IntroductionIntroduction

Introduction

This instruction guide is designed to assist in the completion of GRF 210.0A_G Outstanding Claims Liability – Insurance Risk Charge – Australia by class of business (Level 2 Insurance Group) (GRF 210.0A_G).

The form can be used to calculate the insurance risk capital charge associated with the Level 2 insurance group’s Outstanding Claims Liability in accordance with Prudential Standard GPS 111 Capital Adequacy: Level 2 Insurance Groups (GPS 111).

Audit requirements

The annual return of GRF 210.0A_G required under paragraphs 3(a) and 5(c) of Reporting Standard GRS 210.0_G Outstanding Claims Liability – Insurance Risk Charge (Level 2 Insurance Group) (GRS 210.0_G) must be subject to a limited assurance[1] review by the Group Auditor (see Prudential Standard GPS 311 Audit and Actuarial Reporting and Valuation: Level 2 Insurance Groups (GPS 311)).

The Group Auditor must prepare a review report on the basis of a limited assurance engagement in accordance with the requirements of GPS 311. Assurance in the review report will be provided in the form of negative assurance. To express negative assurance in the review report, the auditor will use limited procedures to obtain sufficient appropriate evidence. Enquiries of the Level 2 insurance group’s staff and analytical procedures will be the primary tools used to obtain evidence. These procedures will not provide all the evidence that would be required in an audit.

The scope and nature of audit testing required is outlined in the Standard on Assurance Engagement ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the Auditing and Assurance Standards Board.

Reporting entities

GRF 210.0A_G is to be completed by the parent entity of a Level 2 insurance group as defined in Prudential Standard GPS 001 Definitions (GPS 001) where the Level 2 insurance group does not have a reporting adjustment under paragraph 3(b) of GRS 210.0_G to report on an ‘Australia by region’ rather than ‘Australia by class of business’ basis. If the Level 2 insurance group has a reporting adjustment under paragraph 3(b) of GRS 210.0_G, it must complete GRF 210.0B_G Outstanding Claims Liability – Insurance Risk Charge – Australia by region (Level 2 Insurance Group) (GRF 210.0B_G).

Consolidation at Level 2 should cover the Level 2 insurance group as defined under GPS 001.

Definitions

For Australian business[2], report insurance business as per APRA-authorised insurer reporting. For international business[3], only report insurance business deemed to be general insurance business.[4] For prudential reporting purposes ‘Level 1 Insurer’ is as defined in GPS 001.