Financial Sector (Collection of Data) (reporting standard) determination No. 71 of 2023

This Reporting Standard prescribes the data and process requirements that general insurers must use when reporting to APRA on the Insurance Risk Charge that relates to premiums liabilities. Mechanically, it (1) requires periodic submission of a specified data table (Table 1: Premiums Liabilities - Insurance Risk Charge) for each quarter and each financial year (para 6); (2) specifies the electronic methods and authorisation formalities for submission, including digital signing (paras 5, 12); (3) prescribes the definitions and component line items to be reported (definition and tables in the body and Table 1); (4) requires that reported information be produced under systems, processes and controls reviewed and tested by the Appointed Auditor on at least an annual, limited assurance basis (paras 10-11); and (5) sets timing rules for quarterly and annual returns (para 8), transitional arrangements for reporting under the prior standard (para 16) and APRA powers to vary frequency, form and content for an individual insurer (paras 7, 15).

The standard is made under the Financial Sector (Collection of Data) Act 2001 (para 1) and applies to all general insurers authorised under the Insurance Act 1973, for reporting periods ending on or after 1 July 2023 (para 3). It must be read with GRS 001 Reporting Requirements, Prudential Standard GPS 115 Capital Adequacy: Insurance Risk Charge and Prudential Standard GPS 340 Insurance Liability Valuation (para 1, para 2 note).

The official purpose-statement is that APRA will use the information “for the purpose of prudential supervision including assessing compliance with the capital standards” (para 2). That is the stated rationale; the Standard operationalises that purpose by defining the exact data fields, the classes of business and the measurement rules APRA expects, including interaction with GPS 340 for premiums liabilities and GPS 115 for capital factors (see the definitions and Table 1 instructions).

Costs and incentive effects that follow from the instrument are embedded in its mechanics. Insurers pay compliance costs: establishing reporting mappings from GPS 340 outputs to the prescribed data fields, putting digital-signature infrastructure in place, and supporting auditor work programs that deliver the required limited assurance on controls (paras 5, 10). Boards and senior management must implement authorisation policies and internal review controls because the Standard explicitly assigns responsibility for authorisation to them (para 11). Appointed Auditors must allocate time for review and limited assurance engagements (para 10). APRA’s discretion to change reporting frequency or vary requirements for particular insurers (paras 7, 15) creates a regulatory option that can raise bespoke compliance costs for firms subject to more frequent reporting. The net effect is a structured, audit-linked data supply chain from insurer actuarial/finance systems through auditor assurance to APRA.

Readers should note that the Standard sets process and content obligations; it does not itself specify sanctions in the text provided. Enforcement and any penalties would arise under the enabling Acts and related prudential standards rather than inside the text of the Reporting Standard. The Standard also contains precise measurement conventions, positive/negative reporting rules and electronic submission requirements that create specific operational obligations (see Table 1 and the various definition paragraphs).

The Reporting Standard centres on the Insurance Risk Charge on premiums liabilities (PL). The principal data concept is net PL - total, multiplied by the PL capital factor % to produce the PL Insurance Risk Charge for each business type and class (definition in the P section: “PL Insurance Risk Charge” under P). The Standard requires insurers to report disaggregated elements used to derive net PL - total, including gross PL central estimate (excluding and including Claim Handling Expenses (CHE) and Policy Administration Expenses (PAE)), expected future reinsurance costs, commissions and reinsurance commissions, claims handling expenses, PAE, and risk margins (see sections labelled G, E, C, P and the Table 1 fields).

Key definitional and measurement conventions:

• The central estimate is the present value (discounted mean) of future payments determined in accordance with GPS 340 (Gross PL - central estimate, section G). That central estimate excludes risk margin and the definition explicitly states it is measured as the present value of future expected payments.
• Diversified risk margin and stand-alone risk margin are distinct items. Diversified risk margin is the margin after allowance for diversification across the insurance portfolio, while stand-alone risk margin is the margin that would apply without diversification (see Net PL - diversified risk margin and Net PL - stand-alone risk margin in section N).
• Some items are to be reported gross of recoveries (e.g. gross PL measures) and others net of expected reinsurance and non-reinsurance recoveries where specified (e.g. net PL measures in section N). Expected future reinsurance costs that are required to fully cover the exposure period are to be reported gross of recoveries and exclude CHE, PAE and risk margin (section E).
• There is an explicit zero-floor for the PL Insurance Risk Charge where net PL - total is negative: “Apply a zero risk charge where net PL - total is negative” (P).
• Classification rules are tied to GPS 001 and GPS 115: classes of business are reported per GPS 001 and, for the ‘Other’ direct class, the Appointed Actuary must determine whether it fits into category A, B or C of GPS 115 based on underlying risk characteristics (section C, “Class of business”).

