ for each reporting period.
(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or
(b) by manually completing Form GRF 110.0 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.
Where the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).
Note: The ‘Direct to APRA’ application software and paper forms may be obtained from APRA.
Reporting periods and due dates
(a) in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and
(b) in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.
Note: The annual information required from an insurer by paragraph 3 or 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act). This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.
(a) more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or
(b) less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).
(a) in the case of the quarterly information referred to in subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and
(b) in the case of the annual information referred to in subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.
Note: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards. The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts. Accordingly, the auditor’s certificate relating to the annual information referred to in subparagraph 6(b) must be provided to APRA by the time specified in subparagraph 8(b) of this reporting standard (unless an extension is granted under paragraph 9).
The information provided by an insurer under this reporting standard must be the product of processes and controls that have been reviewed and tested by the appointed auditor of the insurer. This will require the auditor to review and test the systems, processes and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable. This review and testing must be done on an annual basis or more frequently if necessary to enable the appointed auditor to form an opinion on the accuracy and reliability of the data.
The information provided by an insurer under this reporting standard must be subject to processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
(a) under subparagraph 5(a), the officer must digitally sign, authorise and encrypt the information (for which purpose APRA’s certificate authority will issue digital certificates, for use with the ‘Direct to APRA’ application, to officers of the insurer who have authority from the insurer to transmit data to APRA); or
(b) under subparagraph 5(b), the completed form must be signed in accordance with paragraph 14.
(a) obtain from the agent a paper copy of the completed form as provided to APRA (under either subparagraph 5(a) or (b)); and
(b) cause the paper copy to be signed in accordance with paragraph 14; and
(c) lodge the signed paper copy with APRA by mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales, by the relevant due date (unless APRA, in writing, waives the requirement in relation to the insurer to lodge the signed paper copy with APRA).
Note: APRA may, for example, decide to waive the requirement under subparagraph 13(c) where an insurer has undertaken to retain the signed copy of the completed form for an agreed period of time.
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
APRA may make minor variations to the instructions to a form, to clarify their application to the form provided it does not involve changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify insurers of this in writing.
Transition
Interpretation
appointed auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;
capital standards means the prudential standards which relate to capital adequacy as defined in Prudential Standard GPS 001 Definitions;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: In the forms and instructions, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.
Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;
reporting period means a period mentioned in subparagraph 6(a) or (b) or, if appropriate, paragraph 7.
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act). It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, in relation to their Minimum Capital Requirement.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer, other than a foreign insurer, must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Licensed Insurer’ for each reporting period.
A foreign insurer must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Branch Insurer’ for each reporting period.
(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or
(b) by manually completing Form GRF 110.0 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.
Where the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).
Note: The ‘Direct to APRA’ application software and paper forms may be obtained from APRA.
Reporting periods and due dates
(a) in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and
(b) in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.
Note: The annual information required from an insurer by paragraph 3 or 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act). This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.
(a) more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or
(b) less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).
(a) in the case of the quarterly information referred to in subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and
(b) in the case of the annual information referred to in subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.
Note: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards. The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts. Accordingly, the auditor’s certificate relating to the annual information referred to in subparagraph 6(b) must be provided to APRA by the time specified in subparagraph 8(b) of this reporting standard (unless an extension is granted under paragraph 9).
The information provided by an insurer under this reporting standard must be the product of processes and controls that have been reviewed and tested by the appointed auditor of the insurer. This will require the auditor to review and test the systems, processes and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable. This review and testing must be done on an annual basis or more frequently if necessary to enable the appointed auditor to form an opinion on the accuracy and reliability of the data.
The information provided by an insurer under this reporting standard must be subject to processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
(a) under subparagraph 5(a), the officer must digitally sign, authorise and encrypt the information (for which purpose APRA’s certificate authority will issue digital certificates, for use with the ‘Direct to APRA’ application, to officers of the insurer who have authority from the insurer to transmit data to APRA); or
(b) under subparagraph 5(b), the completed form must be signed in accordance with paragraph 14.
(a) obtain from the agent a paper copy of the completed form as provided to APRA (under either subparagraph 5(a) or (b)); and
(b) cause the paper copy to be signed in accordance with paragraph 14; and
(c) lodge the signed paper copy with APRA by mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales, by the relevant due date (unless APRA, in writing, waives the requirement in relation to the insurer to lodge the signed paper copy with APRA).
Note: APRA may, for example, decide to waive the requirement under subparagraph 13(c) where an insurer has undertaken to retain the signed copy of the completed form for an agreed period of time.
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
APRA may make minor variations to the instructions to a form, to clarify their application to the form provided it does not involve changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify insurers of this in writing.
Transition
Interpretation
appointed auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;
capital standards means the prudential standards which relate to capital adequacy as defined in Prudential Standard GPS 001 Definitions;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: In the forms and instructions, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.
Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;
reporting period means a period mentioned in subparagraph 6(a) or (b) or, if appropriate, paragraph 7.
Introduction
GRF 110.0 Minimum Capital Requirement reports the summary of the risk charges, Minimum Capital Requirement (MCR), the capital base, net assets in Australia, and compliance with the capital requirements as prescribed in the ‘capital standards’[2].
The individual risk charges and capital base summarised on this form are calculated in other forms. The form will automatically calculate the MCR of the reporting insurer based on the information reported for the individual risk charges. Additionally, information relating to the capital surplus / deficiency and capital ratios will be calculated automatically.
This form is required to be subject to audit review and testing. The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:
the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);
the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));
the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));
the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
This form is to be completed by:
The form reports in Australian currency rounded in thousands of dollars (no decimal place). Ratios are expressed to 2 decimal places.
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
This form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in Reporting Standard GRS 110.0 Minimum Capital Requirement.
Specific instructions
The different categories of insurers are defined in Prudential Standard GPS 001 Definitions. Insurers are required to select the category which best describes their status.
Note: Category C insurers (foreign insurers operating as a foreign branches in Australia) are required to complete the reporting form for branches.
This represents the total capital charge applicable for the credit substitutes provided by the reporting insurer. This amount is calculated in item 14 ‘TOTAL Off balance sheet required risk charge’ in GRF 130.0 Off Balance Sheet Business – Credit Substitutes Provided and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total capital charge applicable for the charges and encumbrances granted by the reporting insurer. This amount is calculated in the item titled ‘Adjusted Required Capital Charge’ in GRF 130.2 Off Balance Sheet Business – Charges Granted and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.1. GRF 140.0 Investments - Direct Interest Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct interest holdings of the reporting insurer. This amount is calculated in item 7 ‘Total Investment Risk Charge’ in GRF 140.0 Investments - Direct Interest Rate Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.2. GRF 140.1 Investments - Direct Equity Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct equity holdings of the reporting insurer. This amount is calculated in item 9 ‘Total investment risk charge’ in GRF 140.1 Investments – Direct Equity Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.3. GRF 140.2 Investments - Direct Property Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct property holdings of the reporting insurer. This figure is calculated in column headed ‘Investment Risk Charge’ for line item titled ‘Total direct property investments’ in GRF 140.2 Investments - Direct Property Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.4. GRF 140.3 Investments - Loans and Advances and Risk Charge
This represents the total investment risk charge applicable for the loans and advances provided by the reporting insurer. This amount is calculated in item 4 ‘Total Investment Risk Charge’ in GRF 140.3 Investments – Loans and Advances and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.5. GRF 140.4 Investments - Indirectly Held by Insurer and Risk Charge
This represents the total investment risk charge applicable for assets that are indirectly held by the reporting insurer. This amount is calculated in item 12 ‘Total Investment Risk Charge’ in GRF 140.4 Investments – Indirectly Held by Insurer and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.6. GRF 300.0 Statement of Financial Position
This represents the total investment risk charge for all applicable assets listed in GRF 300.0 Statement of Financial Position. It excludes assets that are subject to a risk charge under the forms GRF 140.0 – 140.4, GRF 150.0, GRF 301.0 and assets that are deducted from the Capital Base.
