Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2011 - GRS 300.0_G (2011) - Statement of Financial Position (Level 2 Insurance Group)
International businessInternational business
Start here
Get a plain-English read of International business
Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2011 - GRS 300.0_G (2011) - Statement of Financial Position (Level 2 Insurance Group).
International business
Level 2 insurance groups are required to report financial data on both Australian and international exposures as defined in this form. ‘Australian Business’ is as defined in GPS 001 and means insurance business carried on by any Level 1 insurer within a Level 2 insurance group. ‘International Business’[2] is insurance business carried on by an entity within the group that is not authorised under the Insurance Act 1973.[3] For the purposes of prudential reporting, all insurance business written by Level 1 insurers[4] is deemed to be Australian business. This treatment is different to the requirements of Australian accounting standards and AASB 1023
.
For prudential reporting purposes ‘Level 1 Insurer’ is as defined in GPS 001.
For entities which are not insurers within the Level 2 insurance group, items should be reported as:
- “Australian business” when they relate to an entity incorporated in Australia; and
- “International business” where they related to an entity incorporated outside of Australia.
Capturing information that distinguishes between ‘Australian business’ and aggregated ‘international business’, will ensure APRA receives enough data to enable it to effectively assess the capital adequacy and financial performance of the entire group. This form captures the total of the international exposures across all regions for each line item. This includes any cash or investments from international business as well as outstanding claims liabilities and premiums liabilities from international business.
Tax Effect Accounting/Adjustments
The treatment of tax effect accounting items in this form must be in accordance with the treatment adopted under Australian accounting standards.
Definition of insurance business
For Australian business, report insurance business as per APRA-authorised insurer reporting. For international business, only report insurance business deemed to be general insurance business.
Limited Risk Transfer Arrangements
For Australian business a Limited Risk Transfer Arrangement that is approved by APRA as a reinsurance arrangement must be treated accordingly by the Level 2 insurance group for prudential purposes. A Limited Risk Transfer Arrangement that is approved by APRA must be accounted for by the Level 2 insurance group so that the arrangement will not misrepresent, or is not designed to disguise, a material risk to the Level 2 insurance group’s current or continuing profitability, solvency or capital adequacy from any party.
The terms and conditions of the financing arrangement will determine the appropriate accounting treatment for prudential purposes.