Reporting mechanics and data governance:

• The Reporting Standard presents reporting fields in a strict column order and demands uniqueness: “Any specific combination of values in the table must not appear on more than one row in that table when reported” (General instructions, Reporting tables).

Primary entities subject to the Standard are “insurers”, defined as general insurers within the meaning of section 11 of the Insurance Act (para 17, definition of insurer), and the Standard states it applies to all general insurers authorised under the Insurance Act (para 3). That includes domestic authorised insurers and the Australian branches of foreign general insurers (the Definitions note “branch” refers to Australian operations of a foreign insurer). The Standard also explicitly references foreign insurers in the definitions (para 17).

Actors inside the insurer who have specific responsibilities under the Standard:

• The Board and senior management: responsible for ensuring policies and procedures for the authorisation of data submitted to APRA are in place (para 11).
• The Appointed Auditor: the auditor appointed under paragraph 39(1)(a) of the Insurance Act must review and test the insurer’s systems, processes and controls that produce the reported information and perform at least a limited assurance engagement annually or more frequently if required to form an opinion (para 10).
• The Principal Executive Officer (PEO) and Chief Financial Officer (CFO): only an officer or agent authorised by either the PEO or the CFO may submit information on behalf of the insurer (para 14). The insurer must ensure such authorisation is in place.
• Agents submitting on behalf of insurers: if an agent submits the information, the insurer must obtain and retain a copy of the completed information from the agent (para 13).
• The Appointed Actuary: the Standard requires the Appointed Actuary, for ‘Other’ direct business, to determine the appropriate GPS 115 category (A, B or C) based on underlying risk characteristics , this is a substantive actuarial judgement with reporting consequences (section C, “Class of business”).

Reinsurers and related entities:

• APRA-authorised reinsurers are defined to include insurers carrying on reinsurance business, Lloyd’s underwriters where they carry on reinsurance business, and the Australian Reinsurance Pool Corporation (para 17, definition of APRA-authorised reinsurer). Non-APRA-authorised reinsurers are also defined for reference (para 17).
• Reinsurance-specific reporting lines exist in the reporting tables and instructions: reinsurance classes of business are to be aggregated by category and reinsurance type per GPS 115 (section R, “Reinsurance business”).

External parties:

Duties imposed on insurers by the Standard are explicit and procedural. The main statutory duties are:

Provision of information:

• An insurer “must provide APRA with the information required by this Reporting Standard for each reporting period” (para 4). Reporting periods are quarterly (based on the insurer’s financial year) and annual, subject to APRA’s power to alter frequency (para 6).

Submission method and authorisation:

• The reported information must be submitted in electronic format using an electronic method available on APRA’s website or by a method APRA notifies prior to submission (para 5). Submissions by an officer or agent must be digitally signed using a digital certificate acceptable to APRA (para 12).
• An officer or agent submitting information must be authorised by either the PEO or the CFO (para 14). If an agent submits on an insurer’s behalf, the insurer must obtain and retain a copy of the completed information (para 13).

Timing and extensions:

• Quarterly returns must be provided within 20 business days after the end of the reporting period and annual returns within three months after the end of the reporting period (para 8). APRA may, in writing, grant an extension of a due date (para 9). APRA may also change reporting periods or specify bespoke reporting periods for a particular insurer if it considers it necessary or desirable (para 7).

Quality control and audit assurance:

• The insurer must ensure the information is the product of systems, processes and controls that have been reviewed and tested by the Appointed Auditor, on an annual basis at minimum or more frequently if necessary, and in a limited assurance engagement consistent with Auditing and Assurance Standards Board guidance (para 10).
• All information must be subject to the insurer’s internal review and authorisation procedures; the Board and senior management are responsible for ensuring appropriate policies and procedures are in place for authorisation of data submitted to APRA (para 11).