This figure is automatically entered by the form and represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 13 ‘Total assets’ in GRF 300.0 Statement of Financial Position.
This figure represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 4 ‘Net reinsurance assets’ in GRF 301.0 Reinsurance Assets and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The investment risk charge may be reduced where the insurer holds certain types of collateral against an asset, or where an asset has been guaranteed, as a means of reducing risk. Accordingly this item represents the ‘rebate’ of the investment risk charge on these assets that is calculated in either GRF 140.0 – GRF 140.4 or GRF 300.0 Statement of Financial Position. The rebate represents the difference between the investment risk capital charge applicable to the value of the eligible collateral or guarantee provided to the insurer and the investment risk capital charge applicable to the asset(s) being supported.
This item is calculated in GRF 130.3 Off Balance Sheet Business - Credit Support Received and represents the sum of ‘Adjustment to Investment Capital Charge’ in ‘Part A - Eligible Collateral Provided to Reporting Insurer’ and ‘Part B - Guarantees or Letter of Credit Provided to Reporting Insurer’.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total investment concentration risk charge for exposures listed in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure represents the item ‘Net concentration risk charge’ calculated in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total investment risk charge for derivative exposures listed in GRF 160.0 Derivatives Activity and Risk Charge. This figure represents the item titled ‘Total Derivatives Activity Risk Charge’ in GRF 160.0 Derivatives Activity and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total concentration risk charge applicable for the reporting insurer. This figure represents the amount disclosed in item ‘Total concentration risk charge’ in GRF 170.0 Concentration Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net outstanding claims provision (OCP) of an insurer is greater than the value determined under Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation (GPS 310). This figure represents the ‘TOTAL’ line item under column 11 headed ‘OCP Insurance risk charge’ in the table titled ‘Part 3: Total’ of GRF 210.0 Outstanding Claims Provision - Insurance Risk Charge. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net premiums liabilities of an insurer is greater than the value determined under GPS 310. This figure represents the ‘TOTAL’ line item under the column 9 headed ‘Premium Liabilities Insurance Risk Charge’ in the table titled ‘Part 3A: GPS 310 Total’ of GRF 210.1 Premium Liabilities - Insurance Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
Report the variation in capital charges in this item with a brief description (no more than 200 characters) and the amount of each variation which has been approved by APRA. A reduction in risk charges resulting from variations has to be reported as a negative number, while any increase needs to be reported as a positive number.
Where a loan to a related party is on non-commercial terms, a 100% capital factor must apply. The difference between the investment risk charge on the loan in GRF 140.3 Investments – Loans and Advances and Risk Charge and the risk charge with a 100% capital factor must be recorded at this item.
Where an insurer uses the internal model-based (IMB) method to determine the MCR in accordance with Prudential Standard GPS 113 Capital Adequacy: Internal Model-based Method, the difference between the MCR determined using the prescribed method and the IMB method should be reported here. During the first two years of using the IMB method, an insurer’s MCR calculated using the IMB method should be at least 90 per cent of the MCR determined using the prescribed method.
The total variation is calculated automatically by the form.
This item is calculated automatically by the form.
Where an insurer is a Category D or E insurer (i.e. captive insurer), the minimum capital requirement (MCR) is calculated as follows:
Where an insurer is in a category other than a Category D or E insurer, the MCR is calculated as follows:
The sum of items 1-4 and 6-11 (as reported in GRF 110.0 Minimum Capital Requirement) less item 5 is calculated as:
Add
Less
This represents the total eligible capital base of the insurer. This amount is calculated in item 3 titled ‘Total Capital Base’ in GRF 120.0 Determination of Capital Base. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ less the amount calculated for item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ divided by the value of item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
This is another way of looking at the solvency coverage and this figure represents the value of item 12 titled ‘Minimum Capital Requirement’ divided by the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’.
This figure will be calculated automatically by the form.
‘Adjusted Net Assets in Australia’ refers to total assets less assets that are excluded as ‘Assets in Australia’ for the purpose of section 28 of the Act.
Item 17.4 Adjusted Net Assets in Australia is determined from the following:
17.1 Net Assets per form GRF 300.0 Statement of Financial Position
The amount reported in item 17.1 ‘Net Assets per form GRF 300.0: Statement of Financial Position’ on GRF 110.0 Minimum Capital Requirement must equal the value of item 25 titled ‘Net Assets’ under the ‘Amount – Inside Australia’ column on GRF 300.0 Statement of Financial Position.
This figure is automatically entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.2 Net insurance liabilities surplus / (deficit) inside Australia after tax effect
Include in this item the value of net outstanding claims liabilities and net AASB 1023 premiums liabilities that are recognised in GRF 300.0 Statement of Financial Position (GRF 300.0), that are in surplus or deficit of the technical provisions required by GPS 310 (i.e. the net outstanding claims provision reported in GRF 210.0 Outstanding Claims Provision – Insurance Risk Charge and the net premiums liabilities reported in GRF 210.1 Premium Liabilities – Insurance Risk Charge). This should be reported for amounts inside Australia only.
This must be calculated as per the following:
Add
Less
Item 2.4.1 of GRF 300.0: Total net amountss recoverable on reinsurance contracts reported in item 2.4, that relate to claims recognised in the calculation of the Outstanding Claims Liability (i.e. other than reinsurance recoveries relating to claims that have been paid) (inside Australia amount)
Item 2.2.2.1 of GRF 300.0: Total net amounts recoverable (other than reinsurance recoveries receivable) that are reported in item 2.2.2 and that relate to claims recognised in the calculation of insurance liabilities that have not been paid - relating to Outstanding Claims Liability (OCL) (inside Australia amount
Item 9 of GRF 300.0. ‘Deferred acquisitions costs’ (inside Australia amount)
Item 8 of GRF 300.0. ‘Deferred reinsurance expense’ (inside Australia amount)
The net value of any other items which form the total of AASB 1023 net premiums liabilities (inside Australia amounts only). This would include:
Deferred reinsurance exchange commission;
Unearned commission revenue; and
Deferred levies and charges.
Add
Less the sum of the outstanding claims provisions net of reinsurance and non reinsurance recoveries as reported in GRF 210.0 per the following:
Less the sum of the premiums liabilities net of expected reinsurance and non reinsurance recoveries as reported in GRF 210.1 per the following:
Add
Deferred reinsurance expense for future business not yet written
Include in this item the amount of the total deferred reinsurance expense reported at item 8 on GRF 300.0 that relates to business that has not yet been written and is the amount inside Australia. This amount represents the cover that an insurer has under a particular reinsurance contract which is available for future business written up to the end of the reinsurance contract. Amounts must not be included in this item where the underlying reinsurance arrangement does not comply with the threshold levels of reinsurance documentation set out in GPS 112 or the governing law requirements set out in GPS 230.
