1All Statutory Fund Products

Section 1 All Statutory Fund Products

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

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

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

For each APRA Product Group, two iterations of reporting are required to capture the breakdown of sources of profit between Policy Owners and Shareholders. This is controlled by the drop-down box titled Profit Allocation.

1.1. Life Insurance Act Operating Profit After Income Tax:

While there is no specific data to be entered directly against this major heading, it introduces the basis of Profit for this form as Operating Profit which is specifically defined in the Life Insurance Act 1995 – refer Division 5 of Part 4 (Sections 56-60) for life insurers other than Friendly Societies. A simpler regime, which is still catered for in this return, applies to a friendly society.

The quantum of total profit for the period, for which the sources listed in this form are required to be reported, is determined in LRF 340.1 Retained Profits (SF and SF Eliminations), at Item 2.6.

Column 1 Investment earnings on assets in excess of policy liabilities

Assets in excess of policy liabilities are intended to be accommodated in APRA Product Groups L11 (Policy Owners’ Retained Profits) and L12 (Shareholders’ Capital & Retained Profits) for life insurers; and F7 (Unallocated Benefit Fund Reserves) and F8 (Members’ Capital & Retained Profits) for friendly societies. Include investment revenue of these groups for the period; earnings are to be reported net of relevant investment expenses.

Column 2 Profit margins emerging

This is profit arising in the period from applying the Profit Margin(s) determined at the beginning of the period to the expected value of the Profit Carrier(s) on the basis of Best Estimate Assumptions at the beginning of the period.

Columns 3 – 12 Components of Experience Profit or Loss -

The total Experience Profit or Loss is the profit or loss arising in the period from differences between the actual experience during the period and the expected experience on the basis of the Best Estimate Assumptions at the beginning of the period.

The total Experience Profit or Loss is to be broken down into the components arising in respect of applicable categories from the following items:

Column 3 Acquisition Expenses

The fixed and variable expenses of the company to the extent they are, either directly or indirectly, referable to those activities of the company related to the acquiring of that new business expected to derive from the expenditure.