Reporting content and measurement:

• The insurer must report the specific components of GPS 340 PL by class of business for both direct and reinsurance business, using whole Australian dollars (Table 1: Reporting basis and Units of measurement).
• Specific rules are described for certain items: e.g., reinsurance commissions are to be reported as a positive number if they act to reduce gross PL, net written premium for material business that incepts in the next reporting period is defined and must follow Australian Accounting and Auditing Standards subject to APRA discretion (see Table 1 field descriptions and section N on net written premium).

The Reporting Standard sets process and content obligations and grants APRA administrative discretions; however, the Standard text provided does not itself specify civil or criminal penalties. The instrument is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (para 1), and the Standard links annual reporting to statutory accounts under the Insurance Act and to auditor certificate requirements (para 6 note). Therefore, enforcement actions, sanctions or penalties for breaches of reporting obligations would be governed by the Financial Sector (Collection of Data) Act 2001, the Insurance Act 1973, and related prudential standards and regulations rather than in the Reporting Standard’s text.

APRA’s operational enforcement levers and administrative powers expressly contained in the Standard include:

• The ability to change reporting periods or specify reporting periods for a particular insurer by notice in writing (para 7).
• The ability to grant an insurer an extension of a due date in writing (para 9).
• The ability to vary the reporting requirements of the Standard in relation to a particular insurer by written notice (para 15).
• The ability to specify the method of submission and to require digital signature authentication acceptable to APRA (paras 5(b), 12).

Because the Standard cross-references the Insurance Act’s statutory audit and certification regime, failure to meet annual reporting requirements could engage the Insurance Act’s obligations relating to audited yearly statutory accounts and associated auditor certificates (para 6 note referencing 49J and 49L). The note makes clear the auditor’s certificate required under the Insurance Act must be lodged with APRA in accordance with the prudential standards and that the prudential standards provide requirements for the certificate (para 6 note).

What the Standard does not do:

• The text does not list specific monetary fines, civil pecuniary penalties, criminal offences or administrative sanctions within the document. It therefore requires enforcement to be understood in the context of the enabling legislation and relevant prudential standards.

Practical enforcement risk:

• Operationally, the Standard creates touchpoints where APRA can identify gaps , late submissions, missing digital signature, failure to evidence auditor review or limited assurance, inconsistent or non-unique table entries, or incorrect measurement alignment with GPS 340 and GPS 115. APRA’s ability under paras 7 and 15 to change reporting frequency and vary requirements suggests it can increase reporting intensity where it perceives higher supervisory need.

The Reporting Standard is explicitly cross-referential. It does not operate in isolation and must be read with several named instruments and statutory provisions. The text makes these linkages explicit and prescriptive.

Primary statutory and prudential linkages:

• Financial Sector (Collection of Data) Act 2001: the Reporting Standard is made under section 13 of that Act (para 1). That Act provides APRA’s statutory power to collect data; the Standard is an exercise of that statutory power. Enforcement, powers to require data and penalties would be located in that Act rather than within this Standard (para 1).
• Insurance Act 1973: the Standard applies to insurers authorised under the Insurance Act (para 3). The Standard ties annual reporting to the insurer’s yearly statutory accounts under section 3 of the Insurance Act, and notes that such annual information must be audited according to paragraph 49J(1)(a) and that the principal auditor must give certificates as required by the prudential standards (para 6 note referencing 49J and 49L).
• GRS 001 Reporting Requirements: the Standard must be read in conjunction with GRS 001, including the general instruction guide and submission timing and format rules that GRS 001 contains (para 1 and para 6 note referencing GRS 001 for certificates and lodgement timings).
• Prudential Standard GPS 115 Capital Adequacy: Insurance Risk Charge: the capital factor (PL capital factor %) to be applied to net PL - total is prescribed in GPS 115; the Standard requires reporting consistent with the categories in GPS 115 and instructs the Appointed Actuary to place ‘Other’ direct business in category A, B or C of GPS 115 according to underlying risk characteristics (para 1; section C).
• Prudential Standard GPS 340 Insurance Liability Valuation: the measure of premiums liabilities (central estimate, claims handling expenses, policy administration expenses, expected reinsurance costs and risk margins) must be determined in accordance with GPS 340. The Reporting Standard repeats measurement conventions from GPS 340 and requires the data fields to be filled accordingly (paras 1-2; sections G, C, N, P and Table 1).
• Prudential Standard GPS 310 Audit and Related Matters: paragraph 10(b) requires that the auditor review and testing be at least a limited assurance engagement consistent with Auditing and Assurance Standards Board guidance as may be amended from time to time, to the extent not inconsistent with GPS 310. That creates an interface between APRA’s prudential expectations and Australian auditing standards and GPS 310 (para 10(b)).