Less
Tax effect of net OCP and Premiums liabilities in surplus / deficit in excess of the liability valuation required under GPS 310
Any surplus / deficit of technical provisions must be adjusted for the tax effect (i.e. the corporate tax rate multiplied by the net amount).
17.3 Net assets in Australia (before deductions)
This amount is calculated automatically by the form as follows:
Add:
Less:
Assets specifically excluded from being considered inside Australia by Prudential Standard GPS 120 Assets in Australia.
17.4. Deductions for assets specifically excluded from being considered inside Australia:
17.4.1. Goodwill
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Less:
Plus:
Plus:
The following item from GRF 140.1 Investments – Direct Equity Holdings and Risk Charge (where it includes amounts inside Australia);
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.2 Other intangible assets
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Less:
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.3 Deferred Tax Assets (net of any Deferred Tax Liabilities)
Disclose the value of deferred tax assets (net of any deferred tax liabilities) recognised in GRF 300.0 Statement of Financial Position.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The amount entered in this field must be either positive or zero, if the result of the netting calculation is a negative, enter zero.
17.4.4 Surplus in defined benefit superannuation fund
Disclose the value of any surplus, net of deferred tax liabilities, in any defined benefit superannuation fund of which the insurer is an employer-sponsor, unless otherwise approved, in writing, by APRA. Any excluded surplus must reverse any associated deferred tax liability from Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must not be greater than the amount reported in item 6.2 ‘Surplus in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position.
Deferred Tax Liabilities should not be counted twice in 17.2.3 above and in this item.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.5 Deficit in defined benefit superannuation fund
Report the value of any deficit in a defined benefit superannuation fund of which the insurer is an employer-sponsor and that is not already reflected in Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must only include deficits not already disclosed in item 22.2 ‘Deficit in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.6 Holdings of own Tier 1 capital instruments
Disclose the value of holdings of own Tier 1 capital instruments of the insurer.
17.4.7 Net unrealised fair value gains (losses) from changes in the GI's own credit worthiness
This item only applies to general insurers that have designated their own debt instruments at fair value under the fair value option in AASB 139 Financial Instruments: Recognition and Measurement.
Deduct/(add back) any unrealised fair value gains/(losses) included in Tier 1 capital (before deductions) arising from changes in the reporting general insurer’s own credit worthiness (e.g. reduction in fair value of the general insurer’s outstanding debt due to change in credit rating).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.8 Net unrealised gains (losses) on effective cash flow hedges
Disclose the value of cumulative fair value gains and losses on effective cash flow hedges reflected in retained earnings or reserves included in Tier 1 capital that do not offset gains or losses on revaluations in reserves included in Tier 1 capital. Deduct the gains on hedges and add back the losses.
17.4.9 Reinsurance assets related to reinsurance contracts that do not meet the reinsurance documentation test
The figure for reinsurance assets relates to reinsurance contracts that do not meet the reinsurance documentation test. This represents the value of item 1.8 plus item 2.4 plus item 3.6 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the asset is deemed not inside Australia.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.10 Reinsurance assets receivable under reinsurance contracts that do not meet governing law requirements
Report all reinsurance assets receivable under each reinsurance contract entered into by the insurer incepting on or after 31 December 2008 that do not meet the requirements of paragraph 31 of Prudential Standard GPS 230 Reinsurance Management.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement. The amount should represent the value of item 1.9 plus item 2.5 plus item 3.7 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the insurer has reinsurance assets that are deemed not inside Australia.
17.4.11 Expected dividends
Report the amount of dividends which are expected, but not declared or paid.
17.4.12 Other deductions
Disclose other deductions as required under GPS 112, such as:
Disclose deficit after taking into account adjustments in the amount available in the respective revaluation reserves for the following items, to the extent not already accounted for in current year earnings or retained earnings:
Property not held at fair value;
Investments in subsidiaries not held at fair value; or
Investment in associates, including any excess of the share of losses in associates under equity accounting.
Identified impairment of certain assets
Disclose any identified impairment of an asset where the impairment has not already been taken into account in profit or loss or the impairment has been incorporated in fair value changes captured in an asset revaluation reserve included in Upper Tier 2 capital. This will include the value of any deficit in asset revaluation reserves included in Upper Tier 2 capital after taking into account all adjustments.
Disclose the value of own holdings of Upper Tier 2 capital instruments.
Disclose the value of own holdings of Lower Tier 2 capital instruments.
17.4.13 Variation in deduction by other adjustments approved by APRA
Include any additions or reduction in deductions that have been approved by APRA.
17.5 Assets under a fixed or floating charge, mortgage or other security to the extent of the indebtedness secured by such assets.
Such assets are excluded from being considered inside Australia up to the value of the charge/encumbrance. Where the charge over the assets is only given to support the value of insurance liabilities of the insurer, only the excess of the value of the assets charged/encumbered, over the value of the insurance liabilities, is excluded from being considered inside Australia.
This amount represents the total of all items reported in column headed ‘Excess of Charge Assets over Liabilities Supported’ in GRF 130.2 Off Balance Sheet Business - Charges Granted and Risk Charge.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.6 Adjusted Net Assets in Australia
This amount is calculated automatically by the form.
Introduction
GRF 110.0 Minimum Capital Requirement reports the summary of the risk charges, Minimum Capital Requirement (MCR), the capital base, net assets in Australia, and compliance with the capital requirements as prescribed in the ‘capital standards’[2].
The individual risk charges and capital base summarised on this form are calculated in other forms. The form will automatically calculate the MCR of the reporting insurer based on the information reported for the individual risk charges. Additionally, information relating to the capital surplus / deficiency and capital ratios will be calculated automatically.
This form is required to be subject to audit review and testing. The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:
the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);
the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));
the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));
the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
This form is to be completed by:
Introduction
GRF 110.0 Minimum Capital Requirement reports the summary of the risk charges, Minimum Capital Requirement (MCR), the capital base, net assets in Australia, and compliance with the capital requirements as prescribed in the ‘capital standards’[2].
The individual risk charges and capital base summarised on this form are calculated in other forms. The form will automatically calculate the MCR of the reporting insurer based on the information reported for the individual risk charges. Additionally, information relating to the capital surplus / deficiency and capital ratios will be calculated automatically.
This form is required to be subject to audit review and testing. The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Standards Board Guidance Statement issued by the Auditing and Assurance Standards Board.
Information provided in the form in respect of a financial year of an insurer forms part of the insurer’s ‘yearly statutory accounts’ within the meaning of section 3 of the Insurance Act 1973 (the Act). This means that:
the completed form for the financial year must be audited by the Appointed Auditor of the insurer (see paragraph 49J(1)(a) of the Act);
the insurer must make such arrangements as to enable the auditor to do this (subsection 49J(2));
the auditor must give the insurer a certificate relating to the completed form (and other completed forms that are part of the insurer’s yearly statutory accounts), which must contain statements of the auditor’s opinion on the matters required by the prudential standards to be dealt with in the certificate (subsection 49J(3));
the certificate must be lodged with APRA as provided for in the prudential standards (paragraph 49L(1)(a)), namely by the due date for lodging the form in respect of the financial year for the insurer.
This form is to be completed by:
The form reports in Australian currency rounded in thousands of dollars (no decimal place). Ratios are expressed to 2 decimal places.
