Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 23 of 2009 - GRS 210.1_G (2009) - Premiums Liabilities - Insurance Risk Charge.
GRF 210.1_G Premiums Liabilities – Insurance Risk Charge (Level 2 Insurance Group) is comprised of the following.
Part A: Premiums Liabilities – GPS 310 basis;
Part B: Premiums Liabilities – AASB Basis; and
Part C: Total Premiums Liabilities.
The aggregate value of premiums liabilities for the Level 2 insurance group will be reported in ‘Part C: Total Premiums Liabilities’
Actuarial services
If actuarial services were used to complete this form input ‘Yes’, otherwise input ‘No’.
Basis of preparation
Select, from the drop down list, the basis by which premiums liabilities are reported in this form. The options provided are:
GPS 310 basis;
AASB Basis; or
Combination of GPS 310 and AASB basis.
Classes of insurance business
Level 2 insurance groups are required to report financial data on both Australian business[10] and international business[11].
Diversification will be the primary adjustment made on a group basis that affects the insurance risk capital charge and should be recognised in the risk margin for each class of business. The totals at the end of the form, in Part C, may take into account other group adjustments.
Australian business
For Part A (Premiums Liabilities – GPS 310 basis), Australian business is to be reported by class in;
table 1: Direct business; and
table 3: Reinsurance business.
A Level 2 insurance group may apply to APRA for a determination to report Australian business as a single region.
A Level 2 insurance group must not report Australian business in table 2 or table 4 unless a determination has been made by APRA to report Australian business as a single region.
Where APRA has made a determination to report Australian business as a single region, a Level 2 insurance group must (for the business to which the determination relates):
report Australian direct business in table 2;
report Australian reinsurance business in table 4; and
not report Australian business in table 1 or table 3.
Division Specific instructions - Financial Sector (Collection of Data) (reporting standard) determination No. 23 of 2009 - GRS 210.1_G (2009) - Premiums Liabilities - Insurance Risk Charge - Specific instructions | Zoe
Where a Level 2 insurance group reports premiums liabilities using equivalent accounting entries under Part B (Premiums Liabilities – AASB basis), which requires APRA approval, Australian business is to be reported by class in;
table 5: Direct business; and
table 7: Reinsurance business
A Level 2 insurance group must not report Australian business in table 6 or table 8 unless a determination has been made by APRA to report Australian business as a single region.
Where APRA has made a determination to report Australian business as a single region, a Level 2 insurance group must (for the business to which the determination relates):
report Australian direct business in table 6;
report Australian reinsurance business in table 8; and
not report Australian business in table 5 or table 7.
International business
For international regions, class of business data is not reported in this form. Level 2 insurance groups, however, will be required to map their international business to the Australian classes of business in order to assign an insurance risk capital charge. Unless otherwise instructed by APRA, Level 2 insurance groups are to supply details of this mapping and the calculation of the insurance risk capital charge for international business as supplementary information to this form. This information is to be supplied to the Level 2 insurance group’s APRA Responsible Supervisor. Unless instructed otherwise, the reporting supplement is to accompany the submission of this form.
International business[12] is to be reported according to the regions specified in this form. Level 2 insurance groups are required to report according to the regions which most appropriately reflects the business and/or operational segments of the group. International business should not be reported under the ‘Australia’ region.
However, all insurance business written by Level 1 insurers is deemed to be Australian business. This treatment is different to the requirements of AASB 1023 ‘General Insurance Contracts’. Once regions are defined, they should generally be maintained thereafter for consistency. However, this does not prevent the Level 2 insurance group from altering its reporting regions where necessary, provided APRA is notified of any changes.
The form allows reporting for the following regions:
New Zealand;
South East Asia;
Asia Pacific;
USA
Americas;
UK/Europe; and
Other.
The sum of the classes of business for each international country and region is to be entered into the form separated according to whether the premiums liabilities relate to:
direct business; or
reinsurance business.
Direct business (Australian business by class)
The following direct classes of business relate to column ‘1’ in table 1 and table 5. The classes of Australian business for Level 2 insurance groups are as follows:
(I). Houseowners/Householders (H & H)
This class covers the common H & H policies inclusive of:
Contents;
Personal property;
Arson; and
Burglary.
Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).
(II). Commercial Motor Vehicle
Motor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.
(III). Domestic Motor Vehicle
Motor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.
(IV). Travel
Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.