The provided text contains limited explicit historical metadata. The facts the document supplies are:

• The Reporting Standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (para 1).
• It applies for reporting periods ending on or after 1 July 2023 (para 3).
• The text contains a transitional provision requiring insurers to report under the old reporting standard in respect of a transitional reporting period, and defines “old reporting standard” as the reporting standard revoked in the determination making this Reporting Standard (para 16). The transitional reporting period definition captures reporting periods under the old reporting standard that ended before 1 July 2023 but for which reporting was required on or after the date of revocation.
• The Standard explicitly notes that certain annual information required by this Standard and other standards will form part of year-end statutory accounts for purposes of the Insurance Act and therefore must be audited under paragraph 49J(1)(a) of the Insurance Act and that the principal auditor’s certificate must be lodged with APRA in accordance with the prudential standards (para 6 note).

What the text does not include:

• There is no record within the text of prior amendment dates, successive revisions, or a legislative history beyond the transitional mechanism described in paragraph 16. The Standard references a revoked “old reporting standard” but does not name it nor record the date of revocation within the provided text.
• There are no version numbers or amendment schedules contained in the excerpt.

How to interpret these limits:

• The existence of paragraph 16 indicates that the Standard replaced a prior APRA reporting standard and that the replacement was effected by a determination that revoked the prior standard. The Standard imposes a clear commencement date (reporting periods ending on or after 1 July 2023), so practitioners should check the APRA determinations registry, GRS 001 revision history, and the legislative instruments register for the relevant determination number and any subsequent amendments not included in this text.
• Because paragraph 18 provides that references to Acts, Prudential Standards, Reporting Standards, Australian Accounting or Auditing Standards are to be read “as in force from time to time,” the Standard anticipates that related instruments may change over time and that those later changes will affect interpretation (para 18).

The text of the Reporting Standard does not include any litigation history, judicial decisions, or references to cases. It contains only statutory and prudential instructions and cross-references to the Insurance Act, Financial Sector (Collection of Data) Act 2001, GRS 001, GPS 115 and GPS 340. No court proceedings, decisions, appeals or judicial reviews are recited in the document.

Where litigation issues might arise in practice, on the basis of the Standard’s content:

• Disputes could potentially arise over the interpretation or application of prudential valuation inputs adopted from GPS 340 , for example, whether particular amounts reported as expected future reinsurance costs or recoveries have been correctly measured under GPS 340. The Standard requires consistent application of GPS 340 definitions (sections G, E, N).
• Disagreements could arise about whether an insurer complied with the auditor assurance obligations (para 10) or the insurer’s internal authorisation policies and whether the authorised signatory was properly empowered (paras 11, 12, 14).
• Classification disputes may arise where the Appointed Actuary classifies ‘Other’ direct business into categories A, B or C under GPS 115; such actuarial judgments can be contested by APRA in supervision or potentially in judicial review if APRA takes adverse action (section C).
• Timing and lodgement controversies can occur , for example, where an insurer claims an APRA-granted extension or relies on a non-standard submission method notified by APRA; the Standard permits APRA to alter timing (paras 7, 9). Challenges could involve whether APRA acted reasonably in exercising those discretions, but the Standard itself does not spell out dispute or review procedures.

Because the Reporting Standard does not include judicial outcomes, practitioners seeking an understanding of litigation exposures tied to these requirements should examine case law that interprets the Insurance Act, the Financial Sector (Collection of Data) Act, and judicial review principles applied to APRA decisions. The Standard as provided does not supply any such case references.