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
This form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in Reporting Standard GRS 110.0 Minimum Capital Requirement.
Specific instructions
The different categories of insurers are defined in Prudential Standard GPS 001 Definitions. Insurers are required to select the category which best describes their status.
Note: Category C insurers (foreign insurers operating as a foreign branches in Australia) are required to complete the reporting form for branches.
This represents the total capital charge applicable for the credit substitutes provided by the reporting insurer. This amount is calculated in item 14 ‘TOTAL Off balance sheet required risk charge’ in GRF 130.0 Off Balance Sheet Business – Credit Substitutes Provided and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total capital charge applicable for the charges and encumbrances granted by the reporting insurer. This amount is calculated in the item titled ‘Adjusted Required Capital Charge’ in GRF 130.2 Off Balance Sheet Business – Charges Granted and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.1. GRF 140.0 Investments - Direct Interest Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct interest holdings of the reporting insurer. This amount is calculated in item 7 ‘Total Investment Risk Charge’ in GRF 140.0 Investments - Direct Interest Rate Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.2. GRF 140.1 Investments - Direct Equity Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct equity holdings of the reporting insurer. This amount is calculated in item 9 ‘Total investment risk charge’ in GRF 140.1 Investments – Direct Equity Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.3. GRF 140.2 Investments - Direct Property Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct property holdings of the reporting insurer. This figure is calculated in column headed ‘Investment Risk Charge’ for line item titled ‘Total direct property investments’ in GRF 140.2 Investments - Direct Property Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.4. GRF 140.3 Investments - Loans and Advances and Risk Charge
This represents the total investment risk charge applicable for the loans and advances provided by the reporting insurer. This amount is calculated in item 4 ‘Total Investment Risk Charge’ in GRF 140.3 Investments – Loans and Advances and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.5. GRF 140.4 Investments - Indirectly Held by Insurer and Risk Charge
This represents the total investment risk charge applicable for assets that are indirectly held by the reporting insurer. This amount is calculated in item 12 ‘Total Investment Risk Charge’ in GRF 140.4 Investments – Indirectly Held by Insurer and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.6. GRF 300.0 Statement of Financial Position
This represents the total investment risk charge for all applicable assets listed in GRF 300.0 Statement of Financial Position. It excludes assets that are subject to a risk charge under the forms GRF 140.0 – 140.4, GRF 150.0, GRF 301.0 and assets that are deducted from the Capital Base.
This figure is automatically entered by the form and represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 13 ‘Total assets’ in GRF 300.0 Statement of Financial Position.
This figure represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 4 ‘Net reinsurance assets’ in GRF 301.0 Reinsurance Assets and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The investment risk charge may be reduced where the insurer holds certain types of collateral against an asset, or where an asset has been guaranteed, as a means of reducing risk. Accordingly this item represents the ‘rebate’ of the investment risk charge on these assets that is calculated in either GRF 140.0 – GRF 140.4 or GRF 300.0 Statement of Financial Position. The rebate represents the difference between the investment risk capital charge applicable to the value of the eligible collateral or guarantee provided to the insurer and the investment risk capital charge applicable to the asset(s) being supported.
This item is calculated in GRF 130.3 Off Balance Sheet Business - Credit Support Received and represents the sum of ‘Adjustment to Investment Capital Charge’ in ‘Part A - Eligible Collateral Provided to Reporting Insurer’ and ‘Part B - Guarantees or Letter of Credit Provided to Reporting Insurer’.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total investment concentration risk charge for exposures listed in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure represents the item ‘Net concentration risk charge’ calculated in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total investment risk charge for derivative exposures listed in GRF 160.0 Derivatives Activity and Risk Charge. This figure represents the item titled ‘Total Derivatives Activity Risk Charge’ in GRF 160.0 Derivatives Activity and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total concentration risk charge applicable for the reporting insurer. This figure represents the amount disclosed in item ‘Total concentration risk charge’ in GRF 170.0 Concentration Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net outstanding claims provision (OCP) of an insurer is greater than the value determined under Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation (GPS 310). This figure represents the ‘TOTAL’ line item under column 11 headed ‘OCP Insurance risk charge’ in the table titled ‘Part 3: Total’ of GRF 210.0 Outstanding Claims Provision - Insurance Risk Charge. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net premiums liabilities of an insurer is greater than the value determined under GPS 310. This figure represents the ‘TOTAL’ line item under the column 9 headed ‘Premium Liabilities Insurance Risk Charge’ in the table titled ‘Part 3A: GPS 310 Total’ of GRF 210.1 Premium Liabilities - Insurance Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
Report the variation in capital charges in this item with a brief description (no more than 200 characters) and the amount of each variation which has been approved by APRA. A reduction in risk charges resulting from variations has to be reported as a negative number, while any increase needs to be reported as a positive number.
Where a loan to a related party is on non-commercial terms, a 100% capital factor must apply. The difference between the investment risk charge on the loan in GRF 140.3 Investments – Loans and Advances and Risk Charge and the risk charge with a 100% capital factor must be recorded at this item.
Where an insurer uses the internal model-based (IMB) method to determine the MCR in accordance with Prudential Standard GPS 113 Capital Adequacy: Internal Model-based Method, the difference between the MCR determined using the prescribed method and the IMB method should be reported here. During the first two years of using the IMB method, an insurer’s MCR calculated using the IMB method should be at least 90 per cent of the MCR determined using the prescribed method.
The total variation is calculated automatically by the form.
This item is calculated automatically by the form.
Where an insurer is a Category D or E insurer (i.e. captive insurer), the minimum capital requirement (MCR) is calculated as follows:
Where an insurer is in a category other than a Category D or E insurer, the MCR is calculated as follows:
The sum of items 1-4 and 6-11 (as reported in GRF 110.0 Minimum Capital Requirement) less item 5 is calculated as:
Add
Less
This represents the total eligible capital base of the insurer. This amount is calculated in item 3 titled ‘Total Capital Base’ in GRF 120.0 Determination of Capital Base. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ less the amount calculated for item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ divided by the value of item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
This is another way of looking at the solvency coverage and this figure represents the value of item 12 titled ‘Minimum Capital Requirement’ divided by the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’.
This figure will be calculated automatically by the form.
‘Adjusted Net Assets in Australia’ refers to total assets less assets that are excluded as ‘Assets in Australia’ for the purpose of section 28 of the Act.
Item 17.4 Adjusted Net Assets in Australia is determined from the following:
17.1 Net Assets per form GRF 300.0 Statement of Financial Position
The amount reported in item 17.1 ‘Net Assets per form GRF 300.0: Statement of Financial Position’ on GRF 110.0 Minimum Capital Requirement must equal the value of item 25 titled ‘Net Assets’ under the ‘Amount – Inside Australia’ column on GRF 300.0 Statement of Financial Position.
This figure is automatically entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.2 Net insurance liabilities surplus / (deficit) inside Australia after tax effect
Include in this item the value of net outstanding claims liabilities and net AASB 1023 premiums liabilities that are recognised in GRF 300.0 Statement of Financial Position (GRF 300.0), that are in surplus or deficit of the technical provisions required by GPS 310 (i.e. the net outstanding claims provision reported in GRF 210.0 Outstanding Claims Provision – Insurance Risk Charge and the net premiums liabilities reported in GRF 210.1 Premium Liabilities – Insurance Risk Charge). This should be reported for amounts inside Australia only.
