Part B: Premiums liabilities — AASB BasiPart B: Premiums liabilities — AASB Basis

Part B: Premiums liabilities – AASB Basis

The instructions below relate to tables 5 to 8 (including the ‘Totals’ table in Part A) and are set out by column.

Under GPS 311, Level 2 insurance groups may value premiums liabilities for international business on an AASB basis using accounting entries. These are to be reported in ‘Part B: Premiums Liabilities – AASB Basis’. A Level 2 insurance group may apply to APRA, under paragraph 41 of GPS 311, for a determination to enable premiums liabilities on Australian business to be reported using accounting entries. Where APRA has made such a determination, these are to be reported in part B of this form.

Note: Diversification adjustments must not be included when reporting the value of premiums liabilities in ‘Part B: Premiums Liabilities – AASB Basis’. However, Level 2 insurance groups may allow for diversification adjustments when determining the threshold levels for any liability adequacy tests applied in part B of this form.

Unearned premium (2)

Report the unearned premium liability as at the end of the reporting period.

Deferred acquisition costs (3)

Report the value of deferred acquisition costs as at the end of the reporting period.

AASB Gross premiums liabilities (UPP – DAC) (4)

This item is automatically calculated by the form as:

• Item 2 ‘Unearned Premium’; less
• Item 3 ’Deferred acquisition costs’.

Deferred reinsurance expense (Current policies) (5)

Report the value of deferred reinsurance expense relating to current policies. This will exclude deferred reinsurance expense on future business not yet written or recognised.

Unexpired risk liability (6)

Report the value of any unexpired risk liability as a result of the application of the liability adequacy test required under AASB 1023 ‘General Insurance Contracts’. This liability adequacy test may be different from the liability adequacy test required in accordance with GPS 311. Where the test applied under AASB 1023 ‘General Insurance Contracts’ is identical to that required under GPS 311, there will be no recognition of a deduction of excess technical provisions as set out below.

AASB Net premiums liabilities (7)

The net premiums liabilities are calculated as:

• Item 4 ‘AASB Gross Premium Liabilities (UPP – DAC)’; less
• Item 5 ‘Deferred Reinsurance Expenses (Current Policies)’; add
• Item 6 ‘Unexpired risk liability’.

Do not enter a value as this is automatically calculated by the form.

Technical provision deficiency (8)