Operational pitfalls and traps in the Standard are concrete and often procedural. Below is a non-exhaustive list of precise “gotchas” extracted from the text, with references to the relevant paragraphs or sections.

1. Annual dataset forms part of statutory accounts and must be audited. The annual information required by the Standard will form part of the insurer’s yearly statutory accounts and must be audited in accordance with paragraph 49J(1)(a) of the Insurance Act; the principal auditor must provide a certificate under subsection 49J(3) and lodge it with APRA (para 6 note). Missing this linkage or mistiming audit evidence risks non-compliance.

2. Appointed Auditor’s assurance scope is specified and is at least limited assurance. The Appointed Auditor must review and test systems, processes and controls at least annually and provide at least a limited assurance engagement consistent with Auditing and Assurance Standards Board guidance, insofar as it is not inconsistent with GPS 310 (para 10). Insurers cannot treat auditor review as optional or as a mere checklist; it must meet the limited assurance standard.

3. Digital signature and authorised submitter requirements. Submissions must be digitally signed using a digital certificate acceptable to APRA (para 12), and only officers authorised by the PEO or CFO may submit (para 14). Failure to use acceptable digital authentication or to ensure valid authorisation will render the submission non-compliant.

4. Agent submissions , insurer must retain copies. If an agent submits data, the insurer must obtain and retain a copy of the completed information (para 13). Reliance on an agent without obtaining the copy breaches the Standard.

5. Unique row constraint in reporting tables. “Any specific combination of values in the table must not appear on more than one row in that table when reported” (General instructions). Duplicate rows with identical keys will conflict with APRA data validation.

6. Units and sign conventions. Values must be reported in whole Australian dollars (no decimals) (Specific instructions). Some fields must be reported as positive when they reduce gross PL (e.g. reinsurance commissions), and others as gross of recoveries when specified (see Table 1 and sections such as E and G). Misreporting sign or units will create reconciliation problems.

7. Zero-floor rule for net PL - total. The PL Insurance Risk Charge must be set to zero if net PL - total is negative: “Apply a zero risk charge where net PL - total is negative” (P). Reporting a negative charge instead of a zero floor will be incorrect.

This section describes a practical implementation checklist and recommended controls that map directly to the Standard’s mandatory provisions. Each step references the relevant paragraphs or sections of the Reporting Standard.

1. Establish governance and roles

• Ensure the Board and senior management adopt and document policies and procedures for data authorisation, internal review and sign-off of APRA returns (para 11). Assign clear owners for actuarial inputs, finance reconciliation, IT file generation and submission, and audit liaison.
• Confirm that the Principal Executive Officer or Chief Financial Officer will provide the required authorisations for submitters; create written delegation records for authorised officers and agents (para 14).

2. Map actuarial outputs to reporting fields

• Map outputs from GPS 340 valuations to each required reporting field in Table 1 (Gross PL central estimate excluding/including CHE and PAE; expected future reinsurance costs; commissions and reinsurance commissions; CHE; PAE; diversified and stand-alone risk margins; net written premium for material business that incepts in the next reporting period) (sections G, E, C, N, P and Table 1).
• Ensure central estimates are measured as the present value (discounted mean) in accordance with GPS 340; confirm the treatment of recoveries and reinsurance in each line item as specified (section G, section N).

3. Apply classification and capital-factor rules

• Confirm class of business labels follow GPS 001 and that the Appointed Actuary records the rationale for classifying ‘Other’ direct business into GPS 115 categories A, B or C based on underlying risk characteristics (section C).
• Use the PL capital factor % for each class per GPS 115 when calculating the PL Insurance Risk Charge: multiply net PL - total by the PL capital factor % and apply the zero-floor if net PL - total is negative (section P).

4. Data integrity, uniqueness and units

• Produce the reporting table in the exact column order APRA requires and ensure any specific combination of values does not appear on more than one row (General instructions).
• Report values in whole Australian dollars with no decimal places (Specific instructions, Units of measurement).
• Respect sign conventions indicated in Table 1 (e.g. reinsurance commissions as positive where they reduce gross PL).