This must be calculated as per the following:
Add
Less
Item 2.4.1 of GRF 300.0: Total net amountss recoverable on reinsurance contracts reported in item 2.4, that relate to claims recognised in the calculation of the Outstanding Claims Liability (i.e. other than reinsurance recoveries relating to claims that have been paid) (inside Australia amount)
Item 2.2.2.1 of GRF 300.0: Total net amounts recoverable (other than reinsurance recoveries receivable) that are reported in item 2.2.2 and that relate to claims recognised in the calculation of insurance liabilities that have not been paid - relating to Outstanding Claims Liability (OCL) (inside Australia amount
Item 9 of GRF 300.0. ‘Deferred acquisitions costs’ (inside Australia amount)
Item 8 of GRF 300.0. ‘Deferred reinsurance expense’ (inside Australia amount)
The net value of any other items which form the total of AASB 1023 net premiums liabilities (inside Australia amounts only). This would include:
Deferred reinsurance exchange commission;
Unearned commission revenue; and
Deferred levies and charges.
Add
Less the sum of the outstanding claims provisions net of reinsurance and non reinsurance recoveries as reported in GRF 210.0 per the following:
Less the sum of the premiums liabilities net of expected reinsurance and non reinsurance recoveries as reported in GRF 210.1 per the following:
Add
Deferred reinsurance expense for future business not yet written
Include in this item the amount of the total deferred reinsurance expense reported at item 8 on GRF 300.0 that relates to business that has not yet been written and is the amount inside Australia. This amount represents the cover that an insurer has under a particular reinsurance contract which is available for future business written up to the end of the reinsurance contract. Amounts must not be included in this item where the underlying reinsurance arrangement does not comply with the threshold levels of reinsurance documentation set out in GPS 112 or the governing law requirements set out in GPS 230.
Less
Tax effect of net OCP and Premiums liabilities in surplus / deficit in excess of the liability valuation required under GPS 310
Any surplus / deficit of technical provisions must be adjusted for the tax effect (i.e. the corporate tax rate multiplied by the net amount).
17.3 Net assets in Australia (before deductions)
This amount is calculated automatically by the form as follows:
Add:
Less:
Assets specifically excluded from being considered inside Australia by Prudential Standard GPS 120 Assets in Australia.
17.4. Deductions for assets specifically excluded from being considered inside Australia:
17.4.1. Goodwill
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Less:
Plus:
Plus:
The following item from GRF 140.1 Investments – Direct Equity Holdings and Risk Charge (where it includes amounts inside Australia);
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.2 Other intangible assets
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Less:
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.3 Deferred Tax Assets (net of any Deferred Tax Liabilities)
Disclose the value of deferred tax assets (net of any deferred tax liabilities) recognised in GRF 300.0 Statement of Financial Position.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The amount entered in this field must be either positive or zero, if the result of the netting calculation is a negative, enter zero.
17.4.4 Surplus in defined benefit superannuation fund
Disclose the value of any surplus, net of deferred tax liabilities, in any defined benefit superannuation fund of which the insurer is an employer-sponsor, unless otherwise approved, in writing, by APRA. Any excluded surplus must reverse any associated deferred tax liability from Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must not be greater than the amount reported in item 6.2 ‘Surplus in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position.
Deferred Tax Liabilities should not be counted twice in 17.2.3 above and in this item.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.5 Deficit in defined benefit superannuation fund
Report the value of any deficit in a defined benefit superannuation fund of which the insurer is an employer-sponsor and that is not already reflected in Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must only include deficits not already disclosed in item 22.2 ‘Deficit in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.6 Holdings of own Tier 1 capital instruments
Disclose the value of holdings of own Tier 1 capital instruments of the insurer.
17.4.7 Net unrealised fair value gains (losses) from changes in the GI's own credit worthiness
This item only applies to general insurers that have designated their own debt instruments at fair value under the fair value option in AASB 139 Financial Instruments: Recognition and Measurement.
Deduct/(add back) any unrealised fair value gains/(losses) included in Tier 1 capital (before deductions) arising from changes in the reporting general insurer’s own credit worthiness (e.g. reduction in fair value of the general insurer’s outstanding debt due to change in credit rating).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.8 Net unrealised gains (losses) on effective cash flow hedges
Disclose the value of cumulative fair value gains and losses on effective cash flow hedges reflected in retained earnings or reserves included in Tier 1 capital that do not offset gains or losses on revaluations in reserves included in Tier 1 capital. Deduct the gains on hedges and add back the losses.
17.4.9 Reinsurance assets related to reinsurance contracts that do not meet the reinsurance documentation test
The figure for reinsurance assets relates to reinsurance contracts that do not meet the reinsurance documentation test. This represents the value of item 1.8 plus item 2.4 plus item 3.6 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the asset is deemed not inside Australia.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.10 Reinsurance assets receivable under reinsurance contracts that do not meet governing law requirements
Report all reinsurance assets receivable under each reinsurance contract entered into by the insurer incepting on or after 31 December 2008 that do not meet the requirements of paragraph 31 of Prudential Standard GPS 230 Reinsurance Management.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement. The amount should represent the value of item 1.9 plus item 2.5 plus item 3.7 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the insurer has reinsurance assets that are deemed not inside Australia.
17.4.11 Expected dividends
Report the amount of dividends which are expected, but not declared or paid.
17.4.12 Other deductions
Disclose other deductions as required under GPS 112, such as:
Disclose deficit after taking into account adjustments in the amount available in the respective revaluation reserves for the following items, to the extent not already accounted for in current year earnings or retained earnings:
Property not held at fair value;
Investments in subsidiaries not held at fair value; or
Investment in associates, including any excess of the share of losses in associates under equity accounting.
Identified impairment of certain assets
Disclose any identified impairment of an asset where the impairment has not already been taken into account in profit or loss or the impairment has been incorporated in fair value changes captured in an asset revaluation reserve included in Upper Tier 2 capital. This will include the value of any deficit in asset revaluation reserves included in Upper Tier 2 capital after taking into account all adjustments.
Disclose the value of own holdings of Upper Tier 2 capital instruments.
Disclose the value of own holdings of Lower Tier 2 capital instruments.
17.4.13 Variation in deduction by other adjustments approved by APRA
Include any additions or reduction in deductions that have been approved by APRA.
17.5 Assets under a fixed or floating charge, mortgage or other security to the extent of the indebtedness secured by such assets.
Such assets are excluded from being considered inside Australia up to the value of the charge/encumbrance. Where the charge over the assets is only given to support the value of insurance liabilities of the insurer, only the excess of the value of the assets charged/encumbered, over the value of the insurance liabilities, is excluded from being considered inside Australia.
This amount represents the total of all items reported in column headed ‘Excess of Charge Assets over Liabilities Supported’ in GRF 130.2 Off Balance Sheet Business - Charges Granted and Risk Charge.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.6 Adjusted Net Assets in Australia
This amount is calculated automatically by the form.
The form reports in Australian currency rounded in thousands of dollars (no decimal place). Ratios are expressed to 2 decimal places.
Insurers are required to report the information in the reporting form on a quarterly and annual basis.
This form must be lodged for each of the reporting units within the number of business days after the end of the quarter as set out in Reporting Standard GRS 110.0 Minimum Capital Requirement.
Specific instructions
The different categories of insurers are defined in Prudential Standard GPS 001 Definitions. Insurers are required to select the category which best describes their status.
Note: Category C insurers (foreign insurers operating as a foreign branches in Australia) are required to complete the reporting form for branches.
This represents the total capital charge applicable for the credit substitutes provided by the reporting insurer. This amount is calculated in item 14 ‘TOTAL Off balance sheet required risk charge’ in GRF 130.0 Off Balance Sheet Business – Credit Substitutes Provided and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total capital charge applicable for the charges and encumbrances granted by the reporting insurer. This amount is calculated in the item titled ‘Adjusted Required Capital Charge’ in GRF 130.2 Off Balance Sheet Business – Charges Granted and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.1. GRF 140.0 Investments - Direct Interest Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct interest holdings of the reporting insurer. This amount is calculated in item 7 ‘Total Investment Risk Charge’ in GRF 140.0 Investments - Direct Interest Rate Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.2. GRF 140.1 Investments - Direct Equity Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct equity holdings of the reporting insurer. This amount is calculated in item 9 ‘Total investment risk charge’ in GRF 140.1 Investments – Direct Equity Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.3. GRF 140.2 Investments - Direct Property Holdings and Risk Charge
This represents the total investment risk charge applicable for the direct property holdings of the reporting insurer. This figure is calculated in column headed ‘Investment Risk Charge’ for line item titled ‘Total direct property investments’ in GRF 140.2 Investments - Direct Property Holdings and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.4. GRF 140.3 Investments - Loans and Advances and Risk Charge
This represents the total investment risk charge applicable for the loans and advances provided by the reporting insurer. This amount is calculated in item 4 ‘Total Investment Risk Charge’ in GRF 140.3 Investments – Loans and Advances and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.5. GRF 140.4 Investments - Indirectly Held by Insurer and Risk Charge
This represents the total investment risk charge applicable for assets that are indirectly held by the reporting insurer. This amount is calculated in item 12 ‘Total Investment Risk Charge’ in GRF 140.4 Investments – Indirectly Held by Insurer and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
3.6. GRF 300.0 Statement of Financial Position
This represents the total investment risk charge for all applicable assets listed in GRF 300.0 Statement of Financial Position. It excludes assets that are subject to a risk charge under the forms GRF 140.0 – 140.4, GRF 150.0, GRF 301.0 and assets that are deducted from the Capital Base.
This figure is automatically entered by the form and represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 13 ‘Total assets’ in GRF 300.0 Statement of Financial Position.
This figure represents the sum of the individual investment risk charges calculated under the column heading ‘Investment Risk Charge’ and is reported for item 4 ‘Net reinsurance assets’ in GRF 301.0 Reinsurance Assets and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The investment risk charge may be reduced where the insurer holds certain types of collateral against an asset, or where an asset has been guaranteed, as a means of reducing risk. Accordingly this item represents the ‘rebate’ of the investment risk charge on these assets that is calculated in either GRF 140.0 – GRF 140.4 or GRF 300.0 Statement of Financial Position. The rebate represents the difference between the investment risk capital charge applicable to the value of the eligible collateral or guarantee provided to the insurer and the investment risk capital charge applicable to the asset(s) being supported.
This item is calculated in GRF 130.3 Off Balance Sheet Business - Credit Support Received and represents the sum of ‘Adjustment to Investment Capital Charge’ in ‘Part A - Eligible Collateral Provided to Reporting Insurer’ and ‘Part B - Guarantees or Letter of Credit Provided to Reporting Insurer’.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total investment concentration risk charge for exposures listed in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure represents the item ‘Net concentration risk charge’ calculated in GRF 150.0 Asset Exposure Concentrations and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total investment risk charge for derivative exposures listed in GRF 160.0 Derivatives Activity and Risk Charge. This figure represents the item titled ‘Total Derivatives Activity Risk Charge’ in GRF 160.0 Derivatives Activity and Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total concentration risk charge applicable for the reporting insurer. This figure represents the amount disclosed in item ‘Total concentration risk charge’ in GRF 170.0 Concentration Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net outstanding claims provision (OCP) of an insurer is greater than the value determined under Prudential Standard GPS 310 Audit and Actuarial Reporting and Valuation (GPS 310). This figure represents the ‘TOTAL’ line item under column 11 headed ‘OCP Insurance risk charge’ in the table titled ‘Part 3: Total’ of GRF 210.0 Outstanding Claims Provision - Insurance Risk Charge. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This represents the total insurance risk charge applicable in response to the risk that the true value of the net premiums liabilities of an insurer is greater than the value determined under GPS 310. This figure represents the ‘TOTAL’ line item under the column 9 headed ‘Premium Liabilities Insurance Risk Charge’ in the table titled ‘Part 3A: GPS 310 Total’ of GRF 210.1 Premium Liabilities - Insurance Risk Charge. This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
Report the variation in capital charges in this item with a brief description (no more than 200 characters) and the amount of each variation which has been approved by APRA. A reduction in risk charges resulting from variations has to be reported as a negative number, while any increase needs to be reported as a positive number.
Where a loan to a related party is on non-commercial terms, a 100% capital factor must apply. The difference between the investment risk charge on the loan in GRF 140.3 Investments – Loans and Advances and Risk Charge and the risk charge with a 100% capital factor must be recorded at this item.
Where an insurer uses the internal model-based (IMB) method to determine the MCR in accordance with Prudential Standard GPS 113 Capital Adequacy: Internal Model-based Method, the difference between the MCR determined using the prescribed method and the IMB method should be reported here. During the first two years of using the IMB method, an insurer’s MCR calculated using the IMB method should be at least 90 per cent of the MCR determined using the prescribed method.
The total variation is calculated automatically by the form.
This item is calculated automatically by the form.
Where an insurer is a Category D or E insurer (i.e. captive insurer), the minimum capital requirement (MCR) is calculated as follows:
Where an insurer is in a category other than a Category D or E insurer, the MCR is calculated as follows:
The sum of items 1-4 and 6-11 (as reported in GRF 110.0 Minimum Capital Requirement) less item 5 is calculated as:
Add
Less
This represents the total eligible capital base of the insurer. This amount is calculated in item 3 titled ‘Total Capital Base’ in GRF 120.0 Determination of Capital Base. This figure is automatically entered by the form into this data field in GRF 110.0 Minimum Capital Requirement.
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ less the amount calculated for item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
This figure represents the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’ divided by the value of item 12 titled ‘Minimum Capital Requirement’.
This figure will be calculated automatically by the form.
This is another way of looking at the solvency coverage and this figure represents the value of item 12 titled ‘Minimum Capital Requirement’ divided by the value of item 13 titled ‘GRF 120.0 Determination of Capital Base’.
This figure will be calculated automatically by the form.
‘Adjusted Net Assets in Australia’ refers to total assets less assets that are excluded as ‘Assets in Australia’ for the purpose of section 28 of the Act.
Item 17.4 Adjusted Net Assets in Australia is determined from the following:
17.1 Net Assets per form GRF 300.0 Statement of Financial Position
The amount reported in item 17.1 ‘Net Assets per form GRF 300.0: Statement of Financial Position’ on GRF 110.0 Minimum Capital Requirement must equal the value of item 25 titled ‘Net Assets’ under the ‘Amount – Inside Australia’ column on GRF 300.0 Statement of Financial Position.
This figure is automatically entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.2 Net insurance liabilities surplus / (deficit) inside Australia after tax effect
Include in this item the value of net outstanding claims liabilities and net AASB 1023 premiums liabilities that are recognised in GRF 300.0 Statement of Financial Position (GRF 300.0), that are in surplus or deficit of the technical provisions required by GPS 310 (i.e. the net outstanding claims provision reported in GRF 210.0 Outstanding Claims Provision – Insurance Risk Charge and the net premiums liabilities reported in GRF 210.1 Premium Liabilities – Insurance Risk Charge). This should be reported for amounts inside Australia only.
This must be calculated as per the following:
Add
Less
Item 2.4.1 of GRF 300.0: Total net amountss recoverable on reinsurance contracts reported in item 2.4, that relate to claims recognised in the calculation of the Outstanding Claims Liability (i.e. other than reinsurance recoveries relating to claims that have been paid) (inside Australia amount)
Item 2.2.2.1 of GRF 300.0: Total net amounts recoverable (other than reinsurance recoveries receivable) that are reported in item 2.2.2 and that relate to claims recognised in the calculation of insurance liabilities that have not been paid - relating to Outstanding Claims Liability (OCL) (inside Australia amount
Item 9 of GRF 300.0. ‘Deferred acquisitions costs’ (inside Australia amount)
Item 8 of GRF 300.0. ‘Deferred reinsurance expense’ (inside Australia amount)
The net value of any other items which form the total of AASB 1023 net premiums liabilities (inside Australia amounts only). This would include:
Deferred reinsurance exchange commission;
Unearned commission revenue; and
Deferred levies and charges.
Add
Less the sum of the outstanding claims provisions net of reinsurance and non reinsurance recoveries as reported in GRF 210.0 per the following:
Less the sum of the premiums liabilities net of expected reinsurance and non reinsurance recoveries as reported in GRF 210.1 per the following:
Add
Deferred reinsurance expense for future business not yet written
Include in this item the amount of the total deferred reinsurance expense reported at item 8 on GRF 300.0 that relates to business that has not yet been written and is the amount inside Australia. This amount represents the cover that an insurer has under a particular reinsurance contract which is available for future business written up to the end of the reinsurance contract. Amounts must not be included in this item where the underlying reinsurance arrangement does not comply with the threshold levels of reinsurance documentation set out in GPS 112 or the governing law requirements set out in GPS 230.
Less
Tax effect of net OCP and Premiums liabilities in surplus / deficit in excess of the liability valuation required under GPS 310
Any surplus / deficit of technical provisions must be adjusted for the tax effect (i.e. the corporate tax rate multiplied by the net amount).
17.3 Net assets in Australia (before deductions)
This amount is calculated automatically by the form as follows:
Add:
Less:
Assets specifically excluded from being considered inside Australia by Prudential Standard GPS 120 Assets in Australia.
17.4. Deductions for assets specifically excluded from being considered inside Australia:
17.4.1. Goodwill
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Less:
Plus:
Plus:
The following item from GRF 140.1 Investments – Direct Equity Holdings and Risk Charge (where it includes amounts inside Australia);
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.2 Other intangible assets
This figure represents the value of the following items from GRF 300.0 Statement of Financial Position;
Less:
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.3 Deferred Tax Assets (net of any Deferred Tax Liabilities)
Disclose the value of deferred tax assets (net of any deferred tax liabilities) recognised in GRF 300.0 Statement of Financial Position.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
The amount entered in this field must be either positive or zero, if the result of the netting calculation is a negative, enter zero.
17.4.4 Surplus in defined benefit superannuation fund
Disclose the value of any surplus, net of deferred tax liabilities, in any defined benefit superannuation fund of which the insurer is an employer-sponsor, unless otherwise approved, in writing, by APRA. Any excluded surplus must reverse any associated deferred tax liability from Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must not be greater than the amount reported in item 6.2 ‘Surplus in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position.
Deferred Tax Liabilities should not be counted twice in 17.2.3 above and in this item.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.5 Deficit in defined benefit superannuation fund
Report the value of any deficit in a defined benefit superannuation fund of which the insurer is an employer-sponsor and that is not already reflected in Tier 1 capital.
The amount reported in GRF 110.0 Minimum Capital Requirement must only include deficits not already disclosed in item 22.2 ‘Deficit in defined benefit superannuation fund’ of GRF 300.0 Statement of Financial Position).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.6 Holdings of own Tier 1 capital instruments
Disclose the value of holdings of own Tier 1 capital instruments of the insurer.
17.4.7 Net unrealised fair value gains (losses) from changes in the GI's own credit worthiness
This item only applies to general insurers that have designated their own debt instruments at fair value under the fair value option in AASB 139 Financial Instruments: Recognition and Measurement.
Deduct/(add back) any unrealised fair value gains/(losses) included in Tier 1 capital (before deductions) arising from changes in the reporting general insurer’s own credit worthiness (e.g. reduction in fair value of the general insurer’s outstanding debt due to change in credit rating).
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.8 Net unrealised gains (losses) on effective cash flow hedges
Disclose the value of cumulative fair value gains and losses on effective cash flow hedges reflected in retained earnings or reserves included in Tier 1 capital that do not offset gains or losses on revaluations in reserves included in Tier 1 capital. Deduct the gains on hedges and add back the losses.
17.4.9 Reinsurance assets related to reinsurance contracts that do not meet the reinsurance documentation test
The figure for reinsurance assets relates to reinsurance contracts that do not meet the reinsurance documentation test. This represents the value of item 1.8 plus item 2.4 plus item 3.6 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the asset is deemed not inside Australia.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.4.10 Reinsurance assets receivable under reinsurance contracts that do not meet governing law requirements
Report all reinsurance assets receivable under each reinsurance contract entered into by the insurer incepting on or after 31 December 2008 that do not meet the requirements of paragraph 31 of Prudential Standard GPS 230 Reinsurance Management.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement. The amount should represent the value of item 1.9 plus item 2.5 plus item 3.7 recognised in GRF 301.0 Reinsurance Assets and Risk Charge, to the extent that it is deemed inside Australia. It is possible that the sum of the amounts reported in GRF 301.0 Reinsurance Assets and Risk Charge may not equate to the amount reported in this data field where the insurer has reinsurance assets that are deemed not inside Australia.
17.4.11 Expected dividends
Report the amount of dividends which are expected, but not declared or paid.
17.4.12 Other deductions
Disclose other deductions as required under GPS 112, such as:
Disclose deficit after taking into account adjustments in the amount available in the respective revaluation reserves for the following items, to the extent not already accounted for in current year earnings or retained earnings:
Property not held at fair value;
Investments in subsidiaries not held at fair value; or
Investment in associates, including any excess of the share of losses in associates under equity accounting.
Identified impairment of certain assets
Disclose any identified impairment of an asset where the impairment has not already been taken into account in profit or loss or the impairment has been incorporated in fair value changes captured in an asset revaluation reserve included in Upper Tier 2 capital. This will include the value of any deficit in asset revaluation reserves included in Upper Tier 2 capital after taking into account all adjustments.
Disclose the value of own holdings of Upper Tier 2 capital instruments.
Disclose the value of own holdings of Lower Tier 2 capital instruments.
17.4.13 Variation in deduction by other adjustments approved by APRA
Include any additions or reduction in deductions that have been approved by APRA.
17.5 Assets under a fixed or floating charge, mortgage or other security to the extent of the indebtedness secured by such assets.
Such assets are excluded from being considered inside Australia up to the value of the charge/encumbrance. Where the charge over the assets is only given to support the value of insurance liabilities of the insurer, only the excess of the value of the assets charged/encumbered, over the value of the insurance liabilities, is excluded from being considered inside Australia.
This amount represents the total of all items reported in column headed ‘Excess of Charge Assets over Liabilities Supported’ in GRF 130.2 Off Balance Sheet Business - Charges Granted and Risk Charge.
This figure needs to be manually entered into this data field in GRF 110.0 Minimum Capital Requirement.
17.6 Adjusted Net Assets in Australia
This amount is calculated automatically by the form.
Introduction
GRF 110.0 Minimum Capital Requirement reports the summary of the risk charges, Minimum Capital Requirement (MCR), the capital base, net assets in Australia, and compliance with the capital requirements as prescribed in the ‘capital standards’[3].
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Schedule
Reporting Standard GRS 110.0 (2010) Minimum Capital Requirement comprises the 39 pages commencing on the next page.
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act). It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, in relation to their Minimum Capital Requirement.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer, other than a foreign insurer, must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Licensed Insurer’ for each reporting period.
A foreign insurer must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Branch Insurer’ for each reporting period.
(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or
(b) by manually completing Form GRF 110.0 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.
Where the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).
Note: The ‘Direct to APRA’ application software and paper forms may be obtained from APRA.
Reporting periods and due dates
(a) in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and
(b) in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.
Note: The annual information required from an insurer by paragraph 3 or 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act). This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.
(a) more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or
(b) less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).
(a) in the case of the quarterly information referred to in subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and
(b) in the case of the annual information referred to in subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.
Note: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certificate required under subsection 49J(3) of that Act must be lodged with APRA in accordance with the prudential standards. The prudential standards provide that the certificate must be submitted to APRA together with the yearly statutory accounts. Accordingly, the auditor’s certificate relating to the annual information referred to in subparagraph 6(b) must be provided to APRA by the time specified in subparagraph 8(b) of this reporting standard (unless an extension is granted under paragraph 9).
The information provided by an insurer under this reporting standard must be the product of processes and controls that have been reviewed and tested by the appointed auditor of the insurer. This will require the auditor to review and test the systems, processes and controls supporting the reporting of the information to ensure that they produce accurate data and are otherwise reliable. This review and testing must be done on an annual basis or more frequently if necessary to enable the appointed auditor to form an opinion on the accuracy and reliability of the data.
The information provided by an insurer under this reporting standard must be subject to processes and controls developed by the insurer for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the insurer to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
(a) under subparagraph 5(a), the officer must digitally sign, authorise and encrypt the information (for which purpose APRA’s certificate authority will issue digital certificates, for use with the ‘Direct to APRA’ application, to officers of the insurer who have authority from the insurer to transmit data to APRA); or
(b) under subparagraph 5(b), the completed form must be signed in accordance with paragraph 14.
(a) obtain from the agent a paper copy of the completed form as provided to APRA (under either subparagraph 5(a) or (b)); and
(b) cause the paper copy to be signed in accordance with paragraph 14; and
(c) lodge the signed paper copy with APRA by mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales, by the relevant due date (unless APRA, in writing, waives the requirement in relation to the insurer to lodge the signed paper copy with APRA).
Note: APRA may, for example, decide to waive the requirement under subparagraph 13(c) where an insurer has undertaken to retain the signed copy of the completed form for an agreed period of time.
(a) the Principal Executive Officer of the insurer; or
(b) the Chief Financial Officer of the insurer (whatever his or her official title may be).
APRA may make minor variations to the instructions to a form, to clarify their application to the form provided it does not involve changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify insurers of this in writing.
Transition
Interpretation
appointed auditor means an auditor appointed under paragraph 39(1)(a) of the Insurance Act;
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays;
capital standards means the prudential standards which relate to capital adequacy as defined in Prudential Standard GPS 001 Definitions;
foreign insurer means a foreign general insurer within the meaning of the Insurance Act;
Note: A reference to a ‘branch’ or ‘branch operation’ is a reference to the Australian operations of a foreign insurer.
Insurance Act means the Insurance Act 1973;
insurer means a general insurer within the meaning of the Insurance Act;
Note: In the forms and instructions, a reference to an ‘authorised insurer’, ‘authorised insurance entity’ or ‘licensed insurer’ is a reference to an insurer, and a reference to an ‘authorised reinsurance entity’ is a reference to an insurer whose business consists only of undertaking liability by way of reinsurance.
Principal Executive Officer means the principal executive officer of the insurer for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the insurer;
reporting period means a period mentioned in subparagraph 6(a) or (b) or, if appropriate, paragraph 7.
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (the Collection of Data Act). It requires general insurers (insurers), including foreign general insurers operating in Australia through branch operations (foreign insurers), to report to APRA, generally on a quarterly and annual basis, in relation to their Minimum Capital Requirement.
This reporting standard outlines the overall requirements for the provision of this information to APRA. It should be read in conjunction with:
An insurer, other than a foreign insurer, must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Licensed Insurer’ for each reporting period.
A foreign insurer must provide APRA with the information required by the version of Form GRF 110.0 designated for a ‘Branch Insurer’ for each reporting period.
(a) in electronic form using the ‘Direct to APRA’ application, applying one of the electronic submission mechanisms under that application; or
(b) by manually completing Form GRF 110.0 on paper and mailing the completed form to APRA’s head office at Level 26, 400 George Street, Sydney, New South Wales.
Where the information is submitted by means of an agent to whom the insurer has outsourced the function of providing the information on the insurer’s behalf, the agent may only provide the information in accordance with subparagraph 5(b) if the agent has contacted APRA and advised that the agent cannot submit the information in electronic form under subparagraph 5(a).
Note: The ‘Direct to APRA’ application software and paper forms may be obtained from APRA.
Reporting periods and due dates
(a) in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the insurer; and
(b) in respect of each financial year (within the meaning of the Corporations Act 2001) of the insurer.
Note: The annual information required from an insurer by paragraph 3 or 4 read with subparagraph 6(b), together with certain annual information required by other reporting standards, will form part of the insurer’s yearly statutory accounts within the meaning of section 3 of the Insurance Act 1973 (the Insurance Act). This means that the information must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act. Under subsection 49J(3), the auditor must give the insurer a certificate relating to the yearly statutory accounts, and that certificate must contain statements of the auditor’s opinions on the matters required by the prudential standards to be dealt with in the certificate.
(a) more frequently (if, having regard to the particular circumstances of the insurer, APRA considers it necessary or desirable to obtain information more frequently for the purposes of the prudential supervision of the insurer); or
(b) less frequently (if, having regard to the particular circumstances of the insurer and the extent to which it requires prudential supervision, APRA considers it unnecessary to require the insurer to provide the information as frequently as provided by subparagraph 6(a) or (b)).
(a) in the case of the quarterly information referred to in subparagraph 6(a) – 20 business days after the end of the reporting period to which the information relates; and
(b) in the case of the annual information referred to in subparagraph 6(b) – 4 months after the end of the reporting period to which the information relates.
Note: Paragraph 49L(1)(a) of the Insurance Act provides that the auditor’s certifi
This is an opening excerpt, not the complete document.